Nationalization Strategies

The Human FactorPublic And Private Corporations

Zafar Aziz Osmani

Chief Executive Officer

Excelerate Private Limited

Objectives of Presentation

Evaluate and review ratio of foreign employees in GCC

Countries

Identify key factors and challenges

Suggest options and alternates for enhancing locals employment ratio

Important Considerations

• This is not a research analysis presentation

• Data used in this presentation has been acquired from

different sources where variations have been noticed

• Purpose of using the statistical data is to get a big

picture perspective which can throw some insights from

HR point of view

Source - Forstenlechner, 2013

GCC Demographics

Country 2012 Population Workforce

Nationals Non-Nationals Nationals Non-Nationals

Bahrain 510,000 540,000 36% 64%

Kuwait 1 mill 2.4 mill 17% 83%

Oman 2.4 mill 1 mill 29% 71%

Qatar 220,000 1.1 mill 5% 95%

Saudi Arabia 21 mill 7.8 mill 51% 49%

UAE 950,000 4.3 mill 6% 94%

GCC 26 mill 17.1 mill 24% 76%

GCC Workforce Ratio

Source - Forstenlechner, 2013

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

UAE

Qatar

Kuwait

Oman

Bahrain

Saudi Arabia

Nationals Non-Nationals

GCC

Population / Workforce Ratio

60%

40%

Nationals Non-Nationals

Source - Forstenlechner, 2013

38%

62%

Nationals Non-Nationals

61%

39%

Nationals Foreign

European Union GCC Ratios

Source – Eurostat migr_pop1ctz

38%

62%

Nationals Non-NationalsE U GCC

Reasons for Employment

Imbalance in GCC

• Phenomenal economic growth in a very short time

• With high levels of real GDP growth, developments took

place in infrastructure, education, health and other social

sectors which necessitated immense workforce

• Local working populations was not ready to cope up with

the challenge due to:

