By Omar Mohsen Leading employers are realizing that fresh talent is the future News Focus Syria Thinks Small Damascus turns to microfinance to combat poverty An Industry Unraveling Once a symbol of national pride, cotton’s prospects are coming apart at the seams A New Way of Doing Business Non-profit group promotes economic development by giving companies a helping hand The Science of Buying Marketers examine the brain to find out what makes consumers tick Digital Booty With electronic piracy plaguing the music business,legitimate media companies scramble for a business model that pays A Rocky Start Theft, corruption and a little chaos mark the launch of a new property levy meant to haul the country’s tax system into the modern era Highway Robbery Reputation of white taxi program takes a hit as drivers caught rigging meters By Mohsen Allam Has headhunting by Etisalat left offices empty in the nation’s leading telecomms companies? By Omar Mohsen It’s connections that count, as more professionals focus on reaching out to a younger generation By Ahmad El-Nemr Skill-Link Managing Director Sherif Sami — the War for Talent means plenty of work for recruiters

By Tom Gara

When trying to explain the opportunities now available to talented professionals, New York Times columnist Thomas Friedman, author of globalization bestsellers including The World is Flat and The Lexus and the Olive Tree, often recounts an anecdote told by Bill Gates: Twenty years ago, would you have rather been a genius in Shanghai or a B-student in California? Back then, almost anyone would have chosen to be the second-tier Californian. Today? Most would rather be the genius, due to the increasing global demand for talent.

Looking at the current competition for talent in the local market, the same could easily be said for Egypt. Rapid economic growth combined with fierce competition between local and multinational companies means that there has never been a better time for a skilled Egyptian to be in the local job market.

According to professionals and the recruiters who court them, early career jobs with monthly salaries of LE 5,000 to LE 15,000 for qualified candidates in fields including investment banking, marketing and sophisticated manufacturing are fast becoming expectations rather than dreams. Higher level executives can expect to see LE 50,000 or more deposited each month into their bank accounts. The most striking trend today contrasts to the long lines of white collar professionals competing for a single job that was common years ago, as many of the nation’s top young professionals are now finding companies competing for their attention.

Aside from booming salaries, employees at many large companies can now look forward to other perks: Many of the businesses most in need of top talent offer signing bonuses worth thousands of pounds. To retain these employees for the long run, many offer service bonuses — it isn’t unheard of for a long serving employee (10+ years) to receive cash bonuses or stock options of over LE 500,000.

In addition, many businesses are offering sweeteners such as company cars (or car allowances), laptops, free meals and even an allowance for clothing — because what use is a great marketer in a cheap suit? One leading consumer goods company also has a reputation for sending staff on overseas training courses. Learning all about the secrets of customer service in Florence or Geneva is certainly more fun than following a PowerPoint presentation in your own stuffy little office.

Sherif Sami, managing director of recruitment company Skill-Link, explains that would-be employees frequently have the upper hand in negotiations. “The companies really have to go out of their way to pamper [their employees], lay down clear career paths and motivate them; otherwise, these people can easily move from one place to another because they are in high demand,” he explains.

There is a huge demand for skilled professionals of all stripes, particularly those with technical or quantitative skills, such as telecommunications engineers, information technology graduates, financial planners and investment bankers. These fields require specific academic knowledge and often need specialized work experience, or experience with particular technologies. Excellent candidates with qualitative skills are again in demand by marketing and public relations departments. Across the board, a skilled person with proven experience can see 30-50% wage inflation, and sometimes even more, compared to just three to five years ago.

Across disciplines, demand is also rising for personal characteristics that are rarely taught or developed at today’s universities — the attitude, values and competencies that make a good employee, team member and leader. Finding people with these skills, especially young graduates, is a major challenge for many of the country’s leading employers.

According to Dalia El-Gezery, head of human resources at Vodafone Egypt (bt100 number 5), finding people with the right combination of skills is paramount. “The real competition right now is for second jobbers — people who have had success early in their career and have proven themselves,” she explains, saying that a person with a few years experience in the work force is preferred over a fresh graduate who has nothing but an academic background.

