Influx of foreign workers in the Middle East since the discovery of oil has been on the rise, increasing from 31% in 1975 to about 38% in 2004, and total amounting to 12.5 million foreign workers. In Qatar and Kuwait, foreigners constitute a simple majority; while in the United Arab Emirates they account for over 80% of the population. Only Oman and Saudi Arabia maintain a relatively low proportion of foreigners; between 20 and 25%. The numbers become even more alarming when we take into account the fact that about 25% of the locals are unemployed and that about 80-90 million people are expected to enter the working age pool in the region over the next ten years.
Governments Take Action
As the unemployment among locals grew, the local governments took some strategic measures to address this situation; by creating new employment opportunities for nationals and limiting dependence on foreign labour. Some of these measures include mandatory percentage of locals in all companies (commonly referred to as nationalization of the work force), reservations of certain professions for locals only (typically HR), higher and competitive packages for local hires and even inclusion of local employment as supplier selection criteria for public tenders.
Employability Versus Employment
Despite all measures enforcing local hiring (most noticeable being the Nitaqat program in Saudi Arabia), private sector still heavily relies on foreign work force. The reason is simple; lack of suitable skill set in the local hires. A recent report based on research by McKinsey Education for employment: Realizing Arab youth potentialprovides insights into the alarming disparities in education system and the required employability skills. For example private sector respondents in the survey claimed that only 33% of the local graduates are equipped with the necessary employability skills.
So while the governments are focusing on creating more jobs, it seems what they need to focus on is to equip locals with necessary skills that make them an attractive hire for local companies.
How Private Sector can help:
There are some commendable initiatives from private sector in the region to address the employability gap for locals ranging from vocational trainings, entrepreneurial opportunities and Management Training programs. Most of these however are from big companies and for smaller sized companies in the region especially family owned businesses; the dilemma is not knowing where to start. Having worked with a couple of companies in developing their economic empowerment strategies, I suggest the below as the starting point for any company intending to address the issue of local employment:
- University grants for future potential employees. This may be one of the most underrated mode of private sector investment but the companies who have used this have had major pay-offs in terms of tapping onto exceptional local talent and by enhancing their company image.
- Specialised industry trainings, education and work-readiness programs leading to employment are areas where the private sector can contribute significantly especially by partnering with renowned training institutes.
- Company sponsored employee development programs where companies can sponsor further education of their own employees.
- Enrichment of existing government funded trainings programs. Many governments in the region offer state sponsored training programs that are aimed at creating skills needed for the job market. One example is the Human Resource Development Fund (HRDF) in Saudi Arabia. Local companies can collaborate with the government funded programs to tailor the offerings to their industries.
- A transparent hiring and recruitment mechanism which makes the job requirements open and accessible to all applicants. This will in turn enrich the talent needs pool/ database. Companies need to tell the market what their ideal candidate looks like in order to encourage the enablers of talent to create those skills ion the graduates.
- Blurring the lines between academia and the corporate world. The input of industry professionals in the academics can enrich the later so that the future graduates have an insight into the way corporates work. Some companies have their top management appear as guest speakers or offer student workshops run by their management. Such engagement activities are also an excellent resource in positioning the company as the employer of choice.
Conclusion….and a funny stereotype
A few months ago, there was a quote circulating on Facebook that went something like this:
Japanese Attitude for Work
If one can do it, I can do it. If no one can do it, I must do it”
Middle Eastern attitude for work
“Wallahi if one can do it, let him do it. If no one can do it, ya-habibi how can I do it?”
After the initial laughs at the expense of my Arab co-workers, the sheer maliciousness of the words sank in. Being the only non-Arab in my office and having dealt with mostly Arab clients, I think the above constitutes one of the worst stereotypes locals have to deal with. If the locals are indeed as useless as some imply, then all of us should be ready to take the blame; the governments for not addressing the real issue, the private sector for hiding behind the excuse of “no talent” and the expat workforce for poor knowledge transfer. Having made fortunes off the region, all of us owe it to the people here to take action; it is time we all take responsibility to ensure that we welcome the 90 million with the respect that they deserve.
Photo Credit: Charles Fred-Flicker Creative Commons