It’s An Exciting Time to Be In HR In the Middle East

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Mar 13, 2018

The Middle East is currently undergoing a massive economic transformation, transitioning from resource-dependent into a knowledge-based economy.

At its core, is the United Arab Emirates.

The nation is quickly becoming a world leading business hub with an epicentre of trade flows — putting it in a prime position for growth, opportunity and investment. As part of the UAE Vision 2021, the nation is heavily investing in its workforce in order to meet its targeted 40% increase in knowledge workers by 2021. Moreover, the National Agenda aims to make the UAE the best in the world in entrepreneurship to drive economic development through small and medium enterprises in the private sector.

A magnet for expat talent

As we see the sands begin to shift in terms of economics, business and the labor market- there has never been a more interesting time to be an HR professional in the Middle East.

There is a unique workforce quality in the region, which is steadily becoming more and more competitive in our dynamic digital world – yet it largely remains untapped.

The Middle East has a young population; 40% are under the age of 25. In fact, the ratio of youth in the Gulf Cooperation Council (GCC) is one of the highest globally. Its workforce is tech-savvy and ambitious.

McKinsey found that citizens themselves are leading the Middle East’s digitization charge. The UAE is among the top countries in the world, with more than 100% smartphone penetration and more than 70% social media adoption — even higher than United States.

Moreover, a study found that millennials in the Middle East are hard-working and entrepreneurial, with 52% stating that they never expect to retire; however, the region has one of the highest youth unemployment rates in the world, hovering at 21%. While the UAE has lower unemployment rates in comparison to the region, attracting and retaining local talent remains a major opportunity and, at the same time, a major challenge.

Push to increase local participation

Nationalization is a top priority for the government to increase local participation in the labour force.

While national talent is growing rapidly in the UAE, there remains skill gaps with regards to the requirements of the private sector. Nationals occupy 80% of government positions illustrating a one-sided attraction to the public sector. Therefore, the UAE’s Nationalisation Agenda has targeted  industries such as energy, banking and legal, which have the lowest national representation, offering the private sector incentives, support and national development mandates to equalise the playing field.

This poses an interesting challenge to HR professionals on how to balance imported vs locally grown talent as well as how to attract nationals to specific industries.

High earning prospects make places like the UAE, Saudi Arabia and Bahrain lucrative career destinations for expat professionals.

Top-notch living standards and the income tax-free environment has put the UAE into the top 10 of the World Economic Forum’s Business Environment. Moreover, of special relevance to HR professionals, the 2017 INSEAD Global Talent Competitiveness Index ranked UAE number 1 in MENA and 19 amongst 118 countries in the ability to grow, attract and retain talent.

Finally, the Dubai Plan 2021 has a laser focus on the pursuit and promotion of education and personal development of its residents.

The above are elements that enhance the degree of quality of life and wellbeing as drivers of a more positive and productive environment, which attracts and retains the workforce necessary for businesses to flourish.

Expats don’t stay

However, the “expat coin” has two-sides. Needless to say, with a high expat workforce, job hopping is the name of the game. We have fewer years with each employee compared to other markets.

Typically expatriate employees spend 2-3 years on foreign assignment and expect to return to their country to pursue a domestic career. So, as an HR professional we need to manage a high and consistent turnover rate.

A degree of mobility needs to be established. Business partners and HR professionals are pushed to shift their traditional mindsets on retention. HR needs to be prepared for people to leave the company; talent management has to have clear planning for future moves and strong succession maps for high performers and crucial positions. More importantly, HR professionals need to celebrate “exits” as alumni.

Imported vs locally grown

Both imported vs locally grown talent have their advantages and challenges, but in the end, is it really a question of either/or? I believe it is more about HR professionals having the intelligence and foresight to meet future needs in a market undergoing massive transformation, which requires a strategic outlook on talent management.

For starters, HR professionals need to be more focused on tapping into youth and national talent pools and developing the region’s future business leaders. This is vital for sustainable growth in the UAE.

Second, they need to get more creative and bold, and diversify their attention to include entrepreneurs, enterprises and startups, which are traditionally overlooked or undersold.

Yes, there needs to be continue integration into the private sector, but more importantly there needs to be continued investment into an ecosystem to enhance knowledge transfer and improve workforce quality.

Until this ecosystem is fully operational, HR professionals need to continue to grease the collaborative mechanism among governments, business and academia.

Finally, it is important to strike the balance between attracting and retaining top talent by investing both at home and abroad, but it has to be for the right person, for the right role and at the right cost.