If you work in the property industry the good times keep rolling on… the bonuses keep coming and so do the job offers…
Or as Rita Avdiev puts it in her 20th Avdiev Property Industry Remuneration Report 2006: “Another year, another salary rise throughout the property industry.”
But more and more Australians are chasing even bigger bucks overseas, according to Rita Avdiev, the managing director of the Avdiev Group.
Avdiev said that experienced Australian property people are going global.
“There is a global skills shortage and companies have to take defensive action when their executives are targeted at double their salaries for overseas countries where taxes are low or non-existent.
“The skills shortage is affecting the property industry and is creating problems for companies involved in property investment, development and property consulting including, architects and town planners,” Avdiev said.
And the retention of staff has also become a major issue for property companies, adds Avdiev.
For those companies affected by the skills shortage, the greatest impact was found to be on the company’s expansion plans. An impact on business performance and profitability and on business activities was also reported.
The shortage of suitable staff was most frequently experienced for mid-level positions and senior staff. Specific positions in short supply were, development managers, project managers, estimators, investment managers, funds managers, portfolio managers, architects, planners and leasing executives.
At the management level, shortages were reported for senior executives in business development, finance, construction and property securities positions.
Almost every company contributing information to the Avdiev Property Industry Remuneration Report 2006 reported increasing remuneration at their last reviews.
“The median remuneration increase reported for the year from May 2005 to April 2006 was 5.0% for senior staff, 4.5% for mid-level staff and 4.0% for junior employees. These increases were the same as those reported for the previous year,” she added.
Crucially, the impact on recruitment has meant that it is taking longer to recruit and some companies simply cannot find suitable candidates”, the report found.
“The Companies pay premiums to recruit new staff, sign-on bonuses, refund bonuses foregone at their previous employment and guarantee bonuses in the new job. Equity in the company is often offered, easy to do in a boutique. Large organisations will offer a substantial parcel of shares, vesting over a defined period, designed to retain the executives.”
“There’s a lot of action at the top of the food chain,” Avdiev said. “Who has failed to notice the musical chairs being played by executives of the property funds?
“One can easily lose count of the moves and counter strikes of the last six months.”
According to the Avdiev Property Industry Remuneration Report, a popular defensive measure is to raise the level of remuneration of the remaining team after their leader leaves.
“It’s usually a substantial rise, becoming known as the “departure effect” and this defence is not always successful, as the former leader beckons with an even greater incentive,” Avdiev said.
And the report found the ‘bidding war’ scenario continues to create a spiral of remuneration rises.
Respondents to the report said incentive schemes are in place in almost all companies, with 93% of companies reporting them. Most incentive schemes are short-term, with 82% of companies having a short-term scheme in place, and 60% have a long-term scheme. Both long and short-term incentives are in place for 54% of respondent companies.
“Companies are reviewing their remuneration structuring and incentive schemes with over one-third of these companies have made changes in the last two years,” Avdiev concluded.
By Kathryn O’Meara