Dubai:  Private sector companies in the UAE and the rest of the Gulf Cooperation Council (GCC) region are struggling to hire and retain local talent due to lack of skills and high salary expectations of young nationals.

In a survey conducted among GCC employers and students, EY found that there is a “misalignment” between what companies expect and what local job applicants are capable to deliver.

The EY study, which was intended to identify the major challenges that employers face in hiring and retaining nationals, found that companies struggle to retain nationals because locals from the region have high salary expectations.

What’s compounding the problem is that young people often lack the necessary work experience, cited by 53 per cent of the employers, as well as communication skills (36 per cent) and required skills and qualifications (22 per cent).

“Employers struggle to find the skills they need, especially at entry level,” said  Gerard Gallagher, Middle East and North Africa (Mena) advisory services, EY.

Companies have been encouraged to diversify their workforce by filling positions with local talent. In the UAE and Qatar, nationals still constitute a small portion of the workforce in the private sector, around 1 per cent.  The figure, however, is higher In Saudi Arabia, where nationals make up 18 per cent of the workers in private companies.

According to Will Cooper, partner and Mena government social infrastructure leader at EY, there is an urgent need to get more locals working in the private sector because the old model of hiring nationals in high-paying government positions is no longer sustainable.

“Budgets are strained and government businesses struggle to become more efficient. It has an impact on the private sector, too, which relies heavily on expatriates for its workforce,” said Will Cooper, partner and Mena government social infrastructure leader.

In the survey, about seven out of ten employers (three quarters) feel that schools in the region don’t really know what skills private companies require.

 “Despite the efforts in the Gulf region to improve the education systems, there remains a misalignment of the needs of employers and the expectations of young people that makes it hard to improve outcomes,” Gallagher said.

On the other hand, Gallagher said, young people who are still studying are not sure about how they should enter the job market and build a long-term career. “And teachers are unsure about labour market demands and why they are important to incorporate into the curricula they teach.”

However, when asked where they would like to work, GCC students show an overwhelming preference for public sector jobs.

Almost 75 per cent of GCC students also put salary packages at the top of the list of what they consider very important in a job, while 59 per cent cited job security as very important.