Migrating from Emiratisation to Skill-Based Emiratisation

March 1^st, 2006

Since the early 1990s the UAE has adopted a strategy commonly known as Emiratisation. The strategy aims to use the country's human resources optimally in the economic process and to transfer skills and knowledge from expatriates to UAE Nationals. It both applies to government agencies and private sector companies, where expatriates still make up the vast majority of the work force.

The match between job supply, that is, the skills of the available work force, and job demand created by quotas is a challenging balancing act. Now is the time for companies to reconsider their Human Resource strategies and to take up skill-based Emiratisation.

"The main challenge companies are facing today," explains Marc Hormann, Project Manager with MESA, "is how to efficiently integrate Emiratisation targets set by the government into their overall human resources strategy. Skill-based Emiratisation is all about matching the demand for national employees with existing supply in the most efficient way." Complications arise from the relatively young and inexperienced UAE workforce and also from the common misconception that expatriates in general have the better work attitude, that is to say, are more willing to work long hours and at a substantially lower wage. 

In general, many UAE Nationals prefer to seek employment in the public sector due to better conditions, namely more attractive compensation packages, job security and often shorter working hours. The main issues for private firms therefore remains 'How to attract the high potential UAE Nationals' and subsequently 'How to ensure knowledge transfer from expatriates to Nationals.'

In fact, most of the UAE's leading companies such as Emaar Properties, First Gulf Bank or Etisalat, to name a few, are engaged in various Emiratisation activities - recruitment fairs, training programmes and corporate universities. "Companies recognise the need to adapt their human resources strategy," explains Joern C. Kuntze, Partner at Middle East Strategy Advisors, "however, many engage in costly one-time initiatives with questionable outcome. What companies really need is a comprehensive step-by-step approach on how to roll out their Emiratisation strategy."

To deal with Emiratisation in the most efficient way, companies need to identify existing skills and knowledge gaps and subsequently set the right incentives for employees nearing the end of their careers, to transfer knowledge effectively to the next generation. They furthermore need to implement internal structures that support organisational changes and constantly monitor their success in order to migrate from Emiratisation to skill-based Emiratisation.

In order to be a productive resource for an employer, candidates need a set of required skills that can result from their educational background as well as prior work experience. Companies aiming at skill-based Emiratisation essentially have to assure that employees possess both. On the one hand we can assume that the level of general education is sufficient for the jobs in question. Experience, on the other hand, is something that one cannot expect from a nation that was formed some 30 years ago and whose population is extremely young with 45% of the UAE Nationals under the age of 15 years. Consequently, one of the main challenges companies are facing is to transfer accumulated knowledge from Expatriates to Nationals.

According to MESA, companies are in urgent need of actively developing comprehensive Emiratisation strategies:

First, they need to identify functions where the firm intends to strategically increase the number of UAE Nationals as well as the key knowledge holders that are essential in the subsequent knowledge transfer process.

Second, companies need to set the right incentives to encourage knowledge transfer. The core of a skill-based Emiratisation strategy is to assure that expatriates transfer crucial parts of their knowledge to UAE Nationals. Naturally, there is little incentive to do that - expatriates might fear putting their own jobs at risk when sharing proprietary knowledge with young UAE Nationals that are designated to eventually take over their jobs. Therefore, clear-cut incentives must be set to align the overall Emiratisation strategy with individuals' incentives. Commitment to develop Nationals has to become part of a high-calibre expatriate's job description. This is an essential part of the process since it focuses on the implementation.

Third, the newly gained knowledge needs to be applied in practice. This includes putting into place a transparent approach so that expatriates as well as Nationals have a very clear understanding of their respective career path, which includes constant knowledge sharing.

Fourth, the progress and success of knowledge transfer needs to be monitored on a constant basis. This can be done by integrating knowledge transfer targets into the Key Performance Indicators or other types of Scorecards.

"The success of Emiratisation strategies depends on a structured and holistic approach. Single initiatives are not sufficient." Marc Hormann points out and he adds "Since the overall process takes a while companies should not expect to reap the benefits immediately. However, skill-based Emiratisation will prove to be a huge competitive advantage in the search for talent." Now is the time for companies to reconsider their human resources strategies and to take up skill-based Emiratisation. In order to be ready for the future, firms need to overcome inertia and act immediately since there is no short-term solution. "In fact," Joern C. Kuntze comments, "last-minute approaches will inevitably lead to failure; only profound structural changes of the Human Resources strategy will deliver the desired results."

-Ends-

About the authors
Mr. Joern-Carlos Kuntze, Partner with MESA, holds an International Finance degree and an MBA in International Management from Regents Business School, London. At CII Group McKinsey & Co. spin off) he participated in strategy advisory services and change management across a range of industries. At Venturepark AG (Venture Management firm) he worked in the field of investment advisory. Mr. Kuntze specialized in change management and performance improvement projects with an emphasis on oil & gas and family businesses.

Mr. Marc Hormann, Project Manager with MESA, holds an MBA from WHU University in Koblenz, Germany and an MA in Marketing and Entrepreneurship from University in Nice, France. During his experience in international consultancies such as Mercer Management Consulting and OC&C (a McKinsey spin-off), he is specialized in corporate strategies in the field of sales and marketing. He also performed projects in the oil & gas industry covering topics such as change management and operational improvements.

About Middle East Strategy Advisors (MESA)
MESA is a management consulting firm which concentrates its efforts in the Middle East, combining Consulting, Change Management and Investment Advisory services to provide measurable results for its clients. MESA was founded in 2002 after recognizing that rapid progress in the Middle East had generated a need for advisors with international expertise who were based locally and could remain in constant touch with local market developments.

We now operate across the GCC and Middle East region with over 25 permanently based professionals and offices in Abu Dhabi, Dubai and Muscat.

Our capabilities are concentrated into three critical competencies - strategy consulting, change management and investment advisory. These core competencies reflect the priorities of world-class senior management in terms of setting strategy, managing change and delivering growth. We have specialized teams in a number of sectors: oil & gas, travel & tourism, real estate and construction, government & privatization, industrial and manufacturing, healthcare, financial services & banking, IT and private equity.

In association with our global partner, MESA is a combination of the unique experiences of each of its team members. Together, they form the extensive expertise and knowledge base of the company.

As an alliance member of OC&C Strategy Consultants, we can also bring international industry-specific resources to the Middle East, enabling us to create even greater added value for our clients. OC&C is a leading international consulting firm that focuses on delivering sustainable growth strategies for many of the world's largest and most successful companies.

More information about MESA is available on the webpage www.mesadvisors.com.

Contact:
Joern-Carlos Kuntze
Partner
Middle East Strategy Advisors
Phone: +971 2 6316111
joern.kuntze@mesadvisors.com
www.mesadvisors.com

By Joern C. Kuntze (Partner) and Marc Hormann (Project Manager), Middle East Strategy Advisors (MESA)

© Press Release 2006