Gulf companies need to develop local human resources
In the Gulf, many companies continue to rely heavily on expatriate workers. While this approach has enabled the Gulf to reap the benefits of a mobile workforce and to grow rapidly in recent years, it is not sustainable in a future marked by increased global competition for skilled labour. Put simply, the skilled expatriate workforce is increasingly being attracted by better terms and conditions offered elsewhere. They will neither stay to nurture the future socio-economic growth of the Gulf nor support productivity improvements in the local workforce as economies diversify away from oil.
This means labour and workforce policies to tackle this challenge are essential and companies in the Gulf have a key role to play in supporting governments’ focus in these areas by investing in their local human resources and in doing so, protecting their own future success.
A twofold approach to boosting productivity
The answer involves investment in productivity both at the collective and individual levels.
First, Gulf companies need to create the right context to make improving productivity attractive for their local employees. There are several ways of establishing this collective productivity imperative: through time-tested management practices such as Management by Objectives (MBO), a refreshed corporate strategy, or a novel incentive and compensation scheme. In practice this means, for example, Gulf companies setting corporate, team and individual performance targets and measures that make clear expectations, encourage ongoing communication between staff and management and provide a mechanism for reward or sanction. In doing so, the productivity imperative is driven through the organisation.
It is equally important to help employees see the value of improved work skills and productivity to them as individuals. Financial rewards alone do not work. Personal recognition and opportunities such as training, increased autonomy and responsibility, or the chance to be more entrepreneurial and creative are much more effective in inspiring employees. Emirates Airline, for example, offers significant financial and non-financial benefits to encourage aspiring Emirati pilots to pursue an education through its National Cadet Pilot Programme. These include the fact that the individual can secure a First Officer role at the airline upon successful completion of the programme, a federal retirement programme, and comprehensive medical insurance.
Companies then need to build capability in the local workforce, focusing on key skills such as communication, time management, problem solving, planning, team work and cultural awareness. This could involve pairing expatriate hyperspecialists with local workers to transfer skills through training, shadowing, mentoring and line management. This will develop a new generation of Arab knowledge workers who can take on the challenges that Gulf companies expect expatriates to address today.
Several Gulf companies are already leading the way in increasing the skill level, productivity and engagement of their workers while supporting the long-term growth of the region. For example, Saudi Basic Industries Corporation (Sabic) has signed agreements with the King Abdullah University of Science and Technology (Kaust) to “help both organisations fulfill our missions of harnessing science and technology for the benefit of the people of Saudi Arabia and beyond”. One of the agreements established the Sabic Post-Doctoral Fellowship Awards, which were first awarded in November 2011 in areas such as new and renewable energies, water research and nanotechnologies.
This should be a top strategic priority for every Gulf company: bold initiatives that develop the skills of the individual, firm and nation and that are encouraged by government incentives such as training grants, tax breaks and preferential rates. These kinds of enhanced skills will be vital to meeting the region’s future challenges such as hosting the Fifa World Cup 2022 in Qatar and 2020 World Expo in Dubai.
By making this sustained and significant investment in their local employees now, Gulf companies can improve productivity and ensure long-term business success.