Gaming runs the jobs game: top-tier salaries reach €200,000

Maltese businesses are increasingly finding it hard to compete with the salaries being offered by the island’s remote gaming industry, as this high-performance sector keeps offering higher salaries to retain the best talent possible.

Generating over €55 million in tax revenue in 2015 alone, the gaming sector is now attracting top-tier executives on salaries averaging €120,000 and going as high as €200,000, and lower-end operator staff on average salaries of €30,000.

It’s a situation that leaves traditional Maltese businesses unable to compete on salaries when trying to retain talent that is skilled enough to join the gaming industry.

“There is an element of wage inflation because this is an industry that has high value-added,” says Joe Farrugia, director-general of the Malta Employers Association, who acknowledged the reality of home-grown employers unable to compete with gaming’s salaries.

“It’s an employees’ market right now, and employers are competing with each other in this factor market. The gaming sector has the advantage to offer better salaries than other businesses which have lower value-added.”

Much of gaming’s higher salaries are derived from the industry’s willingness to pay above the going rates to retain quality talent and fill up vacancies quickly, says Julian Perigo, managing director of Bostonlink Recruitment, which mapped up the Maltese gaming salaries in a recent survey.

“Given that the higher salaries aren’t tied to just some skills (although tech and language skills do demand a premium), I believe what we are seeing is a time-lag: the impact of supply and demand in determining price isn’t immediate and even across the economy, but it does level out over time,” Perigo said, which means other sectors will catch up over the longer term as the demand for skilled staff in Malta increases overall.

“The gaming companies are simply the ones at the crest of the wave as they have the most pressing demand for new skills.”

Perigo acknowledges that what the Maltese are witnessing is the speed at which this is happening. “The impact of this only seems uneven because of the speed at which it is happening, but ultimately the upwards pressure on wages – and therefore disposable incomes – will impact on the whole economy in the medium to long term,” he says of the industry that is contributing 12% of Malta’s gross domestic product.

One of the attractions of gaming, Perigo points out, is that lucrative careers are being created for people who may have not reached graduate and post-graduate levels – perhaps at the core of employers’ gripes, who will not pay top dollar for non-graduates.

As Maltese skills catch up with the foreign influx, a perception of income inequality may have set in. Not just between high and low-skilled workers, but also within a middle class of service workers who are in jobs that will never pay as high a salary as gaming.

“Gaming is a very volatile sector,” Joe Farrugia says of the incentives that the industry enjoys to retain its Maltese foothold, suggesting that companies must be kept happy to keep their bases here. “It must be protected, but the government’s fiscal policies must also protect those who are not part of this sector. Tax incentives are certainly creating an uneven playing field. We also have members from the gaming industry, and we can see why traditional employers feel they cannot always compete for the retention of highly skilled workers.”

Perigo does point out that it is preferable to see gaming bringing in new jobs – pushing wages up – rather than seeing the Maltese talent take up the same jobs elsewhere. Today the sector employs one Maltese for every two foreign, mainly EU, worker.

But Perigo says that it is not only salaries that traditional businesses must compete on, pointing out that they must change their approach to talent acquisition.

“We need to recognise that salaries alone do not determine a person’s job choices – we see this all the time in recruitment. In fact, traditional industries need to learn to compete on a broader playing field than just salary: they need to adapt to offer more flexible and remote working, more childcare support, better inclusivity and accessibility practices, better pensions packages, more personalised benefits and rewards, and better working environments.

“Not all of these changes require higher cost – many of them are based on the culture and the flexibility of the employer. To give the gaming industry its credit, it is pushing boundaries in all of these ways and more, to the great benefit of the Maltese workforce.”

Salaries and attracting talent 

The BostonLink survey found that while executive pay in Malta continues to be competitive and high performers can demand impressive salaries, average base salaries range between €90,000 and €140,000 a year.

For top executive salaries, the upper limit of the salary range – for example a CEO could be earning up to €200,000 – is less absolute than for other salaries. While high outliers were eliminated for the survey, the most well remunerated executives are already earning significantly more than the ranges presented in the survey.

So while a CEO of a gaming company in Malta can expect to earn some €140,000 a year, some are are earning up to €200,000 a year. Other average salaries range from €130,000 for a marketing director to €120,000 for a number of positions from chief operating officer to an IT director and €90,000 for an HR director.

And C-suite positions tend to be subject to performance-related bonuses in addition to base salary and benefits.

The companies who are winning over key talent from abroad are the ones who provide correct advice on relocation, setting up bank accounts, social security, know the best real estate agents, and have a knowledge of the schooling system.

“While the relocation package is unlikely to be the key driver of an individual’s decision to accept a role, it will undoubtedly influence their decision,” BostonLink says, suggesting that a one-way flight, three weeks in company or hotel accommodation, and some €1,500 in relocation expenses, are part of a standard package.

Average base salaries range between €90,000 and €140,000 a year

Foreign workers address skills shortage

Growth in the services sector in Malta surged ahead after accession to the EU, a Central Bank report published in 2016 explains.

“Better educated labour resources and a targeted strategy to attract foreign direct investment opened up further services sectors. Besides the traditional areas of tourism, education, health, retailing and banking activities, the services industry expanded to include higher value added activities generated by the financial services sector, specialised forms of tourism – like language schools and dive centres – maritime activity, professional services, back-office administration, information technology and gaming.”

The foundations of Malta’s remote-gaming industry were laid in the early 2000s with a favourable licensing and taxation regime that attracted the business to Malta. Its demand for labour, much of it sourced from across the EU member states, made the sector dependent on migrant workers.

These skilled foreign workers filled Malta’s own skill shortage, leading to a more diversified economy that made it less subject to industry-specific shocks.

“Take textiles for example,” says the Malta Employers Association director general. “The industry ran aground in Malta as globalisation permitted more of these businesses to outsource their production lines, in turn resulting in thousands of jobs lost. A diversified economy is what allows a country to absorb these job losses, as long as the skills are matched.”

Over 10 years since Malta’s accession to the EU, the number of EU nationals grew 13 times to nearly 15,600, apart from 6,200 third-country nationals. This rise in foreign workers is mainly clustered at both ends of the skill spectrum: a strong demand for high-end skills the Maltese don’t have yet – such as gaming – and a demand for labourers who will do jobs that the Maltese don’t take, in catering or cleaning for example.