Worth their weight in gold

Real estate specialists are that rare species which can afford to pick and choose from job offers and demand huge salaries – some of which have even doubled over the past year. Newcomers to the industry, despite their inexperience are already calling themselves specialists and being paid handsomely

The real estate boom has generated a massive demand for specialists. Investment is taking place at a much faster rate than there are competent professionals appearing on the scene to facilitate them. And the construction sector has been undermined by the migration of workers to west European building sites. But the surge in demand also springs from another source.

Beata Radomska, Cigno Consulting’s managing director, (a company which recruits workers to such industries as real estate and construction), believes that: “As the local market grows and matures the need has also arisen to employ workers with completely new competences. For instance, a few years ago, very few companies employed people – so-called ‘investment cost managers’ – to supervise investment costs. We are currently keeping our eyes open for such specialists, and since they are so few in numbers, our customers have to pay them what I think are unreasonably high wages, e.g. PLN 15,000 gross per month.”

Central Statistical Office (GUS) data reveals that there was a shortfall of 10,600 construction personnel in late 2006, while there were 7,000 office vacancies for positions serving properties and companies. The same phenomenon is visible not only in this industry, but throughout the entire economy, which is advancing at a speed unknown for many years. Wages have not increased at current rates in Poland for 7 years. Official statistics show that the average wage in August in the enterprise sector, which includes companies employing at least 10 people and outside the financial and state sectors, was 10 pct larger than in the previous year.

The turning point
of 2006

The question today is where to find specialists? Where to look for experts? Similar complaints can be heard everywhere. But less hysterical voices can also be heard on the market. Paula Stojanow, who heads the real estate section of Hays Poland, stresses that: “In many cases the real problem is to find personnel with an appropriate level of knowledge and experience. Due to the fever on the salaries market, people with less knowledge have raised the bar and have negotiated really high rates of pay. It is they who have come out on top.” The Construction and Property team as a whole generates around 25 pct of the company’s earnings in Poland.

Personnel consultants are now relating with some irony how people with only a few months experience think they have become real estate experts and deserve wages twice or three times greater than they earned to the moment, apart from an independent post.

Head hunters claim that the first tremors on the salaries market were felt in early 2006, when the same specialists who could expect wages of PLN 10,000 in late 2005 could ask for PLN 15,000 – 16,000 a few months later. But even more importantly, what was being demanded was given over. Beata Radomska estimates that the rates offered in certain posts have even doubled over the past two years. Paula Stojanow of Hays Poland believes that wages in real estate and construction rose by an average of over 20 pct in the past year, with the greatest hikes being given for posts which were the most difficult to fill. The question is: which experts are literally worth their weight in gold? Stojanow is quite sure that the most looked for are specialists in commercializing investments, project managers, and experts responsible for growth and purchasing plots, as well as people in charge of entire companies, such as the president and general manager.

Employer education

In the opinion of Magdalena Bannatyne, a consultant for Headcount Solutions Polska: “The current situation is that the labour market can be increasingly termed an employee’s market. Employers were not fully prepared to cope with such a situation, while some of them still study with disbelief the analyses we provide of the salary expectations of job candidates. This leads to drawn-out recruitment processes and the ‘loss’ of many interesting candidates.” The most important thing is to use a variety of methods to prevent personnel leaving employment due to the multitude of tempting offers. “Many companies, unfortunately, react only when they lose several valued specialists in a short time. This is when they realize that the budget they possessed to substitute them with new personnel is sufficient for only one person instead of two,” adds Agnieszka Zakierska, also a consultant at Headcount Solutions.

The inability of employers to financially appreciate what the old personnel were capable of and their preference for ‘young blood’ often has harmful effects. According to Beata Radomska of Cigno Consulting: “When a new worker is introduced to a team having been given a much higher wage than the others, the natural outcome is an avalanche of demands for rises to which the employer must give in more often than not. If this is refused, the employer is forced into the realization that another person will have to be found, which will require time and also is bound to be expensive, since the employer will surely be forced to spend even more on a new employee.”

In some dire situations, desperate employers have been known to bribe their staff, that is to pay the contractual penalty fees for moving to another company,. An attractive employee may also often be tempted by a top of the range company car (laptop, mobile phone and health insurance in a private clinic are rather standard by now). But increasingly often employers are having to put their foot down, refusing such hand-outs due to the fragile state of their company’s finances.

Bank-based vein of gold

Should employees really be looking for top earnings, or should they go for posts in investment banks?

Personnel consultants also classify developers as relatively generous employers, followed by agencies and, at the bottom of the list, construction companies. It now appears that people working on commercial rather than housing projects can expect higher salaries. A new trend is to level out the wages earned by staff in Warsaw with those on offer to people in other cities. Beata Radomska explains: “Rate differences diminish, since more companies are operating on several markets with salaries earned by people employed in the same posts being similar. Regional markets, where there have not been so many large investments, have only a modest specialized management personnel, which results in their pay surging upwards.”

Yet another significant market trend is that the form of employment is no longer important. On the one hand, employees have learned how to run their own businesses and know the benefits which this generates, while employers have become more cooperative and are presently more open to finalizing work contracts. Paula Stojanow comments that: “We have witnessed situations in which negotiations were terminated because the employer refused to cooperate with a person running his own business who declined to resign from managing his own firm. I think employers now believe that a labour contract ‘binds’ a worker more closely with his workplace.”

End of the fat years?

Will the excessively high wage rates continue on the market? The consultants think so, even though the high point of the wave has passed.

Magdalena Bannatyne of Headcount Solutions Polska estimates that: “The situation can be compared with the huge wave of housing price rises on the Warsaw market. Calm ensued after a period of shocking increases, so I think wages will increase, but not by tens of percent but rather by single figures or a bit more annually in the most required posts.” But if you happen to be a property expert, should you really emigrate to neighbouring countries to earn more? Head hunters do not agree, but if you must then only to Russia and Kazakhstan where business risk and wages as well are higher. Wages are more or less similar in Central and Eastern Europe, although differences in income tax and costs of living must always be borne in mind.

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Ewa Andrzejewska