Category Archives: Feature Articles

The Great Crew Change

-by Asel Shilikbayeva, Principal Consultant – InterSearch Middle East ( Abu Dhabi Office)

The recent downturn in the oil and gas sector followed by the US shale boom and technological advances in the area of exploration & production (E&P) has led to unprecedented skills and challenges faced by companies today. Since 2014, companies understandably focused on cost reduction, including downsizing their workforces shedding over 440,000 jobs globally (1).

The industry, however, is on the edge of a demographic fall with an ageing workforce approaching or surpassing its retirement age, shortage of mid-career professionals and not enough fresh talent finding the sector attractive to join due to its poor image. These challenges are particularly significant in the context of rapidly growing demand for energy as well as global calls for greater adherence to responsible social and environmental practices. According to the International Energy Agency’s 2016 forecast, the demand for energy will increase 1.2 percent per year until 2035, with hydrocarbons continuing to supply at least half of the world’s energy needs (2). This is being compounded by the rapid growth in workforce demand fueled by deep water activity in West Africa, Eastern Mediterranean and Brazil, frontier developments in Mozambique and Tanzania and the shale boom in North America.

With oil and gas experts exiting the sector this may lead to an increase in recordable safety incidents or even unplanned equipment downtime if it cannot be promptly replaced. There is also a risk in valuable institutional knowledge being lost unless it is transferred to others. The shortage in skilled talent has major implications for the industry’s pipeline of top leadership, which tends to move up from the ranks of experienced managers in skilled technical positions. With this skills change dubbed as the Great Crew Change, companies face an even more significant challenge: crew change at the top.

Many leading energy companies have begun making their own plans to address increased retirements and help prevent critical skills gaps that could derail their growth ambitions. These plans have incorporated a number of forward-looking initiatives designed for a smooth transition including succession planning, accelerated development and mentoring programs, enhanced recruiting strategies and a variety of knowledge transfer programs.

There are three major emerging forces that are changing the future talent landscape in ways that have not been experienced by the sector before:

First, it is the debate over the long term future of the petroleum sector triggered by the rapid growth in the renewables and electric vehicle technologies. Leading forums and consultancies such as the World Energy Council and McKinsey & Company predict that oil demand would peak at around 100 million barrels a day by 2030 – a striking shift from bullish projections of 118 million barrels a day and higher in the years preceding the downturn (3). Hydrocarbons will retain its majority share of the energy supply for the foreseeable future, but the balance is changing and the greener future does seem assured. Experts believe that tightening climate regulations and competitive economics of renewable energy will further accelerate this trend, casting doubts over the revival of large scale capital spending in the E&P sector.

The second force is the digital revolution that has brought an explosion of technologies such as big data, artificial intelligence, robots, 3D printing, Cloud, and more recently block chain. These technologies are predicted to shape the future jobs creating requirements of the new set of skills, not all of which are possibly known today. While E&P firms are still warming up to them, the adoption is inevitable and will gradually pick up as mentioned by various research firms.

 

Third is emergence of the millennials generation in the corporate world. It is expected that the millennials will form a majority of the workforce by as early as 2020 (4). Much has been written about the millennials: their digital proficiencies, career preferences and search for the purposeful jobs. Their appearance at the management level will adjust hierarchical and conservative organizational culture, siloed work environment and highly specialized career paths typical to the petroleum sector.  In addition, the millennials are increasingly mobile and their proneness to technology advancements will change the type of work they perform. These factors are exacerbating the war for talent by extending competition beyond local, and even national, labor markets.

The forth force is the focus vastly on agile and improved efficiency at around US$50 “lower for longer” oil price environment.  This is essential for the industry at the moment and translates in avoidance of any form of complexity, which may slow down exploration programme or commercialization of new discoveries. In order to discontinue fueling a shortage of skilled workers into the future, companies need to pursue talent processes that better manage the attraction and retention of engineering and technical talent. At the same time, development and training programs should also focus on fostering a higher level of cost consciousness among existing workforces, who will likely be asked to operate in more fiscally constrained manners going forward.

In both the short and long-term, oil and gas companies face a number of workforce issues ranging from low commodity prices to perceptions of the industry and generational preferences, regulatory changes and technology developments. Continued success will require attracting, managing and retaining a workforce which not only sustains the business, but also innovates and executes in a powerful new way.