Competition for Egyptian talent is not a new thing, whether locally or internationally. Since the oil boom began in the Gulf, the temptation for Egypt’s best and brightest to take more lucrative positions abroad has been strong. What is striking about the current situation is that for many, there is now much less financial incentive to look overseas for work as high paying jobs can now be found in their own backyard. Egypt’s relatively low cost of living compared to Europe and the United States — and a culture that has young men and women depending on their parents for housing well after they join the work force and even after getting married — leaves professionals financially better off in Egypt, not to mention the allure for many of remaining closer to family and friends.

Employers in Egypt now compete not only with their higher paying peers in the Gulf and further abroad, but also with the deep pockets of a growing number of large Egyptian and multinational firms. Many have come to realize that their success increasingly depends on the quality of their employees and now compete in the local version of what has become globally known as the war for talent.

There is now broad consensus in international business that recruiting and retaining the best talent will become increasingly important with time. The Egyptian labor market’s adaptation to this trend, however, has reaped mixed reviews.

When it comes to multinational and large Egyptian companies such as EFG-Hermes (bt100 number 26), Sami believes that the message has been received loud and clear.

“They set the bar high and are willing to compensate their people accordingly,” he says, going on to describe the lengths to which such large businesses will go to attract and keep their best people. Salaries and perks are major aspects of these strategies. El-Gezery claims that Vodafone Egypt pays its people salaries that are in the top league of Egyptian employers, and it doesn’t end there. “It isn’t just money. It is our environment, from our working culture and values, training and development, and our facilities — we want to be the best place to work in Egypt”

Small and medium enterprises (SMEs) are another case entirely. Sami explains the dilemma faced by such companies: “We have plenty of medium sized businesses in very promising sectors, like agriculture, ready made garments and textiles. These companies are really what Egypt is banking on to expand exports and jobs. The problem is that they are unable to attract the talent that is required because they can’t afford it. If this challenge cannot be overcome, then the companies will not become leaders in their field.”

Moreover, many SMEs already have a committed, faithful and hard-working staff that would likely be very unhappy with the prospect of a new employee joining the team with a starting salary dwarfing those to which they have worked up to over many years. For the average SME, the option may be to avoid competing based on salary alone. Maha Fakhry, associate director of the American University in Cairo’s Career Advisory and Planning Service (CAPS), explains that there are non-salary-related advantages for a graduate to start out at a SME.

“They are a good opportunity to learn and develop — as these companies are small, you have exposure to more than one area. Some people will prefer that,” she says.

As the largest employer in the country, the Egyptian government is finding it hardest to compete in an open market for the country’s best talent. Many government departments are associated with stifling bureaucracy, slow-paced work and little opportunity for rapid progression. To make matters worse, the government’s official pay-scale is skewed compared to the going market rate, with senior government employees paid less than LE 3,000 a month — a salary that would often be earned by skilled secretarial employees in some of the nation’s top companies.

Some ministries — largely those headed by members of the Economic Team — circumvent these pay-scales to attract top talent, hiring high-caliber staff as “external consultants” to the ministry. This means that their salaries are not regulated by the official pay-scale. The improved pay and opportunities, combined with the chance to work with the stars of Prime Minister Ahmed Nazif’s team, means that, slowly, more of the nation’s best people are again considering government careers.

The talent challenge does not stop once you have found a great employee and convinced them to join your ranks. Headhunting — focused recruitment of high-caliber employees directly from the ranks of competitors — can cause your best people to leave just as quickly as they joined. Although headhunting has been happening in Egypt for many years, there hasn’t been a case that has attracted as much interest as the recent example of the United Arab Emirate’s Etisalat, soon to become the nation’s third mobile operator.

After paying LE 16.7 billion for the country’s third mobile license (LE 2.5 billion more than the second highest bid), Etisalat is under intense pressure to produce fast, impressive results. In the highly specialized field of mobile telecommunications, establishing a new network, billing and customer management system and hiring support staff requires highly specialized skills and experience — characteristics most easily found in the current employees of Vodafone Egypt and Mobinil (bt100 number 6).

