IN-DEPTH 13 February 2018
The War for Talent
Gambling Insider looks at how the European jurisdictions and their businesses are coping with the talent shortages caused by the continued success of the gaming industry
By Gambling Insider
As the gaming industry expands, so does the demand for talented people to run it. As of late, there has been such rapid growth, particularly in the European licensing jurisdictions, that the pipeline that feeds this demand has started drying up. This has resulted in what is classically described as a war for talent, with companies resorting to offering inflated wages and poaching from rivals.
This is a trend that has been recognised by Alastair Cleland from recruitment firm Conexus Group, as he commented: “The war for gaming talent in Europe’s island jurisdictions has been evident for years, but hiring challenges have become even more heightened in recent months.”
Because it’s such a niche sector that has grown exponentially, and because of the specialist nature and diversity in junior level roles, the situation has been compounded. Demand has grown quicker than the capacity to train people; a lot of training is done in house but from anecdotal evidence if gaming businesses want highly-skilled staff at the moment then they will have to pay them a lot of money for what might be considered a low level job. The situation varies by jurisdiction, which we’ve broken down below.
ISLE OF MAN
With unemployment incredibly low, gaming companies have no option but to import or steal talent. This is something that Director for eBusiness for the Isle of Man, Jonathan Mills has noticed: “We have one percent unemployment so fishing in the local pool is not going to advance anybody’s situation very much. For the most part we’re seeing that our operators are focusing on bringing in talent that’s specific to the territories in which they are operating, so if they are big in Vietnam then they’re bringing in Vietnamese recruits. So we tend to see that when people are moving they’re doing it for lifestyle, and when there’s talent acquisition going on it’s very specific to the market.”
With regard to bringing in staff from overseas territories outside the EU, the authorities on the island are more than happy to welcome new additions and can even help with the process according to Mills: “We have the same visa process as the UK, and we’re happy to assist companies to get certificates of sponsorship. After that it’s a process whereby the employee has to attend a meeting at their local British Embassy and show that they speak English to a decent standard and are in good health.”
The standard of living is a big draw for those trying to attract people to the island. It has the lowest crime rate in Europe, excellent schooling and an attractive outdoor lifestyle. “What we’re ordinarily finding is we’re selling a change in lifestyle when people are looking at moving to the Isle of Man, which is both a challenge and an opportunity for them. As a generalisation, we get people who are reaching a point in their life who are saying “I’m sick of being on the Northern Line in 100 degree heat” so we’re promoting an easy living option along with the low tax and all the other benefits that the island has to offer.”
As if the lure of a care-free life riding horses and playing golf aren’t enough, the more tangible aspects of an employment package are making a big difference in winning the best and brightest. Candidates will naturally seek to improve their wages first and foremost, but with lower taxes, cost-effective living and additional company perks, even a like-for-like move can be a significant upgrade.
Apart from cold hard cash, the benefits side of the package is also a differentiator in this market according to Cleland: “When businesses have their hands tied in terms of salary, the challenge is to provide enough meaty perks, benefits and lifestyle improvements to tempt candidates to relocate. Strong bonuses, healthcare plans and pensions are a minimum standard, and flexible perks are becoming more prevalent; employers appreciate that candidates and employees have a broad range of situations and interests, and therefore ‘one benefit doesn’t fit all’. Use of services like Perk Box, and simply the concept of allowing employees to control their perks, are certainly on the up. In fact, we’re aware of a candidate for a gambling company who received a family skiing trip as a perk.”
The island is also investing in higher education provision, particularly in IT and technology, with the hope that this will provide a more local pool of talent from which to choose. This should provide verticals such as the iGaming industry with a selection of skilled school leavers that won’t require relocation packages.
There’s certainly no risk of the island reaching a saturation point for new businesses either unlike some of the smaller island jurisdictions. With a population of just 85,000 on an island the size of Greater London there is plenty of room for expansion in future, and a legacy of power and internet infrastructure from the finance industry there that will continue to support growth well into the future.
The island of Alderney is part of the Bailiwick of Guernsey, and has been regulating gaming businesses for 17 years. Everyone that works for the Alderney Gambling Control Commission (AGCC) is a gambling expert that has worked in the private sector, and the body is currently particularly keen to help its clients make the most of activity in emerging markets, as Susan O’Leary, Director of eCommerce for Alderney Gambling explains: “We devote a lot of time to investigating new and developing markets, which not only helps improve the regulators’ experience, it also helps a lot of our licencees penetrate and profit from these new opportunities. We are also more than happy to help them and potentially go with them to explore these markets.”