 

NOTES:

  1. David Wethe, “Oil Drillers Are Expanding Again After Losing Half-Million Jobs,” Bloomberg, January 9, 2017.
  2. International Energy Agency (IEA), “World Energy Outlook 2016”.
  3. Bram Smeets, Angelos Platanias, “The Outlook For Crude: A Thought Experiment”, Energy Insights by McKinsey, June 2016.
  4. David Andrews, Aleek Datta, Charles Newnam, Jean-Marie Rousset, “The Talent Well Has Run Dry”, Accenture, 2017.

Back to the future of oil

With further pressure on oil prices in the short to medium future, many of the regional leaders have been exploring other entrepreneurial and innovative industries to supplement GDP. This has long been the case in the UAE, Dubai especially, with the transformation toward tourism and services; however other nations are following suit more actively.

A number of regional governments have already committed to investing heavily in digital innovations as seen in Saudi Arabia’s 2030 Vision, PIF’s $3billion investment  into Uber and Softbank’s recent $93billion private equity technology fund (backed by Mubadala, Saudi Arabia Government, Apple and Qualcomm). The UAE is hoping to create a FinTech Hub to rival that in London and we see a large rise in incubator programmes and Venture Capital Firms, who have historically avoided the region and invested in more predictable global locations. This highlights the region’s awareness and commitment to embracing digital disruption in order to compete on a global scale if and when the oil runs out.

An interesting article was released last week by Stanford University’s Tony Seba. In which he outlines his view on the redefinition of the automotive industry and the possibility that this shift could be the catalyst for the next oil crisis. Tony predicts that in the next eight years only electric cars, trucks, buses will be sold. Furthermore his premise outlines that most vehicle travel will be in autonomous vehicles and vehicle ownership will become a thing of the past, with the rise of on-demand vehicles. Earlier this year, the RTA announced that Taxi Drones will be in service in 2017 and they have already tested autonomous buses in parts of downtown Dubai which could give some credit to Tony’s claims.

OPEC have different views and see that the adoption of electric vehicles (EV’s) will take much longer as the current number of EV’s is less than a tenth, of 1% of global vehicles. There are further hurdles for EV’s with the cost of production, the cost of batteries and the current limit of travel range. Furthermore, the increased usage of electricity for transportation may be compensated by the increased usage of fossil fuels used in the production of electricity until renewable production catches up with demand.

Obviously, we are seeing great progress with renewable energy production in the region. Earlier this year Elon Musk discussed partnership and sharing of knowledge and resource, with HE Saeed Mohammed Al Tayer, CEO DEWA. The partnership would support Dubai’s plans to become a global hub of clean energy and green economy. The largest-single site solar project is already in progress which aims to provide 75% of Dubai’s total energy output by 2050.

Although it is unlikely that we will be swapping the Land Cruiser or the Patrol for a flying or even Electric car in the near future, I do think that the investment in digital, innovation and transformation that we are seeing across all industries will continue to grow. It gives a great opportunity to those in disruptive technology and creates a vibrant talent marketplace for those professionals who operate in digital, technology, security, IOT and transformation.

Attracting the best talent to facilitate this innovation is the key to remaining competitive and those who don’t are potentially running the risk of being left behind. As many sectors are challenging for the same type of expertise, we are noticing a skills shortage which often requires us to approach global talent from more developed markets; who cannot only lead innovation but who can also skills transfer to high-potential nationals.

When The Dust Settles; Staying Competitive In The Abu Dhabi Job market

-by Andrew Bailey, General Manager – InterSearch Abu Dhabi

There’s honestly no other place on this planet where the world’s population comes to work, other than the UAE. Almost every nationality is represented in some shape or form, along with the standard diplomatic officials and trade councils. As we know, the region has experienced tremendous growth in such a short period. The world’s dependence on natural resources still remains high, however with the oil price flickering around the US$50-$60 mark, this has given the government’s more incentive to not only diversify their interests, but has also allowed them to take a step back, consider the current landscape, make the necessary changes so we are all prepared for the markets to turn again. Abu Dhabi is no exception…

‘Consolidation’ is the buzz word in the UAE’s capital at present. Its literal definition is:

The action or process of combining a number of things into a single more effective or coherent whole.

