Nationalisation isn’t just about the numbers
As the spotlight falls on the private sector, an attractive pay packet won’t necessarily tempt locals into jobs
It’s early April and at the Dubai World Trade Centre, clusters of young Emiratis are trooping around Careers UAE – a fair designed to give them face time with companies looking to hire. Mobile devices and enthusiasm abound in equal measure as these nationals – mostly recent high school and university graduates – comb the event looking for a first foray into their country’s workforce, picking up branded bags and job hunting tips along the way.
A diverse collection of 80-plus potential employers have lined up to meet them, including government organisations, state-backed enterprises and big brand names from the private sector. In a scene repeated at careers fairs, open days and recruitment drives around the GCC, a youthful and typically well-educated population is trying to find jobs that will set them on a rewarding career path. But despite keenness from employers and prospective employees, the numbers suggest not everyone is getting the result they want.
Figures from the World Economic Forum study Rethinking Arab Employment suggest the percentage of youth who are unemployed across the GCC is more than double that of the overall unemployment rates. The problem is most acute in Saudi Arabia – a 2014 World Bank estimate put unemployment among Saudi 15 to 24-year-olds at 29.5 per cent – but all states bar Qatar are dealing with a double-digit dilemma.
Add to this the region’s growing population – forecast to hit 53 million nationals and expatriates by 2020 – plus its distinct demographic youth bulge, and the pressure for GCC economies to create jobs becomes evident.
As the public sector has less capacity to absorb the swelling numbers of available workers, governments are looking to the private sector for solutions. However, private sector firms have traditionally found it tough to encourage nationals into their ranks – so much so that many don’t bother trying.
All too readily, the central challenge has been dismissed as a product of disparity. For early career employees, compensation and benefits in public sector jobs typically outpace what is available in the private sector. But to identify that as the singular cause misses the more nuanced differences national jobseekers see in the opportunities, as well as ignoring the factors that challenge both sides of the employment equation to do better.
“A key challenge is access,” says Clare Woodcraft-Scott, CEO of the Emirates Foundation, whose Kafa’at programme delivers career development projects to young Emiratis. “When we talk to the private sector, they tell us they’d love to hire more young Emiratis, but they don’t have access to them. And when we talk to young Emiratis, they often say they want to know more about what the private sector is. There is a real gap between the understanding of young Emiratis about opportunities in the private sector and misperceptions on behalf of business on how to hire them.”
Woodcraft-Scott says there is still much to be done in terms of helping young people understand the opportunities within local businesses and to get past the stereotype that it means working for a big multinational in an unfamiliar office environment. She perceives a huge opportunity for companies to hire local talent, but they also need to make sure young nationals have proper support, a mentor, a fulsome induction process and a clearly defined role and responsibilities. Crucial to the process is providing career path options and details of what needs to be achieved to traverse them.
“How can you navigate the local market if you don’t have someone from it?” she says. “We need to make sure both sides of the equation have an understanding of the opportunity. There’s a value proposition for both sides, but more work is needed to bridge the gap between the two.”
Academia has some catching up to do, particularly if it wants to make students more aware of the opportunities emerging within the new downstream industries being developed by the Gulf economies as part of long-term diversification drives. But it’s also about recognising what are attractive career paths for nationals. According to research by Oxford Strategic Consulting (OSC), despite considerable government investment, the UAE aerospace and manufacturing sectors are among the least favoured areas of employment, even through the region has been gearing up for its just-launched National Space Programme. Aligning what people see as attractive employment areas with the skills a country needs is an important strategic consideration, suggests OSC’s Professor William Scott-Jackson.
“GCC countries are planned economies run from the top – it’s clear what the strategic capabilities are,” he says. “Saudi Arabia’s Vision 2030 says it will become self-sufficient in military manufacturing, which involves hundreds of thousands of people being skilled at that, so we know that by 2030 Saudi Arabia will have all these people working in [that sector]. But if we are encouraging people to do degrees in media studies or some other topics, not building toward strategic capabilities, then the education system needs to respond to that and build the required capabilities – and that doesn’t happen.”