The increase in businesses looking to take advantage of the growth in these new regions has led to a rise in applications for licences from the island, but this hasn’t currently led to any impact on talent flow. As it doesn’t require its licensees to be located on the island, it doesn’t suffer from the panic recruitment that affects gaming businesses in other jurisdictions. O’Leary explains: “Gibraltar and Malta have a requirement for a minimum amount of personnel to be on the ground there in order to gain licenses, and that’s really affecting their business. A lot of Alderney licencees choose to move to Guernsey, and because they don’t have to have a certain quota they bring staff over when they’re ready and when they’re available, and that significantly reduces their recruitment pressures. Because the Bailiwick is developing so much in terms of education and training there’s also an increase in university leavers and school leavers getting into this sector, so there’s an organic growth in the amount of available talent.”
The British Overseas Territory on Spain's south coast has long been a haven for gaming companies, with a Mediterranean climate and favourable tax conditions contributing to its appeal. Times have been slightly more turbulent of late as it has recently lost a bid to shed the UK’s 15% Point of Consumption tax in a battle with the European Court of Justice. The landmark ruling deals a major blow to The Rock’s hopes of achieving a special status after Britain exits the European Union, and this has caused a great deal of concern for gaming businesses located there.
In terms of recruitment activity, Anthony Hennessy from Conexus Group has seen a number of interesting trends on The Rock, as he explains: “The internal movement of talent seems to be drying up, and the inflation of wages has reached a peak. Importing talent is often the only way to fill important roles, and in fact companies are actually keen to benefit from the wider knowledge that external talent brings.
“In terms of salaries, they often cannot be increased (above existing brackets) to attract talent, as the market is small and interconnected – the effect is therefore not ‘increased earnings’ but often simply a ‘longer time-to-fill’ vacancies. Gibraltar still remains an attractive relocation option due to low tax which can halve income tax for high earners. The lifestyle, such as the lure of a Spanish villa with a pool, is still a draw. However, there are concerns regarding recent border developments. Passports are being checked daily and Spanish officials are paying increased attention to daily
One of the hottest markets at the moment, there’s no doubt Malta has benefited from the uncertainty surrounding its nearest rival Gibraltar. The local geopolitical situation in the region, combined with the strength of the Euro against sterling and the tighter political situation in Gibraltar, has seen talent eyeing up Malta as the natural alternative.
“Demand for talent is through the roof at the moment,” explains Hennessy. “New start-ups are setting up every week, companies are moving operations from Gibraltar and attrition rate remains high. Our clients are finding it hard to attract top talent – particularly tech and product – not only in Malta, but anywhere in the EU.”
The booming online gaming industry has led to a massive demand for technology and product specialists for hands-on project and product work for businesses headquartered there. In particular, it is German market-focussed staff – product, marketing, customer service and senior management staff - who are the absolute highest priority for Malta clients. Surprisingly, demand for German specialists even surpasses that for those catering for the Scandinavian market.
Hennessy continues: “Around 40% of our recruitment involves relocating talent from elsewhere in the EU or worldwide. Every week here in Malta there’s a new startup, these are predominantly online casinos but there are also many B2B
suppliers starting up here.”
This flood of new businesses has resulted in top talent leaving the safety of big corporate players to join many of the exciting new start-ups. There, they can springboard into significantly more senior positions, with candidates possessing only a few years’ experience reaching ‘Head of’ and C-level positions in smaller operations. As those in demand at the bigger firms keep an eye on the door, attrition rates are higher than the European average, at about 18 months, but their employers are not giving up without a fight as Hennessy outlines: “To combat this loss of talent, many larger companies have begun introducing loyalty schemes. Staff will get automatic salary increases for staying for over 12 months
and for Heads-of and C-level, this can amount to 15-20k raises, on top of targeting benefits.
“We’re being asked to provide companies with letters stating that no talent can be found within the EU (particularly in tech, and senior management roles), allowing them to sponsor candidates from elsewhere in the world. The overall effect has been a surge in salaries, bonuses and benefits.”
Malta is also looking to bolster the talent pipeline with home-grown talent through investment in education, according to Christopher Formosa, Head of HR and Corporate affairs for the Malta Gaming Authority: “When looking into each jurisdiction from a human resource point of view, one will quickly conclude and analyse the fact that each jurisdiction has its own resource strengths pertaining to the gaming and digital industry, which evolved through the traditional educational system of that particular country. The question is which jurisdiction is willing to invest in talent across the board, offering a 360 package, and help that pool of talent to be part of an evolving growing work force with major roles within the industry? Malta will be launching the European Gaming Institute of Malta (EGIM) with the aim to attract students from Malta and the EU to be part of the learning-working structure being setup by the MGA, its industry partners and other constituents.”
The talent squeeze doesn’t look like easing up any time soon, but with continued investment in the pipeline there is at least hope for the future.