NBAD and FGB have now officially merged, becoming the largest financial institution in the UAE, with a combined US$186bn in assets, and a market cap of US$30bn. These numbers haven’t been seen in this sector, in this market…ever.

The recent mega-merger of Mubadala and IPIC is another notable effort of consolidation. The new entity, now known as Mubadala Investment Company, who officially employs in excess of 68,000 people has become one of the largest strategic investment organisations in the world.

Masdar Institute, Khalifa University and Petroleum Institute have also made the strategic decision to consolidate, to become one of the strongest educational facilities worldwide.

Mubadala Real Estate & Infrastructure and Eshraq Properties have just announced their own merger, ensuring they both experience what appears to be a trend in the region.

On a global scale, with local impact, SNC Lavalin and Atkins have announced a merger, Aberdeen based Wood Group and Amec Foster Wheeler have also joined forces, as well as Johnson Controls and Tyco, and Emerson Electric and Pentair Valves and Controls.

The rumour mill has been working in overdrive the past 6 months; more financial institutions to merge, government and semi-government owned entities to form strategic partnerships, the healthcare sector to go through a complete overhaul, plus more.

Regardless of what actually happens next, the vision of Sheikh Mohammed Bin Zayed, Crown Prince of Abu Dhabi, Deputy Supreme Commander of the Armed Forces and Chairman of the Council is clearly aimed for the betterment of all citizens and residents of Abu Dhabi, across all sectors and industries. The impacts of change will be felt initially, however when normalcy returns, the markets will turn, and we will be back on track for more growth, and exciting times.

As Executive Search consultants, the changing landscapes offer unique opportunities for those with ‘out of the box’ skillsets. The few examples above are only a tiny glimpse into the shift that is taking place at present. These organisations now have teams of people to support the integration process, assist to develop new cultures, and support the new structures that have been put in place. We have lived through a number of economic cycles, and during these days of uncertainty, we often find the candidates who do not ‘check’ all the boxes on a job descriptions checklist, but offer something new, something different, something unique, they are the ones most highly considered.

During this transitional period, employers can afford to be more selective with their hiring. Their interview process is more thorough, and their selection criteria has become stricter…and understandably, too.

We are encouraging our candidates to stand out from the pack, differentiate themselves and demonstrate where they can add value to potential employers moving forward. The competition for senior management positions has risen, whereas the vacancies in the market have somewhat waned. Traditional skillsets seem to be a thing of the past. Employers want more from their leaders these days, whether it be a unique certification, ability to oversee more departments, comfortably adapt to new structures, or simply capability to drive strategic transformation.

We are receiving literally hundreds / thousands of new resumes every day from those feeling the effects of this bumpy market…and we have seen every shape / form / layout possible. Conventional skills are still great to have, however potential employers need to know where you’ve added value in the past, and how you plan to add value to their organisation moving forward. Keep in mind your resume / bio is going to assist you get a foot in the door. Make sure it’s worth reading. Only then, you’ll be given a chance to listen to the opportunity directly from the employer, and sell yourself accordingly during an interview. Spend time ensuring you haven’t just copy / pasted your job description on your resume. Demonstrate your strengths and where you go above and beyond. You’re paid to complete your responsibilities on your job description. This is not necessarily something compelling enough to read. Illustrate your true value add, and provide examples. The competition is tough, so ensure you’re ahead of the pack.

Now is the time to upskill, obtain that qualification / certification that you’ve always thought about, and stay agile in the current market. Make sure you are well positioned during the shifting tides, so you’re placed to make the most of turning markets…the good times aren’t far off, so ensure you know where you want to be, when the dust settles.

How Boards advance – and companies with them

By Jakob Stengel, Global Head of Board Practice, InterSearch & Managing Partner InterSearch Denmark

Introduction

The past year has seen major events – politically as well as business-wise – that only few would have predicted. Across the world, we are witnessing political dogma shifts, greater polarization, technological advancements, business model innovation breakthroughs, geopolitical turbulence, armed conflicts, terrorism, migration streams, artificial intelligence unfolding, climate change rapidly developing, alternative facts and fake news allegations, digitization of services and products, cybercriminals playing a real role in the agenda-setting, etc.

