Growth amid global chaos
The Arab world needs to create 75 million jobs in the next 10 years to keep up with the fast-growing population set to enter its workforce, according to Booz and co. But are HR teams ready?
Despite the turbulent Arab Spring, looking ahead CEOs in the Middle East are optimistic, with 60% ‘very confident’ of their revenue growth prospects for 2012, according to Pwc’s latest global CEO survey. Underpinning growth strategies is the ability to obtain and develop the necessary talent to strengthen organisational capabilities. CEOs are clearly committed to this, with 43% expecting to grow headcount by more than 5% in 2012, opposed to 28% globally.
Yet meeting demands will be tough: nearly half (47%) believe hiring is becoming more difficult in their industry which could impact growth. So what does this mean for HR?
Leith Ramsay, director at Michael Page Middle East, believes the region is at a tipping point: “Because of flat growth elsewhere, emerging markets are tasked with redressing the balance. The biggest challenge for multinationals is managing a sustainable talent pipeline to deliver their aggressive growth targets. Employers have to keep topping up the talent pool at all levels. Succession planning is key.”
Michael Page began operating in the Middle East in 2006, and now has offices in Dubai, Abu Dhabi and Qatar.
Overseeing six divisions across the region (HR, sales, marketing, retail, IT & legal), Ramsay has been part of the Michael Page empire for 14 years. He began his career in Melbourne, and spent 5 years in London before moving to Dubai in 2008.
He talks passionately about working in the Middle East. “It’s awesome,” he enthuses. “It’s an emerging market; the GDP is in double digits. You’re not talking postcodes, it’s countries. We’re meeting such diverse candidates and clients.
“It takes longer to close business,” he admits, “but it’s far more rewarding.”
The value of relationships
Assignments are 40% retained and 60% contingent. Ramsay estimates that 65% of candidates are on the ground, while 35% are recruited offshore. The UK provides the most (65%) candidates; 15% from Europe, 10% come from Australia, 5% US, with Canada and New Zealand providing 2.5% respectively. Work covers two client groups: multinationals and local companies, which are usually privately owned.
Although Ramsay believes the London HR recruitment market is ‘saturated,’ he feels the Middle East is wide open: “We don’t come up against our competition often which tells me there’s lots of business for everyone.
“Everything’s a bit harder out here, so everyone’s open to working together. Clients appoint us faster and give us more confidential information. Relationships are stronger. It’s a partnership approach.”
High value, low volume HR
Ramsay found the Middle East ‘frustrating’ at first. Where in the UK a normal recruitment process would be 6 weeks, here it can be 2-3 months. This, he says, is down to risk factor – employers want 10/10 so it takes longer to source people, plus many line managers travel, so interview logistics are difficult.
Although HR yields fewer vacancies than sectors like IT, he says roles are more senior and seen as ‘higher value’ by organisations. He also finds clients in HR are more committed. Working on more retained assignments than other divisions, line managers in HR value a ‘proper’ recruitment process: they’ll stick to timelines, and give ‘better feedback.’
Direct sourcing & nationalisation
He’s adamant that direct sourcing is not impacting in the same way as the UK. This is partly due to nationalisation targets introduced by some governments to combat unemployment, which in some regions is at 40% among young workers.
He explains: “HR is a great avenue for nationalisation, so companies can typically source junior candidates direct. We deal with 5 years’ experience upwards.
“Some bigger companies have in-house teams. We don’t see much from them. Everyone else is focusing on core business – that’s where we get involved.”
Digging for talent regional trends
So in the face of such huge growth expectations, what HR skills are in demand?
Multinational companies have global teams so are ‘running in synch’. Regional headquarters (usually based in Dubai) require bi-lingual HR generalists with specialist experience.
“Everyone wants to work in Dubai – multinationals have a choice. They’ll always go for Arabic speakers, making it difficult for those who only speak English.”
There’s also a talent war. Candidates with the necessary skills are already working in Dubai, so are not job-hunting. “It’s hard to move those people, so employers have to offer salaries above market rate – 20-30% extra. An active candidate would be happy with 8-12%,” he adds.
Saudi Arabia (KSA) is different: “There’s more work and opportunity, but it’s not as nice to live there, so employers don’t have the choice. They’re more open to English speakers,” he says.
Technical HR candidates are also in demand in KSA. With a population of 25 million, the government is investing $500b in the economy over the next 10 years – a big element is getting everyone into work and organised, so in HR, L&D and performance management are crucial.
Transforming HR teams
For Ramsay, real transformation is occurring in local companies who want to operate in a western way. In the last 5 years, he says many have seen HR’s value in creating a performance led culture, but local expertise to execute this is lacking, so employers are likely to look offshore.
He believes the challenge is moving HR from being admin focused to understanding business objectives, with performance management, succession planning, and linking rewards/bonuses at the fore.
“Implementing new systems and processes is easy, but changing mindsets is tough. It’s a constant evolution,” he comments.
Nurture your career
The Middle East is a great place for high-potential HR professionals to progress. But Ramsay warns that it’s not somewhere to change career. Middle Eastern employers want product and market knowledge upfront: “They don’t have time to train people and won’t take risks; they want 10/10 – round pegs in round holes,” he states.
Ramsay believes the next few years are crucial – the local market expects HR platforms like performance management and succession planning will solve gaps in efficiency and drive growth. Like all strategic initiatives, without faultless execution there will be limited results.
With many organisations only at the start of their HR led vision, opportunities are abundant. Ramsay is clearly motivated by this: “We’re excited to play a role in the region’s ongoing transformation. There’s a long way to go, and HR will be a big part,” he concludes.
About Leith Ramsay
Leith joined Michael Page Australia in 1999, and relocated to the UK in 2004. He moved to the Middle East in 2008 and became director in 2010.