Kippreport investigates if oil prices aren’t the only cause for the market slumpAugust 27, 2015 12:00
Changing the outlook on Emiratisation
Experts say the quota system isn’t working and it’s time to focus on levels of engagement at the workplace
March 2, 2014 5:01 by kippreport
There is no one-size-fits-all solution when it comes to employing more Emiratis in the private sector. According to Mina Morris, managing consultant at Hay Group, it’s critical to understand the specifics of all organisations and find a bespoke solution that meets their needs.
Emiratisation in the private sector is set to increase by ten times over the next seven years, as per the directives of His Highness Sheikh Mohammed bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE, and Ruler of Dubai. Earlier in January, he tweeted: “The government will take action in case the private sector falls short of fulfilling the Emiratisation resolution.”
Morris says that there are significant differences across sectors, such as banking, for example, which has less difficulty in attracting nationals than retail. Hay Group’s research shows that 55 per cent of the 30,000 nationals it has on its database are employed in the banking or oil and gas sectors, whiletenper cent is working in the telecoms industry. “The key for any sector is to understand what’s attractive and position the employee value proposition accordingly,” Morris adds.
Quotas and regulations can only go so far in helping the situation, says Professor William Scott-Jackson, chairman of Oxford Strategic Consulting. The UAE introduced rules in 2005 that required financial institutions to increase their Emirati workforce every year, by as much as five per cent. “We think quotas and regulations have their place in the early stages of nationalisation. Now, however, government efforts should be directed to building talent that the private sector needs.”
According to him, this includes identifying skills that the economy will need and focusing on building capabilities through education, training or financial incentives.
Prioritising the problem
The 2011 Labour Report, which was published by the National Bureau of Statistics, reveals that only 19,874 of the nearly 3.9 million employees in the private sector are Emiratis – which is close to 0.5 per cent of the total share. Meanwhile, unemployment rates in the national workforce range from between 12 per cent and 14 per cent.
“Given the numbers, Emirati talent should be a highly valued, but scarce resource, which should be in extremely high demand,” says Scott-Jackson. “Currently, there are some pools of national talent that are scarce and fought over (eg graduate males living in Dubai or Abu Dhabi), while other pools of talent are underutilised, such as females and non-graduates living in Ras Al Khaimah.” He notes that, while some companies are finding ways to attract this talent (for example, Etihad Airway’s female-only call centre in Al Ain), the private sector “needs to get a lot more analytical and imaginative, rather than just blaming the public sector and assuming that all Emiratis want an easy life with easy money”.
Morris agrees, saying that a key trend has been the realisation that this is not a HR problem that can be solved by only imposing quotas. “It has to be an item on a CEO’s agenda or the senior leadership team’s scheme.” He explains that Emiratisation as a concept has to become a wider business initiative.
Many firms get into the process with the wrong approach, not keeping in mind the cultural sensibilities. Morris says one bank that he worked with had the idea to offer locals the opportunity to work in New York or Singapore for a couple of years. However, “that doesn’t keep Emiratis engaged”. He points out that, while a two-week stint might have been an incentive, taking them away from their families and home country for that long a period was not an appealing offer.
However, attracting nationals to the private sector is less than half the battle, since the quota schemes managed to hire Emiratis. The problem, however, comes with retaining and integrating them into the fabric of a company. Morris explains it’s necessary to offer a career development path that can include training incentives, but, most importantly, a clear path to moving up the corporate ladder in order to get them engaged with the organisation.
Another concern comes in the form of competition from the public sector, which still proves attractive for many UAE nationals. According to Scott Druck, partner at Oxford Strategic Consulting, many Emiratis are attracted to government jobs because they are motivated to serve their nation, but “they can also help the country” by working in private sector companies.
He also iterates the importance of keeping in mind cultural values, including those of family prestige. “Emiratis want a job their families can be proud of – so private sector companies need to make their firms ‘pinnacles of pride’ for families by speaking with them early (at school), presenting a great image and by ensuring their environment is known for respectability, challenge and is high profile.”
Druck adds that the private sector has the added advantage of helping nationals move up the ranks quickly and has significant importance for what the UAE needs in the long term. “We calculate that, due to demographics, approximately 64 per cent of Emiratis need to be leaders if the country is to be run by nationals. This is eight times more than in the UK, for example, and is an enormous challenge.” He says by working in the private sector, Emiratis have the ability to “fasttrack” and get intensive development – thereby, fulfilling a key UAE strategic need.
The Ministry of Labour is currently in the process of revising its policies of Emiratisation in order to meet His Highness Sheikh Mohammed’s 2021 Vision.
Scott-Jackson suggests that it could be helpful if government employees were injected back into the private sector since “the public sectors in most GCC countries are over manned due to their governments’ admirable aim to reduce unemployment”. He points out another possible option, which is to ensure that anyone wanting to work in the public sector must have at least one year of experience in the private sector.
“The first idea implies a role for the public sector to develop and train talent, which can then join the private sector, and the second recognises the value of experience and gives the private sector a chance to impress young Emiratis,” he concludes.