A lot of these developments will be seen as advancements and posing positive implications for a majority. However, another lot of these changes have created and will continue to create an enormous amount of uncertainty and insecurity across most nations and populations. Predictability is deteriorating and expert statements are becoming unreliable.

All in all, we find ourselves in a world less stable influenced by people less reliable. Thus, we are left trying to navigate through an opaque political, societal and economical fog – yet challenged further by a continuous accelerating technological development, implying that not only do we have to assess, plan and act through less transparent conditions but nevertheless try to steer through at increasing speed.

This puts a tremendous pressure on political, public and not least business leaders. They are the ones with the ultimate responsibility for setting course, navigating through hazardous waters and reaching destinations. Some we can look to for inspiration, others will more seek to be inspired themselves. In January and February 2017, we asked around our sizeable global network of chairmen and board members, and we are very proud to have gathered all the findings in our brand new report Global Board Survey 2017 – Advancing Boards.

We dug into how boards are composed, how they work together, how they enhance their effectiveness, how much time they spend, and which tasks they prioritize. We asked them about their look on the future from a societal perspective, from the company’s point of view and in relations to the board’s own development. We investigated where they feel comfortable, and in which areas they could innovate or improve. We looked into their position on various elements of the strategic picture, and on competencies they feel lacking. Or in other words; we investigated how boards advance – and how companies advance with them.

Context

InterSearch – Worldwide Organization of Executive Search Firms and Board Network – The Danish Professional Directors Association together performed the Global Board Survey 2017 in January and February 2017 among 1.017 corporate chairmen and board members from 52 countries on all populated continents.

Respondents represented every imaginable industry, all sizes of companies up to turnovers of more than USD 20 Billion per year, and all kinds of ownership structures.

Some common trends stood out across countries, industries and company size when reviewing the results, and included;

  • Effective board work requires more time spend, both preparatory and at the board meetings and committee meetings, compared to the past.
  • Still more boards perform regular and formal board evaluations; up to 52% of all boards from 47% in our Global Board Survey 2015.
  • Two Megatrends stood out from all others, when asked about which would most significantly impact the society and the economy; one was disruptive and exponential technologies in general, the other was geopolitical instability and political dogma shifts.
  • When asked which board trends that are expected to have the most impact, again two trends stood out; one was transformation focus and digital savviness, the other was more focus on the future of the business, less on compliance/risk/control tasks.
  • Respondents expressed an optimistic and confident view on the economy in the future, with a staggering 68% saying that they expected their company’s financial performance to improve in the coming 2 years compared to the past 2 years.
  • While boardrooms are still heavily populated by men, there is high attention to diversity demands for the future, competency-wise as well as in respect of gender and internationalization. As many as 45% said that increased diversity focus had already impacted how their board is composed. Of those, nearly 2 out of 3 reported that greater gender diversity had been the driver, and 54% said that diversity in competencies had been the aim.
  • Notably, in the same area, half of all respondents expressed that greater gender diversity is definitely to some or a large extent value-adding to any board, and another 31% said that it could potentially be value-adding depending on the situation.
  • When we asked which competencies that should potentially be added to the current board, two competency areas stood out; one was IT / Digitization, and the other (not necessarily far from the first) was Innovation / R&D.
  • As many as 82% of all boards have already had to deal with one or more disruption scenarios, and an overwhelming 92% are planning for having to do so during the next 2 years.

Doing things right, by doing the right things

Historically, most boards have kept their primary focus on the Governance, Risk and Control agenda, but boards of tomorrow will attend much more to future of the business, heading transformations and steering towards a sustainable business model. We see increased time spend on strategy, customers, innovation and stakeholder management, albeit there is a broad expectation of increasing regulation and governmental control.

Today’s boards also recognize that for the business to survive tomorrow, the fundamental business principles need to be long-term sustainable. Globalization has meant that no one – not even the Apples, the Unilevers, the VWs, the TATAs, the LEGOs, the Shells, the HSBCs, the Huaweis, the Coca-Colas, the Samsungs, the Pfizers, the Canons, or the Facebooks of the world –  can feel certain in a market leader position, as competition is agile and due to a global geographical span very difficult to keep under surveillance.

