Despite phenomenal economic growth, Emirati participation levels in the private sector remain extremely low.
The UAE's growth over the past two decades has not come without its challenges. Chief among these is the lack of integration of the Emirati workforce into the private sector. Despite various Emiratisation initiatives, the bridge linking the Emirati workforce with private sector businesses remains narrow. On the one hand, Emiratis generally favour a career in the stable and comfortable public sector. On the other, the private sector overwhelmingly perceives higher economic value from foreign resources.
Emiratis currently occupy less than 2 per cent of the 2.2 million jobs in the private sector. The public sector, traditionally the largest employer of Emiratis, employs 495,000 Emiratis. According to the UAE National Bureau of Statistics Labour Force Survey in 2009, the unemployment rate among the Emiratis stands at 14 per cent. Unless immediate policy interventions are made, the severity of the issue will further increase with over 200,000 young Emiratis expected to join the workforce by 2019.
TCO Management Consulting examined the causes behind the low participation of Emiratis in the private sector across industries and highlighted a number of issues:
Most private sector companies misinterpret Emiratisation as a numbers game and treat it as a cost of doing business in the UAE. Emiratisation is rarely recognised as a credible talent strategy, with companies seldom offering long-term career progression schemes tailored for Emiratis.
Meeting quotas
Our interactions with some of the organisations in sectors bound by quotas, such as banks and insurance providers, reflect that mostly these entities hire Emiratis to meet quotas and avoid penalties. Some organisations, while acting in good faith, lack the necessary capabilities and expertise for sound career planning.
The private sector job market is smaller than it appears and social prestige, cultural tradition and religious beliefs create substantial barriers to certain types of jobs among Emiratis. TCO's analysis reflects that while the nominal size of the job market in the private sector is an estimated 2.2 million. Of this, 56 per cent of jobs lie in industries that are not favoured by Emiratis due to reasons mentioned above. These industries include hospitality, construction and manufacturing. As a result, the real number of opportunities open to Emiratis is closer to 1.2 million, as a theoretical maximum.
Generous compensation packages and better working hours in the public sector have contributed to creating an expectation gap between the Emiratis exploring opportunities in the private sector and potential employers.
Entry level pay
This is especially true at the entry level positions, with undergraduates expecting Dh17,000 to Dh20,000 monthly pay, compared to the Dh4,000 to Dh10,000 most private sector entities are prepared to offer, according to a UAE National Bureau of Statistics-Labour Force Survey.
In addition, the weekly average number of hours actually worked in the private sector is up to 30 per cent more than those required in the public sector.
There has been a consistent push by the country's leadership towards a knowledge-based economy. However according to Ministry of Higher Education and Research, only 24.6 per cent of Emirati students were enrolled in science and technology majors. These disciplines are vital for leveraging the opportunities available in a knowledge-based economy.
This mismatch between the type of jobs that will be created and the type of skills Emirati students are pursuing today could increase the Emirati unemployment levels further.
Conclusion
It's obvious that a multitude of policy interventions and initiatives need to be undertaken to increase the participation of Emiratis in the private sector.
First, it is important for policymakers to define and communicate the fundamentals of Emiratisation to stakeholders at all levels. This should serve to provide a uniform interpretation of what Emiratisation really means and what it is really supposed to achieve.
Second, government incentives and other interventions should nudge the private sector to revamp their talent strategies to include Emiratis and focus on the development of Emiratis, rather than merely the hiring of Emiratis. A recent initiative by the Sheikh Khalifa Fund offers to fund the costs related to the initial development and induction of Emirati employees in a private sector organization. The National Human Resource Development and Employment Authority (Tanmia) has also been successfully contributing to Emiratization through their training initiatives and facilitating job placements. These are steps in the right direction and should act as an incentive for both large businesses and SMEs to hire and nurture Emiratis.
Third, the real job market size can be significantly expanded by creating awareness about specific jobs. This will make them socially acceptable for Emiratis without overstepping cultural and religious sensitivities.
Fourth, career orientation programmes need be adopted at schools to make students aware of the opportunities presented by a progressively knowledge-based economy.
Vineet Chhatwal is the COO/Practice Lead and Ahmad Ghannoum is a principal consultant at TCO Management Consulting. Opinion expressed here are the writers' own and do not necessarily reflect that of Gulf News.