A closer look at the motivations and preferences of nationals around the GCC will quickly show that there is no one-size-fits-all approach. While it’s natural for people to want to be paid as much as possible, OSC’s research has shown money is not the only motivator. Emiratis view flexible working hours and international assignments as other ways in which employers can attract nationals. In Saudi Arabia, helping the country and making their family proud are almost as important as compensation. And in Qatar, helping the country comes second to pay by just a single percentage point.
The impact of patriotism is a cultural component perhaps underestimated by the private sector, as it is a significant influence. “It was considered a patriotic duty to work in the public sector, so that still lingers,” says Trevor McFarlane, managing editor of Emir Intelligence. “Because this generation coming through is the first to be exclusively encouraged to work in the private sector, there’s no tradition, so there’s a basic gap in knowledge and awareness. You can’t be what you don’t see.”
Collaboration will be the key to further success, with greater engagement between private sector employers, educational institutes and policy-makers driving more meaningful change. “Greater focus on graduate and training programmes will improve training and see more nationals going up the ladder, and all of a sudden we will have more role models and there will be some momentum,” says McFarlane.
The progress national employees make in their careers is an emerging focus for quota systems still in play in regional labour markets. Once a simple numbers game, this supernumerary approach is being refined toward a deeper and broader understanding of what nationalisation means, shifting the focus from talent acquisition to development and engagement. “For policy-makers, there is increasing recognition that the advantages of the old approach have already been banked and further developments need new approaches,” says David Jones, founder and CEO of The Talent Enterprise, a Dubai-based consultancy.
These new approaches include Saudi Arabia’s weighted Nitaqat programme, which places an emphasis on measuring the quality of employment nationals are engaged in, not just their sheer number. In the UAE, the introduction of an Emiratisation Partners Club grades companies on their nationalisation performance in a similar manner to Nitaqat.
Both offer some benefits of flexibility and premium services in return for enhanced levels of performance. Businesses able to respond to and work with these changes may find themselves at an advantage in the future, especially if mandatory requirements increase. “The private sector is a new frontier of nationalisation getting the most attention from policy-makers, and I think the important thing for HR professionals is to really try to broaden their scorecard on nationalisation,” says Jones.
The systems put in place in Saudi Arabia and the UAE are in part trying to address the clusters of nationals that gathered in certain sectors and areas of businesses, often causing career bottlenecks. These groups create organisation profiles that Jones says look like vertical dumbbells, where nationals are present in executive positions and at lower levels in administration and customer service, but their numbers thin in middle management and more technical roles.
There is also a sense that young nationals in particular need to be seeing more peers and role models within organisations in order for those places to become more attractive workplaces. This catch 22 situation is exacerbated by the impression young people get when they first enter an organisation. “The quote that sticks in mind is when many young people walk into the workplace for the first time and they report that it feels like they are walking into Jurassic Park,” says Jones.
It’s a reaction Jones says comes from the fact these young people are asked to work with anachronistic intranet sites, handed old devices to use as smartphones and given limited or no access to the internet. “This is not how they’ve been able to be productive in their studies or their social lives,” he says. “The young population in the region are very tech savvy, they need to be able to use those tools that support their productivity and their contribution to the organisation. Let them work in a way that suits their strengths.”
There are certainly many initiatives in place for increasing the number of nationals in employment, but whether nationalisation is a magic bullet for the region’s workforce issues is more heavily contested. A 2012 paper by Kasim Randeree, at the time a senior researcher at Saïd Business School and Kellogg College, University of Oxford – Workforce Nationalization in the Gulf Cooperation Council States – noted that much of the current literature on the topic focused on the causes and means of nationalisation schemes, with only a limited body of evidence existing to shape the success of such programmes.
“Education, training, the transfer of knowledge from expatriate to citizen, better approaches to encouraging citizens into the private sector and the greater inclusion of women are all significant issues that need to be tackled to fulfil the desired goal of nationalising the labour force across all GCC states,” says Randeree.
