Abu Dhabi: The UAE Government is focusing on education, training and subsidisation of private sector wages, among other measures, to bridge the gap between benefits of the private and public sectors, say top officials and HR experts.
The move was prompted by the fact that UAE’s public sector employment market is nearly saturated and that the emiratisation quota system in the private sector, which boasts more than two million jobs, failed to meet targets.
Shaikh Mansour Bin Zayed Al Nahyan, Deputy Prime Minister and Minister of Presidential Affairs, told the Government Summit in Dubai on Tuesday working hours and days of the private sector will be adjusted to match those of the public sector.
“The Government is seriously looking into ways to encourage Emiratis to take up jobs in the private sector,” Shaikh Mansour was quoted as saying by an Arabic daily on Sunday.
Criticing the present situation as “unfair”, Shaikh Mansour added a citizen employed in the private sector is putting in longer hours and enjoying less benefits both in terms of holidays and salaries.
“The Government has no objection to subsidising of citizens’ wages in the private sector and in-depth studies are being made to set up a new system for this purpose,” Shaikh Mansour said.
Shaikh Mansour estimated that a citizen employed in the public sector is drawing a salary that is three times more that his or her counterpart in the private sector, while the Labour Ministry put the difference in holidays between the two sectors at 57 days.
Dr. Ingo Forstenlechner, Associate Professor, College of Business and Economics at the UAE University, told Gulf News on Sunday what he thought was different and promising about the new approach “is that it aims to fix real issues”. “[Emiratisation] quotas don’t work, practice and research have shown this,” Dr. Forstenlechner said.
“Quotas as a single tool are not sustainable and they encourage working around them. The difference as it is between public and private sector as well as the differences between citizens and foreigners in the labour market are distorting the labour market in very unhealthy ways.”
Saqr Gobash Saeed Gobash, Minister of Labour, recently told the Federal National Council, of the 800,000 skilled and professional jobs in the private sector, 200,000 to 300,000 can be offered to citizens.
“However, Emiratis would prefer jobs in the public sector because the government offers bigger wages, more job security, shorter working hours and longers holidays,” the minister said.
Dr. Forstenlechner said a subsidy for citizens in the private sector was smart “because it is a better use of money than creating potentially unproductive jobs and it evens out the salary in the eyes of employers, so you have one major difference equalised”.
Nearly 20,000 of the 4 million people in private businesses are Emirati, according to the 2011 Labour Report, released recently by the National Bureau of Statistics
“Emiratisation can be addressed by bridging the divides in the labour market and creating a job market that does not — at least from the employer perspective — differentiate between nationals and foreigners, men and women, public and private sector. Wealth distribution to citizens is a great thing, but it could also be done without distorting the labour market, i.e. with the suggested private sector subsidy and not by employing more people than needed in potentially not productive public sector jobs,” said Dr. Forstenlechner.
He said he did not think the new policy would affect competitiveness of the country’s economy.
“These are government subsidies that won’t affect prices or competitiveness. For the private sector employer the cost of a government subsidised Emirati will be the same as for an unsubsidised foreigner as far as I understand,” he said.
Dr. Forstenlechner concluded it remained a better use of money to subsidise employment of Emiratis and have them work in productive jobs than to simply create public sector jobs out of nowhere as Oman and Saudi Arabia are doing.