– Inadequate numbers

– Lack of specialized skills

Real GDP Growth 1970 – 2013 US $ Billion

Source - IFS DATA

Y 1

97

0

Y 1

97

3

Y 1

97

6

Y 1

97

9

Y 1

98

2

Y 1

98

5

Y 1

98

8

Y 1

99

1

Y 1

99

4

Y 1

99

7

Y 2

00

0

Y 2

00

3

Y 2

00

6

Y 2

00

9

Y 2

01

2

KSA

Y 1

97

5

Y 1

97

8

Y 1

98

1

Y 1

98

4

Y 1

98

7

Y 1

99

0

Y 1

99

3

Y 1

99

6

Y 1

99

9

Y 2

00

2

Y 2

00

5

Y 2

00

8

Y 2

01

1

UAE

Y19

80

Y19

83

Y19

86

Y19

89

Y19

92

Y19

95

Y19

98

Y19

96

Y19

99

Y20

02

Y20

00

Y20

03

Y20

06

Y20

09

Y20

12

QATAR

Y1

97

5

Y19

77

Y19

80

Y19

83

Y19

85

Y19

88

Y19

91

Y19

94

Y19

97

Y20

00

Y20

03

Y20

06

Y20

06

Y20

09

Y20

12

OMAN

Y19

75

Y19

79

Y19

83

Y19

86

Y19

90

Y19

94

Y19

98

Y20

02

Y20

05

Y20

09

Y20

02

Y20

06

Y20

10

BAHRAIN

Y19

70

Y19

73

Y19

76

Y19

79

Y19

82

Y19

85

Y19

88

Y19

91

Y19

94

Y19

97

Y20

00

Y20

03

Y20

06

Y20

09

KUWAIT

GCC GDP GrowthIn Billions of US $

-

200

400

600

800

1,000

1,200

1,400

Y 1

97

0

Y 1

97

1

Y 1

97

2

Y 1

97

3

Y 1

97

4

Y 1

97

5

Y 1

97

6

Y 1

97

7

Y 1

97

8

Y 1

97

9

Y 1

98

0

Y 1

98

1

Y 1

98

2

Y 1

98

3

Y 1

98

4

Y 1

98

5

Y 1

98

6

Y 1

98

7

Y 1

98

8

Y 1

98

9

Y 1

99

0

Y 1

99

1

Y 1

99

2

Y 1

99

3

Y 1

99

4

Y 1

99

5

Y 1

99

6

Y 1

99

7

Y 1

99

8

Y 1

99

9

Y 2

00

0

Y 2

00

1

Y 2

00

2

Y 2

00

3

Y 2

00

4

Y 2

00

5

Y 2

00

6

Y 2

00

7

Y 2

00

8

Y 2

00

9

Y 2

01

0

Y 2

01

1

Y 2

01

2

Y 2

01

3

SAUDIA UAE QATAR OMAN KUWAIT BAHRAIN

Inferences Drawn

• The unprecedented growth in a very short span of time in recorded

history

• There was no way GCC countries could have achieved the required

development without engaging large numbers of foreign workforce

/skills

• The ratio cannot be reversed in near to mid term of time due to the

population growth and required pace of skills development

constraints

• Only structured and sustained planning will improve the ratio over a

period of time

Public And Private Sector

Realities & Challenges

Go

vern

men

t se

cto

r jo

bs

seen

fav

ora

ble

Compared to private

sector

Salaries are generally higher

Non monetary benefits are better

Hours of work tend to be shorter

Private Sector Employers Perceptions

Perc

epti

on

s ab

ou

t N

atio

nal

s

Less productive than expats

Legislated higher salaries than expats

Reluctant to work in private sector

Need greater flexibility in work hours

GCC HR Priorities

• Develop and grow the nationals workforce– In numbers and

– In skills

• Widening employees database by enhancing the male : female ratio in workforce

• Focus on behavior competencies relevant to employee engagement and motivation

Continued Dependence on

Foreign Labour Po

licie

s so

far

no

t fu

lly

succ

essf

ul i

n a

chie

vin

g d

esir

ed g

oal

s

In managing unemployment

Creating jobs for the increasing numbers of nationals after education

Decreasing dependence on foreign labor

Classical Initiatives

Subsidize salaries to

private firms

Enforce Nationalization

strategies through

regulatory controls

Enhance private sector benefits for compliance

with Nationalization

Allow for Nationals to be dismissed for

non-performance

Recognizing HR program for

Nationals

The Human Factor

Approach

Suggesting a shift in focus

towards Nationalization

Performance Perception –

Key to Success

People

Productivity

Performance

Performance Growth Model

Clarity in Performance Benchmark

Linkage to rewards and

growth

Developing technical and

behavior Competencies

Engagement & Motivation

Strategy for

The Employers

Define HR requirements based on business strategy

Develop organizations core

competencies matrix

Assess employees readiness in core

competencies

Develop and implement strategy

for bridging gaps

Ensure Engagement and motivation

stays critical to HR strategy

Ongoing Agenda

Review Competencies /

Skills Matrix

Review Career Paths

Implement & Monitor

Example:

IT Career Paths

Job Level

1

Job Level

2

Job Level

5

Job Level

3

Job Level

4

Job Level

4

Job Level

3

1

Core Path 2 4

6

73

5

Programmer path

Analyst path

Special Skills path

Special Skills path

Management path

Management path

Conclusion

For successful nationalization there is a need for shift:

• From Conventional strategy

• to a “Human Factor Based Strategy”

Strategists need to:

• Align their approach with human resource modern approach

• Matching people competencies with organization needs

• Engaging nationals and adopt a learn & grow approach

WEBSITE:

http://www.excelerateca.com

HEAD OFFICE:

Office # 6, 3rd Floor, Plot # 36-C,

5th Bukhari Commercial Lane, Phase 6 DHA,

Karachi, Pakistan.

PHONE:

+92 -21-35245722

EMAIL:

info@excelerateca.com

Zafar Aziz Osmani

Chief Executive Officer

Excelerate Private Limited

zafar.osmani@excelerateca.com

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