After agreeing some years ago to an unofficial (but observed) “truce” on recruiting each other’s staff, the two companies were hit hard by an onslaught of offers being made to their top staff by a talent-hungry Etisalat, industry veterans say.

Over the last quarter of 2006, Etisalat made a series of offers to Vodafone and Mobinil professionals, offering them salaries that often were, according to reports, 2-3 times higher than they were already taking home. Although their management teams remain tight lipped regarding the number of staff they lost to Etisalat (Mobinil representatives declined to talk at all to bt for this story), persistent rumors put losses at 25% of the headcount in key departments.

Vodafone’s El-Gezery counters that only 1-2% of the company’s staff had accepted offers from Etisalat — with a total staff of 3,000, this equates to only 30-60 staff switching sides. This figure conflicts strongly with previous press reports that claimed that up to half of Etisalat’s staff consisted of ex-Vodafone and Mobinil employees.

After only 15 minutes of phone calls, bt staff managed to find ten former Vodafone employees who had made the move.

Even if the current competition for talent in the telecommunications sector is a little more intense than average, there are lessons to be learned for all employers. If your organization is dependent on great people for success, then consider yourself a participant in the war for talent.

Whether a small charity or a giant multinational, there are simple things that every employer can do to make their organization the kind of place that the best people want to call home. Michelle Moarbes, HR head at Ericsson Market Unit North Africa, explains that although salaries can initially attract people, other factors should play a crucial role in any talent strategy. “We are really offering people a diverse and global environment. You can not believe how diverse our environment is,” she explains. “Retaining and motivating [people] is always on our agenda.”

Fakhry agrees: “You can [offer] the biggest salary ever, but if they are not happy with what they are doing, not happy with the environment, they will be gone in 2 years,” she says. Ensuring your employees have a great working culture, a clear career path and ongoing development opportunities are three obvious ways to begin applying the “talent mindset” to any business.

Sami adds that depending on the age and experience of staff, different priorities will be important to remember. “For younger people it is salaries, opportunities. For the more experienced people, it is things like extra qualifications, certificates — working with new technologies, things that will help them develop their professional status.”

Being aware of what is important to your people and making sure your organization is offering it, is another simple step toward creating a talent-friendly environment — something that everyone can agree is a twenty-first century must-do.

Renowned international management consultancy McKinsey issued a report in 1998 that quickly became its most influential publication of the decade: The War for Talent.

In that report, McKinsey made a clear case that in a knowledge-based, highly mobile and global economy, the most successful businesses of the twenty-first century will be the ones who place a supreme value on the quality of the people within their ranks. Finding the best people, attracting them to join the company and creating the necessary conditions to convince them to stay were organizational skills that needed to be quickly fine- tuned.

At the core of the report was the assertion that “having better talent at all levels is how you outperform your competitors.”

Like most management consultants’ comments, this all sounds so obvious and basic that any business leader should be all too aware of it. However, the report came at a time when large-scale corporate layoffs had just ended, when off-shoring and the outsourcing of jobs was growing in the West and the corporate concept of “Human Resources” (HR — itself a turn of phrase quite revealing of prevailing corporate attitudes toward staff) revolved largely around administrative and operational issues.

In such an environment, the concept of putting the individual staff member at the front and center of the corporate priority list was certainly a wake-up call.

The McKinsey report called for HR professionals to expand the scope of their work to encompass “talent management”: building an employer brand, learning to identify and cherish talent and ensuring that the best people not only remain in the company, but are aggressively trained, role-modeled and promoted.

The legacy of the report is ever-present in business culture today, with the role of talent manager now a common one in companies such as Cadbury-Adams and Ericsson. Some companies, such as UK-based advertiser WPP, even have an executive-board level Chief Talent Officer (CTO).

The predictions and analysis of the McKinsey report are now a reality in Egypt, much to the delight of the nation’s best professionals.  bt