Arguably, the task will not be complete until there is no such thing as ‘nationalisation’ and the notion of expat and local workforces becomes irrelevant. But companies operating in the region have a chance to get ahead of the regulatory trends, engage more closely with their local communities and strive to attract local talent. Those that do so will be building a more sustainable talent pool for their operations and helping to make the most of the region’s most abundant natural resource: its people.
“Every morning we go out and motivate people”
Attracting and retaining nationals means a scheme that reaches out to the community, supports recruits and nurtures careers
Sultan Khalifa bin Hayah Al Ali is both a product of RAKBANK’s dedication to the nation it operates in and one of its greatest advocates. As head of Emiratisation, the 11-year veteran of the bank is at the forefront of making nationalisation a reality and knows it is a combination of many factors that draws in his fellow citizens.
“We go to colleges and universities to [explain to] young Emiratis why they can join the banking sector, how it will groom them and what development [they can expect] to enhance their skills to become a future leader,” he says.
In what stands as a strong contrast to many other parts of the private sector – where nationals may struggle to spot a peer or find a role model – Al Ali and his colleagues put themselves in the public eye to demonstrate what can be achieved by working in the private sector. Having held multiple roles throughout his tenure, he is an example of how the firm looks to fill vacancies from within its own ranks. “A person my age would not be where I am working in the government sector,” he says.
Transparent development planning is key to how RAKBANK supports its people, encouraging retention by making potential career paths crystal clear. Training and education bolster development, which includes working with third parties such as the Emirates Institute for Banking and Financial Studies – with whom the bank offers a graduate training programme – and internally managed training for new entrants. More senior team members may also be able to participate in a leadership programme run by the Darden School of Business. Mentoring plays a huge role, helping those who are out of the education environment for the first time to adjust to the workplace and thrive.
“We don’t want people to come and feel they are not taken care of,” says Suhaila Al Jesmi, RAKBANK’s deputy HR director. “Every morning we go and motivate them and see they’re doing well.”
The bank’s success in this area saw it play a pivotal role in the delivery of one of the first initiatives to run through Dubai’s Government Accelerator, where cross-sector teams come together to tackle key national challenges. A banking and finance team, including RAKBANK, was assembled to deliver 1,000 jobs for Emiratis in 100 days.
The bank’s participation in the project – which resulted in 38 new starters in its own organisation – offered a significant learning opportunity, as head of talent and learning Craig Austin explains: “It showed the importance of developing a deep relationship with government to understand some of the challenges faced centrally.”
“Nationalisation is built into our contracts”
Serco Middle East is offering roles with purpose – and that is more effective for the bottom line than simply filling quotas/em>
Purpose matters for nationals entering the private sector workforce and Serco, which operates in five countries in the Middle East, offers purpose in spades. With projects spanning the aviation, defence, integrated facilities services and transport sectors, the company cares for, operates and maintains high-profile and popular public services around the region.
Delivering essential services to customers on behalf of governments, semi-governments and large private corporations has helped it attract and retain nationals within its ranks. Serco currently has more than 140 UAE nationals in its transport division and more than 150 Saudi nationals in its facilities business. It also works closely with the Iraq and Bahrain governments, training their respective nationals in air traffic control.
The nationalisation success it has experienced is the result of a systematic and programmatic approach to a carefully thought out diversity and inclusivity strategy, which not only takes into account the big picture aims of the organisation, but also takes the time to listen and respond to the needs of the people it affects.
“Nationalisation is at the heart of our contracts,” says David Greer, CEO of Serco Middle East. “In each area, nationalisation is top of the agenda and built into the contract. We see nationalisation as an opportunity, a strategic imperative – one that can make a difference to our business performance.”
Greer says it’s not just about setting targets, which can sometimes miss the point, but about a change of culture to one that attracts, retains, motivates and develops national staff. The business benefits by having a great team, but effective nationalisation also helps it stand out, acting as a crucial differentiator when the business is being considered for new work, especially state-backed contracts.
