Lighting the way for UAE nationals in the private sector

Written by
Changeboard Team

11 Nov 2014

11 Nov 2014 • by Changeboard Team

Unemployment rates among nationals

At present, nationals represent just 16.5% of the total population. So it’s likely that industry will continue to rely on significant numbers of expatriate workers, at least over the medium term. What’s worrying, however, is that the unemployment rate among UAE nationals remains stubbornly high: up to 14% of the national workforce is currently unemployed, and despite high rates of women in higher education we continue to see significantly fewer women than men in employment.

While there has been a marked increase in efforts across the board to drive forward Emiratisation, there is still a clear gap between the successes of the Emiratisation efforts in the public versus private sectors in terms of numbers. These efforts in the public sector have produced strong results, however the number of nationals taking up jobs in private industry remains low, with figures showing that nationals in the UAE make up a meagre 2.4% of the private sector workforce.

But just why is the private sector failing to attract talent from the national pool? It’s clear that the private sector is at a significant disadvantage to the public sector in that it simply does not offer the same reward packages and benefits. However, our research shows that, despite the pay argument, there are other factors that go some way in determining successful nationalisation programmes.

Learning from global peers

When we look to other countries that have faced issues around nationalisation of their workforce, it quickly becomes apparent that there aren’t many templates for the GCC countries, and in particular the UAE, to draw on. One exception is Norway. After the discovery of oil in the 1960s and 1970s, and the subsequent economic boom, Norway was heavily reliant on an expatriate workforce and needed to develop local talent rapidly.

The Norwegian approach was multi-faceted. It involved tight national controls over both oil reserves and production, strict immigration policies, and a planned and focused effort on improving the skills of local talent via education initiatives. It is also clear that Norway went through a rapid process of gender diversification within its own workforce at the same time. In Stavanger, known as the ‘oil capital’ of Norway, the large expatriate workforce present during the 1970s and 1980s steadily declined as local Norwegian expertise developed.

It’s clear that a key contributor to this was Norway’s ability to draw on both male and female talent due to diversification of the workforce. The experience of the Norwegian oil and gas sector suggests that education and focused efforts to develop national talent are critical when a country is looking to nationalise the workforce, and that being able to draw on both male and female talent is key to long-term success.

Education or employment?

Here in the Middle East, the challenge is not necessarily around the education of women – in the UAE, more national women are graduating from university than men – but about their participation in the workforce post-graduation. Data from the World Bank indicates that, although the global rate of female labour force participation is approximately 58%, the rate in the Arab world is generally much lower and in the UAE specifically, just 47% of women aged 16 to 64 are in the workforce.

Clearly, attracting women to the private sector only addresses part of the wider problem of national participation in the private sector. However with a small national population, improving utilisation of both genders offers the opportunity for significant gains overall. Our research in the UAE, and project work with clients, indicates that there is much organisations can do to attract and develop national talent beyond looking to compete with the public sector on pay and benefits, which is not a long-term solution. To successfully attract and retain Emiratis, organisations can work to develop these softer elements of their employee value proposition in order to create more successful Emiratisation programmes.

The big idea

Based on our research into employee engagement and enablement, we have created a list of recommendations that UAE organisations can use as a starting point:

  • Put your finger on the pulse. The only way to truly understand what is happening within your company in terms of work climate, development, engagement and enablement is to measure it. What are nationals in your organisation looking for? Broader development opportunities? An international environment in which to work with experts from around the world? A role in building the nation?
  • Support Emiratisation outside the recruitment department. This includes areas such as performance management and career development and runs across all expatriate and national employees and line managers. Make Emiratisation an inclusive process and not only for Emiratis by Emiratis.
  • Embrace gender diversity. Our experience in the UAE banking sector highlights that female voices are often drowned out in male-dominated organisations. The experience of Norway in the 1980s and 1990s shows that companies can better their nationalisation efforts by proactively seeking out female talent and creating a better work climate for them.
  • Remove obstacles to success for female Emiratis. Establish clear female role models, set up development groups and actively focus on female talent development to avoid female talent stagnating or being lost in what can sometimes be a very male dominated and traditional work climate.
  • Focus on hiring the right expatriate managers and experts for knowledge-transfer. Recruiters need to assess not just their technical expertise, but recruit expatriates who have the broader behavioural competencies required to effectively operate as collective contributors and develop others.
  • Define, incentivise and include knowledge-transfer as part of the job for managers. Importantly, make sure they are able to set time aside for it. A structured approach focuses squarely on the longer-term success of the business through both national and expatriate talent.