Engaging the labour force

28 November 2011

Engaging and training young nationals for the workplace is a key priority for regional governments

The 2011 Arab uprisings have thrown the issues of youth unemployment and job creation to the forefront of policymakers’ minds. The civil unrest across the Arab world has been overwhelmingly driven by young men angry at the lack of job opportunities and social mobility.

It will be essential that human capital is developed … to match robust investment in the GCC’s physical infrastructure

The region’s population is rising rapidly. The Washington-headquartered World Bank predicts that 100 million jobs need to be created in the region over the next 20 years just to accommodate those seeking to enter the workforce for the first time.

But in recent years, job creation has not kept pace with demand. Prior to the global economic crisis, about 3-4 million jobs were being created each year in the region, compared with the 5-7 million required. The tumultuous events of 2011 will have slowed this even further.

Job creation in the Gulf

In the GCC, the challenge is complex. The economic boom over the past decade has created hundreds of thousands of job opportunities but the local population, in particular the young, either lack the necessary skills or are not interested in working in the private sector. As a result, youth unemployment is high.

In Saudi Arabia, it is estimated nearly half of nationals aged 20-24 are unemployed, while 33 per cent of those aged 25-29 in Bahrain are without work.

Employee engagement by region
North America61
Latin America74
Asia Pacific59
Source: Aon Hewitt

In November, US human resources consultancy Aon Hewitt published a study into the Middle East workplace, providing insights into what drives and motivates talent in the region.

The report took about two years to compile and represents the attitudes of 4,600 employees. The survey covered the GCC, except Kuwait, and included male and female nationals and expatriates.

The survey found that one out of two people in the region are not motivated to contribute their best efforts at work. Overall, women are less engaged than men and across all countries, nationals reported significantly lower engagement levels than their expatriate counterparts. The level of engagement among GCC nationals working in their own countries is 51 per cent. Among GCC nationals, Emiratis in the UAE were the least engaged at 46 per cent. Bahrainis followed with 49 per cent.

GCC employee engagement level
Not engaged2022
Nearly engaged2822
Source: Aon Hewitt

While those under the age of 25 years were career focused, the 25-34 age bracket is having what the report describes as a “premature mid-career crisis”. This age bracket is the least engaged at 47 per cent.

By 2015, young people will represent 32 per cent of the total Arab population. A young, working population without adequate training and education could be a recipe for social unrest. Currently, the Middle East suffers from the highest level of youth employment in the world at 25 per cent. The economic loss of youth unemployment exceeds $40-$50bn each year across the Arab world.

The report identified increased participation of women in the workplace as a major opportunity to improve productivity levels in the GCC. Although the overall participation of women in paid employment in the region is among the lowest in the world, it is increasing at a rapid rate.

Female employment in the GCC

In Saudi Arabia, less than five per cent of women of working age participated in the kingdom’s labour force in 2000. A decade later, this has risen to just under 15 per cent.

However, the report shows women are less engaged than male counterparts in the region, with engagement levels of 50 per cent and 57 per cent respectively. GCC women, and Emirati women in particular, are the least engaged. Interestingly, 28 per cent more national women said they were comfortable working in mixed gender teams than national men.

Attracting, motivating and retaining more women in the workplace will be a growing priority for regional governments and employers. Some 30 per cent of unemployed women in Bahrain are university graduates.

In some aspects, the report indicates that women are more suited to the challenges of the GCC labour market than their male counterparts, which goes against traditional stereotypes and beliefs. Women, including nationals report no major differences between who they are at home and who they are at work, compared with their male colleagues.

The survey highlighted the divide between the public and private sectors. The public sector has traditionally been seen as the employer of choice for GCC nationals. This is largely due to the attractive benefits such as high pay, shorter working hours and perceived social status.

The report shows engagement in the private sector stands at 62 per cent, compared with public sector and semi-government engagement, which stands at 48 per cent and 55 per cent respectively. Employees in the public sector have a higher sense of “self-efficacy and alignment between personal and work values”, says the report. Private sector workers, meanwhile, have a greater sense of pride and fairness, but lower levels of optimism attributable to job security.

Job motivation

Perhaps surprisingly, pay was cited as the fifth most important driver for expatriates in what matters most in the workplace. For nationals, this was third.

Expatriates said the issues that mattered most in the workplace were career growth (39 per cent); learning and development (39 per cent); clear and fair HR policies (39 per cent); and equal treatment (38 per cent).

For nationals, the issues that mattered most were career growth (48 per cent); learning and development (46 per cent); and clear and fair HR policies (44 per cent). The biggest difference between the two groups was how important position and title were. About 31 per cent of nationals ranked this as important compared with just 7 per cent of expatriates.

The semi-government sector has some distinct results in terms of drivers of engagement. Workers in the semi-government sector are the least career-orientated and have lower levels of confidence in senior management.

On the other hand, they also have the highest levels of pride in customers, a higher tolerance to diversity and the most satisfaction with their work environment.

Organisations that fall under the semi-government sector will face unique challenges as they redefine themselves to closely reflect a more private sector approach to attracting and retaining employees, while competing with the traditional public sector for talent.

Compared with the rest of the Arab world, the GCC is in an enviable position. Not only does it have a young, well-educated population entering the workforce, but it also has the financial resources available to invest in the development of human capital.

The report recommends the low levels of employee engagement in the region could be improved by generating greater confidence in senior leadership and by instilling in workers a greater sense of purpose.

It says it is essential that human capital is developed in equal measure to match the already robust investment in the GCC’s physical and financial infrastructure.

Greater engagement

The engagement and advancement of national talent is now a major priority for all governments in the Arab world. In the GCC, initiatives are under way to force businesses to employ and train more local staff, but it will be several years before they will pay off and success is by no means assured.

“If we can effectively harness this potential it will revolutionise the talent landscape in the first half of the 21st century in no less a way than the development of fossil fuel reserves,” the report says.

The region has experienced unprecedented growth in recent years, but this has been achieved mostly through spending billions of dollars worth of hydrocarbons revenues on importing talent and technologies.

The challenge now is to get nationals to take forward the GCC by themselves.

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