In the good old days, size was the predominant factor to determine a market leader. Today, agility is the key. However, that shouldn’t leave the big players in complete despair. They too can act agile, but in addition to constant and continuous innovation one more factor will be key if they want to stay in the game; adhering to proper quality delivered in decency and orderliness, ie. with a sustainability pillar underneath it all. Look to VWs Diesel-gate, Apple’s tax fine from the EU, Google’s fine for anti-competitive practices also from the EU, Olympus’ accounting fraud, RBS’ mis-selling scandal in the US, and many other examples of companies that despite numerous control mechanisms and all the right company values written down, they can still suffer tremendously from the hard-hitting reality when ethical (and legal) wrongdoings suddenly surface.

Recommendations to the Boards on ‘Advancing Boards’

Based on this year’s Global Board Survey 2017, and adding to that our vast experience from working with some of the world’s most influential board members from some of the world’s largest companies, we have been able to identify ten characteristics that Advancing Boards have in common;

  1. First and foremost, they are courageous. They have courage to think in new ways, to challenge status quo, to try new things, to speak out their mind, voice their concerns, share their experience.
  1. They lead. They know that the Tone at the Top is set by the very top; the board – and they accept the responsibility that comes with that.
  1. They continuously prepare for the future and do not rely on achievements and glory from the past. They personally observe Megatrends and customer behaviour patterns, all while ensuring to support initiatives that have the potential to disrupt the competition instead of themselves becoming obsolete.
  1. They engage fully. Advancing Board members do not accept positions that they can not devote enough time to. They know that the company is dependent on them.
  1. They do not rely on gut feeling when making strategic decisions, but make sure that the strategic vision, engagement and alignment rely on evidence, facts and data.
  1. They are all for diversity. Vigilance, innovation, adaptability, risk management, agility and transformations are all areas that are better supported by heterogeneity in competencies and mindsets rather than by homogeneity, hence also better supported by diversity in nationality, age, gender etc.
  1. They act timely by being well prepared, showing decisiveness, making changes when needed, without hesitation – also when it comes to changing the CEO.
  1. They exhibit integrity. The do what they say, and say what they do, and remember that sustainability is not about meaningless philanthropy, but more so about staying in business for the long term.
  1. They undergo regular and formal board evaluations, taking their own medicine in relations to measuring performance. Yearly they evaluate the competencies, inter-dynamics and effectiveness on the board.
  1. They remember why they were originally appointed to the board. It was originally all about shareholders believing they could add value. Knowing their company and trade. And they are adding that value – to the board, the company and the shareholders.

Concluding

Key here is the acknowledgement that relentless change, ferocious competition, unstoppable innovation and global turbulence are all trends that are here to stay. Radical innovation and exponential organizations will continue to challenge today’s market leaders. As already stated elsewhere, we have no doubt that companies looking to advance need to rely on Advancing Boards. We urge you as chairs and board members to continuously strive for a momentum of advancement and will end of with words of encouragement from the late founder of Apple, Steve Jobs:

‘Here’s to the crazy ones, the misfits, the rebels, the troublemakers, the round pegs in the square holes… the ones who see things differently — they’re not fond of rules… You can quote them, disagree with them, glorify or vilify them, but the only thing you can’t do is ignore them. Because they change things… They push the human race forward, and while some may see them as the crazy ones, we see genius, because the ones who are crazy enough to think that they can change the world, are the ones who do.’

To read the full report and InterSearch’s press release on the report, please go to: http://intersearch.org/news/86-news-and-press-releases/316-advancing-boards-global-board-survey-2017-results-how-boards-advance-–-and-companies-with-them

The Kingdom Comes Together

By Nicholas Harvey, Regional Director – InterSearch Middle East

On a recent visit to the Kingdom (of Saudi Arabia), my Chairman and I were sat in the departure lounge reviewing the pros and cons of the trip.  As I wrote in an earlier article, the country is facing a number of unprecedented challenges from a number of fronts including the current modest oil price, military conflicts in Yemen, Syria and Iraq, as well as funding earlier over-zealous spending commitments.  Moreover, significant payment delays on public-sector projects has had a considerable knock-on effect to private businesses, many of whom have been forced to make radical cuts of resources and to budgets.

