Salaries in Malta have returned to stable growth patterns, after a few years which saw dramatic volatility as a result of the higher wages offered by new economic sectors like i-gaming and financial services.
“These sectors pushed wages up dramatically – there could be a differential for the same job that runs into tens of thousands of euro, which reported an increase of only 1.6 per cent overall,” Misco director Lawrence Zammit said, commenting on the data that emerges from the Misco 2013-2014 Salaries and Benefits Report.
The changes were so dramatic that the 2007 report was outdated within just a few months as IT salaries spiralled out of control, trebling and quadrupling, prompting them to issue a supplement after just a few months.
Misco has been publishing its survey of salaries since 1985 – but the current report, which is based on the feedback of 5,500 remuneration packages, is a far cry from the original report which looked at just 1,000. And the survey grows every year, with 17 new job roles added this year alone. “Of course, the more data you collect, the more statistically solid the results are,” he said.
To ensure that the trend captures realistic data, only local employment contracts are considered and expatriate bonuses were removed.
Mr Zammit said the survey had rapidly become a reference point for employers, as it established a benchmark for the salaries being paid by the market.
“Of course, it is then up to them to decide where to position themselves through their offering, a decision which reflects the complexity of the business, whether it is domestic or international, and whether they was to be the best player in that sector – which means getting the best talent available,” he said.
“Another point is that manufacturing companies were lured here by lower salaries as labour costs were very important. But with sectors like i-gaming and financial services, this was not relevant and they offered salaries that they would pay in other countries. The problem for Malta is that other sectors that need these skills would have to raise their own wages to attract or retain employees.
“However, we are seeing changes in that these companies are now more aware of costs and are making more of an effort to recruit internally, rather than to import.”
He warned that it was very important for the country to manage wage evolution without allowing it to fuel wage inflation by driving up expectations.
Another trend to emerge from the survey is the fact that company tends to leave salaries fairly static, opting instead to given more in benefits like performance-related bonuses, as these are far easier to scale back when economic conditions demand, in addition to being a powerful motivation tool.
“Things are changing. We are seeing company cars become smaller and more fuel-efficient, for example,” he said.
Misco this year also introduced a survey on the HR function in Malta.