By Phil Parry, Chairman at maritime recruitment, executive search, and HR firm, Spinnaker
The recruitment crisis is top of the boardroom agenda, and it seems that, given the set of circumstances that every business is facing in this post-pandemic world, nobody is quite sure what to do about it. There are signs that the market at large is seeking to attract and retain talent by offering higher salaries as a “magic bullet”—but unfortunately, this challenge is more complex than that and will require more structural and institutional changes. Anyone hoping for a “quick fix” is likely to be disappointed.
It is certainly easy to see how the alignment of the cost-of-living and recruitment crises has triggered pay inflation—people are less well-off than they were at the start of the year, almost everything is more expensive and there’s a skills shortage. It is nothing new that employees expect to be paid a fair salary; failure to meet this expectation has always led to a disgruntled workplace and departing workers.
In some areas of the maritime industry, there has already been something of a pay-rise frenzy, notably in dry-bulk commercial roles and we’re seeing signs of the same in tankers and LNG.
However, high pay alone is not enough. The pandemic has changed the world of work and what people expect from their employer—they expect their workplace to be stimulating and rewarding and to fit in with their lifestyle like never before. Attitudes have changed massively, and overnight. The hybrid working revolution is just one example—86% of maritime employers are now utilizing some form of hybrid working arrangement, according to a recent survey we conducted in our role as secretariat of The Maritime HR Association, and of those that have not yet done so, a further 40% are planning to.
The lingering spectre of the pandemic combined with this new attitude towards work have driven another trend, which is a decreasing willingness to relocate. The pandemic was particularly unkind to expats, with many finding themselves trapped far from home when lockdowns struck. Current geopolitical or economic circumstances aren’t helping—things may be bad at home, but the grass isn’t always greener elsewhere.
For example, Middle Eastern employers have been finding it harder to attract expats with current pay and packages; Singapore is seen as an expensive place to live nowadays and its strict pandemic approach has put people off; these issues are also faced by Hong Kong, which is wrestling with the additional turn-off of political unrest. In truth, the best employers can overcome these hurdles, as a strong employer reputation trumps everything.
Perhaps surprisingly, London, on the other hand, is increasingly seen as an affordable place for companies to locate their staff, which we can at least in part attribute to the pay squeeze in the UK between 2009 and 2014, which resulted in an overall lower cost to employers wishing to set up shop in the UK. What was a homogeneous salary market until 2009 diverged significantly when UK and other OECD countries froze salaries; they continued to rise at 5-7% per year in the Indian Subcontinent and the Far East.
There are some interesting—albeit challenging—few years ahead economically, but currently, shipping and its people are not faring too badly. The best places to work in shipping is a changing landscape. We thought it was all about Singapore, but the pendulum has swung back a little. Only a fool would try to predict more than a few months ahead given our experiences of the last few years. Watch this space!