Amid concerns that the UAE's public sector is close to employee saturation point and that the Emiratisation quota system in the private sector has done little to minimise what has now in effect become a two-tier market employment structure (a public sector comprising predominately stet UAE nationals; and a private sector, of foreign labour), Mandeep Kalsi reports on the Minister of Labour's recent and highly publicized initiative to re-balance this increasing divide, with the private sector being placed firmly in the spotlight for change.
According to the chaos theory, the butterfly effect refers to seemingly insignificant events leading to significant, long-term changes. Its name is derived from the theoretical illustration of a hurricane being formed by the flutter of a butterfly's wings on the other side of the world. The metaphor can be put sharply into focus by the statement in February by the current UAE Minister of Labour, H.E. Saqr Ghobash Saeed Ghobash, about the current over-reliance on the public sector to absorb new Emirati graduates and the consequent unsustainability of such policy in the longer-term, particularly having regard to the year on year increase in the number of UAE national graduates entering the labour market and the resulting near saturation of the public sector.
A study prepared by the Federal Authority For Government Human Resources (FAHR) concluded that only up to 15,000 jobs can be created in the public sector for UAE nationals this year with the Absher initiative providing for approximately 5,000 additional openings a year. H.E. Saqr Ghobash confirmed that only 22,000 Emiratis work in the private sector (65% of which are concentrated in the banking sector) despite recent figures indicating that the sector itself provides for more than 4 million jobs. The challenge is to bring an increasingly higher number of UAE nationals into the private sector; particularly as the public sector is unlikely to be able to ingest the growing number of new UAE national graduates entering the employment market.
Currently on the UAE Government's agenda:
- amending the UAE Labour Law to provide for, amongst other things, increased entitlements such as enhanced private sector holidays;
- government wage subsidies or public-sector reform or a combination of the two;
- providing a minimum salary entitlement for UAE nationals
The closing of the perceived gap between the public and private sector (in terms of salary and benefits) and, in particular, the providing of better employment rights and entitlements for UAE nationals has been a key feature of the UAE Government's growth plan. This current year has been declared the "Year of Emiratisation" and it will be interesting to see the development of this initiative, especially in the context of the existing UAE labour law framework. Discussion on the topic of Emiratisation has, however, maintained a constant and consistent thread: the need for a change in mindset. Such change needs to be rooted at an early stage to have a strong and lasting impact on future generations of talent, be that by way of more vocational-based and focused academic training or student placements in the private sector. The vision is to create a culturally balanced workforce in the private sector and to equip the Emirati youth of this country with the practical skills that can be readily harnessed in the "results driven" environment of the private sector. The Emiratisation initiative is certainly a step in the right direction but to derive maximum benefit for both UAE nationals and private sector employers, it is hoped that the next phase of the UAE Governments' "emiratisation" programme will bring about a new receptivity on the part of private sector employers to the potential contribution that young UAE nationals can make in a business environment and the creation of the necessary legal framework required to secure the position of Emiratis venturing into the challenging world of private enterprise.
Author: Mandeep Kalsi
m.kalsi@hadefpartners.com
© Hadef & Partners 2013
