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retaining talent

Despite their best efforts, financial service companies are finding it difficult to manage attrition
Mayank Singh

Abdul Aziz al Balushi joined Alliance Housing Bank (AHB) as its new CEO. Balushi was deputy CEO, National Bank of Oman. Sami Zadjali, marketing manager, Oman International Bank is now doing the same job at Bank Dhofar. Munira Macki, head of corporate affairs, AHB joined Bank Sohar, as its head of human resources. Atul Kanwar, general manager, finance, OHI group is now with the Al Sulaimi Group as its chief finance officer after a 21-year career with his previous organisation. The list of finance professionals who have jumped ship recently can go on and on (see table).

A look at the situation vacant ads in the papers reveals a market thirsty for finance professionals – chief finance officers, chartered accountants, company secretaries, investment bankers et al. What makes the equation worse is that the competition for such professionals is not just limited to Oman, but comes from the entire Middle East.

Fuelling the fire
The inflow of petrodollars has been the biggest contributor to this trend. With the combined oil exports of Saudi Arabia, UAE, Kuwait, Qatar, Libya, Oman and Bahrain growing from US$186bn in 2002 to US$440bn in 2005 (for 2006, the estimates are US$360bn), there has been an increase in the number of people needed to handle this liquidity. “In any economy that grows fast, the first to feel the impact is the finance industry. As banks, companies and clients have more money there is a need for managers to take care of this wealth,” says Syed Mohommed Quadry, vice president, business development, Amwal Investment.

The infrastructure growth that has followed the influx of petrodollars has posed a new challenge for financial service firms. The sudden demand for analysts has taken the industry by surprise. “More companies in Oman are now aware of the need for financial analysis and feasibility studies to mitigate risks and save money,” says Tareq Wehbe, manager, business advisory services, Ernst & Young. To cite an example, E&Y’s Transaction Advisory Service division which carriers out feasibility studies for companies and projects has grown from five professionals to ten in the course of the last one year.

The growth of an analyst culture has led to a demand for specialised skills and experienced professionals. Finance professionals broadly fall into two categories: on the maintenance side, there are accountants commerce graduates who primarily perform bookkeeping functions. Then there are professionals who work on complex financial models and treasury functions like the flow of funds and their utilisation (a fund manager in a mutual fund company). “These are the rock stars of the world of finance,” says Ajay Bhati, managing consultant, Lighthouse Consulting. Kanwar’s brief at Al Sulaimi is to work out a holding company finance structure for the group.

With such skills and experience being scarce, companies are rolling out the red carpet to recruit such professionals. While the average salaries for finance service professionals in Oman has gone up by 9-10 per cent (see BusinessToday March 2007) a number of companies are ready to pay a premium over the prevailing market rate to attract the requisite talent. “We have increased salaries by 15-20 per cent but are still finding it difficult to fill up the vacancies in our company,” says the vice president at a brokerage firm. With unheard-of pay packets on offer, senior professionals have no qualms in jumping ship.

The pressure on HR managers, to look for professionals from within the sultanate, has gone up, as it is getting increasingly difficult to attract talent from India, Jordan and Egypt – countries which were hunting grounds for finance professionals in the past. A double whammy for financial service companies in Oman has been the growth of Dubai, Bahrain and Riyadh (Saudi Arabia) as centres of financial excellence within the region. The Dubai International Financial Exchange (DIFX) which opened for listing in September 2005 is working towards becoming the region’s international exchange. Bahrain with over 365 banking institutions, commercial banks, offshore banking units etc is also competing for the finance hub mantle.

“These centres offer people the right experience, a chance to learn global best practices, better career development opportunities and a proper pay rate,” says Wehbe. So it comes as no surprise that a number of finance professionals have migrated to these countries.

Emboldened by the new opportunities in the region a number of multinational companies like HSBC, Citigroup, Goldman Sachs, Merrill Lynch, Deutsche Bank, Credit Suisse First Boston are either setting up shop in the region or are offering new services like asset management, investment banking and arbitrage activities. The presence of multinationals with predictably deep pockets is changing the face of the finance industry and its impact is being felt all across.

All this may be the proverbial tip of the iceberg. With the price of oil being steady over US$55 per barrel, a number of banks and companies are vying to enter Oman; Gulf Merchant Group was the latest to announce its entry, and will start commercial operations by the end of 2007.

With Oman poised to keep up its economic growth, attrition rates may just get worse. While aiming for zero attrition may be unrealistic, progressive HR management will definitely help financial service companies become an employer of choice for many, if not for all.