For the first time, Sands China’s staff costs will this year surpass the billion-dollar mark as competition for workers in Macau increases and operators award salary rises and bonuses to retain staff.

Following the release of third quarter results, Sheldon Adelson, founder of Las Vegas Sands Corp, said that employees’ compensation and benefits would slightly exceed US$1 billion in 2014, a record for Sands China.

In 2010, the parent company of Sands China spent less than half on its workers (US$450 million) according to official company documents. Following the opening of Sands Cotai Central in 2011, employee costs rose to US$769 million in 2012. Last year, it almost reached the billion-dollar mark (US$927 million), an increase of 20 percent over the previous year.

To investors, Mr. Adelson underlined that “there has been a great deal of noise lately from certain circles about the negative impact of rising labour costs in Macao. Let me share with you that we are more than happy to increase the salaries of our employees there”.
Despite the big increase in staff costs, Sands China has been able to offset labour expenses with revenue growth. In 2014, the total for staff costs will likely represent 11 percent of net revenues. In 2013, labour costs totalled 10.4 percent of net revenues and in 2012 around 11.8 percent.

With a record low unemployment rate of 1.7 percent, a flow of new casinos set to open in the coming years and already some operators claiming there’s a labour shortage the competition to attract new staff and retain current employees will be one of the main challenges of the industry here. According to Bloomberg calculations, Sands China’s average labour costs rose from US$30,400 per worker in 2010 to US$32,800 in 2013. With the recent wage increases and bonus packages, these figures are likely to jump again. In the first nine months of the year, Sands China spent US$812.5 million on staff costs, 19.6 percent more than in the same period last year.
L.G.

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From Macau Business, Luis Gonçalves

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