|For the last few years, a brain drain has been depleting Lebanon of its human talent. One of the many sectors to be hard hit by emigration, losing its brightest and most qualified employees to foreign shores, is the banking sector, Lebanon’s largest employer. To curtail the trend, banks have been looking into their competitors’ backyards, luring in top individuals to beef up their staff.|
“A severe competition for qualified personnel is undoubtedly pitting Lebanese banks against their regional counterparts,” said Rabih Yaghi, head of human resources at Bank of Beirut. Foreign banks appeal to Lebanese employees with higher salaries and a larger structure — thus better advancement opportunities. Most bank employees who resign from their positions in Lebanon move to the Gulf countries.
“In the Gulf, bonus schemes and career advancement opportunities are tremendous,” reckons Adel Hechme, HR manager at Banque de la Mediterranée. “Bank employees are increasingly prone to accept a 15% to 20% markup on their packages, anticipating a doubling-up of their income potential on the longer run.”
In his opinion, it is not the actual pay that shapes the decision making of employees leaving for the Gulf, as they are often offered similar packages in Lebanon when cost of living and inflation are added to the equation, but instead “local institutions cannot really compare in terms of medium and long term opportunities provided.”
Getting and keeping a qualified workforce
Attracting qualified personnel at the junior level is a concern for most institutions facing the challenge of going after candidates from top universities.
“Our policy is to go after the actual candidate. We do not discriminate against anyone as long as they have the right academic background, personality abilities and skills,” Hechme explained. Regional institutions tend to target employees with three to four years experience, or with a seven year seniority. A background in corporate banking or finance is often greatly desired. Elie Abi Chahine, HR manager at Byblos Bank, believes that credit officers and employees from capital markets and banking technology are sought after by most local and international institutions.
Other sectors witnessing high attrition levels include private banking, as bankers flock to Gulf where financial markets are fueled by skyrocketing oil prices. On the local level, banks also try to draw in qualified employees to their credit department, and because of limited local resources are forced to look into their competitors’ employee pool. “Junior dealers are another type of employees who are also in great demand,” according to Hechme. Lebanon financial markets are also dwarfed by the mere size of the regional financial scene.
Can the grim situation be partly attributed to lower salary schemes applied in Lebanon? In most local banks, entry level salaries vary from $650-900. At the higher managerial level, a distinction is made between support and revenue generating positions and salary brackets also depend on scarcity of employees and their individual abilities. “We are currently witnessing a depletion of top universities’ MBA holders, who are leaving Lebanon for the Gulf,” Abi Chahine admitted. At the entry level, MBA holders will earn some $100-200 more than BS or BA holders. “Another thorny issue is that candidates have become more demanding and expect to rapidly climb the managerial ladder, often despite their lack of proper qualification,” he complained. The manager reckons that in recent years, banks have been able to retain employees at the corporate level, while attrition levels are higher at the branch level.
Yaghi attributes 70% of total number of resignations to employees departing for the Gulf and the West, while the remaining 30% is recruited by other local banks, also including resignations of senior managers who leave their employer to accelerate their career by seeking a higher position in a smaller institution. At the local level, rivalry for the best employee usually takes place between banks of relatively similar size.
“Employees who abandon their position in local banks are also often motivated by security concerns, the political instability affecting to a great extent their decision making process. Evidently, appealing career plans featured by foreign companies also account ultimately for their choice,” Abi Chahine said. The manager estimates attrition levels at about 6%, but this figure might be misleading as it also includes housewives who follow their spouse, or employees retiring at the end of their service. Hechme believes that “attrition levels reach about 6.8% for the whole Lebanese banking sector, of which 3% equal to real attrition, a figure roughly equal to international standards.”
To reign in the trend and retain their staff, human resource departments aim to develop a clear career path for their employees and positive bonus and salary schemes. Regardless of the measures taken, they are also required to develop contingency plans, allowing for replacement to rapidly step into a vacant position. Yaghi believes that training is another essential tool at the hand of HR managers, however, one that has been affected by the dwindling number of professional companies who, like Lebanese employees, are looking to further to the east.
“Attrition is an international problem that plagues all institutions around the world. CitiBank is a perfect example; it is after all considered by the global workforce as the biggest school in the banking world. I don’t think we can describe the prevailing situation as an actual war but the by-product of an economic reality where supply is scarce and demand quite important,” Hechme emphasized. He believes that high retention levels at Banque de la Mediterranée are due to a fair incentive and bonus system, good career paths supported by clearly defined job competencies and professional training backed by a reward based performance management culture.
“We operate in an open market environment and recruiting employees from other institutions is allowed as longs as it is done ethically, and avoids targeting one institution in particular,” explained Abi Chahine. Nonetheless, on the local level, reality is quite different with banks to this day engaged in an undeclared tug-of-war for the best candidates, underlined by ancient, and often personal, rivalries among the top management.