While the company’s strategy provides the driving framework, it also makes the small details count. Greer hosts a daily walk-in meeting known as ‘tea at three’, making himself available to anyone to have a chat and a cuppa. These meetings have given him and the organisation critical insight into important cultural subtleties and enabled rapid change to address issues and retain staff.
“Our approach to nationalisation isn’t just about implementing a range of development programmes that are fundamental for nationals,” says Greer. “We are also looking at ways to build knowledge transfer, develop robust inclusion practices and ensure we have the right national talent to operate and manage our business for the future. Our ambition is that, over time, nationals will run the Serco business in the Middle East. We have made progress, but we can do so much more.”
“We are investing in the next generation”
The Qatar Financial Centre Regulatory Authority sees nationalisation as central to business continuity
As the COO of the Qatar Financial Centre Regulatory Authority (QFCRA), Eisa Abdulla wants to help build a successful organisation. In order to do that, he knows he will need access to a sustainable pool of talent who will be the organisation’s future team members and drive its progress. Nationalisation is central to achieving this, as it will bring stability and continuity to the regulatory authority’s operations.
“Stability is one of the most important things and I look at nationalisation as a tool to bring business continuity,” says Abdulla. “You need to invest to feed the organisation with people who will stay and develop others to become a self-sustaining and self-operating organisation with nationals.”
Abdulla says it is important the organisation builds a platform to bring the right Qatari talent into the business, empowering them to succeed. “I don’t think of it as nationalisation,” he says. “I look at it as a professional succession plan where we are investing in people to grow, investing in the new generation and investing in talent – and in this case it happens to be Qataris.”
It’s a process that starts with building awareness among the next generation about the variety of roles at QFCRA and how it will work with them to develop their capabilities. This includes engaging with universities and even two high schools to help get more information to the future talent pool. The authority also engages directly with the parents of potential recruits, who can be very influential when it comes to the career decision process. This reflects the importance Qataris place on making their family proud.
A key attraction for prospective employees is a clearly laid out and structured plan for career development, known as Al Masar. The five-stage plan guides graduates through a clear pathway into leadership roles, or technical expertise, depending on what they want to pursue. The plan provides a guiding framework for potential progress, but is flexible so it can be individualised. “We build the path, but how to accelerate is up to the individual,” says Abdulla. “It is done in a coaching style. We build the expectations of the individuals and what they need to do. We enable them but, at the end of the day, it is a personal development plan.”
Inside track UAE
- 54% Emiratis who want to work in the public sector
- 74% Emiratis who feel the private sector is very or extremely important for Emirati employment
- 30+ Those aged over 30 are more likely than those aged under 30 to want to work in the public sector (60% vs 49%)
- 54% Emiratis are significantly more likely to want to work in administration than any other job role
Source: UAE Employment Report, Insights for 2016, Oxford Strategic Consulting
Inside track Qatar
- 60% Qataris who want to work in the public sector
- 19% Qataris who feel the private sector is very or extremely important for Qatari employment
- 57% Qataris who say helping the country and contributing to society is one of their top three motivations
- 43% Qataris who cite making their family proud as one of their top three motivations
- 3 Main issues Qatari nationals face when finding jobs: low pay (45%), no contacts (40%), not hearing about jobs (35%)
Source: Qatar Employment Report, Insights for 2016, Oxford Strategic Consulting
Inside track Saudi Arabia
- 52% Saudi nationals who want to work in the oil and gas sector
- 36% Saudis who cite helping the country and contributing to society as one of their top three motivations
- 35% Saudi nationals who say making their family proud is one of their top three motivations
- 37% Saudis who cite running their own business as their ideal future role, the most frequently selected option
- 57% Saudi nationals who feel the private sector is very or extremely important for their employment
Source: Saudi Arabia Employment Report, Insights for 2016, Oxford Strategic Consulting
Youth unemployment (% of total labour force aged 15-24)
- Bahrain 10.9%
- Kuwait 19.4%
- Oman 18.8%
- Qatar 1.3%
- Saudi Arabia 29.5%
- UAE 10%
Source: The World Bank, 2014