However, the response from the country’s leaders has been encouraging.  In a nation famously guarded, they have openly highlighted the fact that the days of heavily subsidized utilities are numbered and that it will be the Saudi people who can lead their country into its next chapter echoing sentiments from JFK’s famous line “..ask not what your country can do for you, as what you can do for your country..” (or perhaps alluding to Churchill’s promise of “..nothing to offer but blood, toil, tears and sweat”!).  Well, not quite.  With sizeable foreign reserves, billions in US bond and a huge war chest, things haven’t quite reached crisis point – however, a strong response is being delivered in the shape of the National Transformation plan, now in its second year.

What both my Chairman and I did agreed upon, is that the Vision 2030 has successfully reached the forefront of intentions within the office space in the country, both in the public and private sector.  Typically, the GCC Arabs are an extremely patriotic bunch and coupled with a very persuasive Government/Royal Family we have seen an unprecedented shift of Saudis moving from the Private sector into the realm of ministerial or advisory positions with the Government.
Moreover, even those not directly employed – are being sought out to assist in the implementation and development of key objectives in the National Transformation Plan – e.g. The Job Creation and Unemployment Control Authority.  One of the differing factors from the earlier National objectives in the current Transformation Plan has been the way the private sector has been engaged.  Earlier efforts have faced criticism that policies (whilst robust in theory) haven’t succeeded to their desired extents through ineffectual implementation.

On interviewing a number of leading Saudi Executives, all agreed that there has been a clear policy to engage the private sector to help roll-out a number of these key objectives.  Transforming successful businessmen into the civil service isn’t of course an entirely new concept.  One of the key drivers of the current Transformation plan, HE Eng. Adel Fakeih, is the former Chairman of Savola, before becoming the Mayor of Jeddah and is now having considerable impact as the Minister of Economy & Planning.

However, it was of great interest to hear about the number of ‘think tanks’ and committees that have been set up to utilize the practical know-how of those leaders in the real working world (as opposed to that of theorists and pure academics).  One such example of this highlighted to me by the current CHRO (Chief Human Resources Officer) of large family group in Jeddah is that of women in the workplace.

Contrary to some of the views in the western-world, Saudi women are permitted to work.  However, the fact is that of the Kingdom’s unemployed, nearly 80% of the total are women, pointing to significant barriers to entry into the workplace.  The CHRO and others have been asked to inquire what is keeping so many women from the workplace and the results have surprised some.  Many (including myself) assumed that age-old conservative stigma or the lack of infrastructure in the office would be primarily to blame.  It is however, the cost and difficulty of transportation that came out as the biggest obstacle for woman taking up junior positions.

Coming in at an entry level position, graduates often earn just SAR3,000 – SAR5,000 ($800-1,300) per month and the cost of getting a driver every day coming in at around half that sum (as of now, there isn’t really an adequate public transport system in most Saudi towns and cities) it simply doesn’t make economic sense to work.  Naturally, this barrier to entry will prevent women gaining a career and climbing up the ladder.  Think-tanks are now evaluating alternatives, such as working from home or the cost of providing company transport.

Not all are celebrating the benefits indeed – whilst many see the positives of bringing more commercially minded individuals (with some may say) a stronger work-ethic – others argue that this ‘transformation’ has led to an exodus of seasoned bureaucrats and senior civil servants who knew how to administer Government.  i.e. it’s all very well bringing in new blood to fuel drive and energy, but without the seasoned guides there is a danger that the efforts will be confused or misdirected.

One benefit of the ‘job for life’ scenario previously seen in Government is that the Ministers/ Under Secretaries really got to know their department, framework, structure etc… Much of that know-how could therefore, be in jeopardy.  Others argue, that Government officials are still in the post and that the influx of numerous advisors and ‘experts’ from the private sector has simply doubled or added to the wage bill.  Those that have suffered under incompetent (bureaucratic-ridden) for long periods will counter that it’s high time the whole public sector went through a shake up (better an internal than external revolution) regardless of a bit of pain.

Most agree that moving forward reforms, not just within Job Creation, by also the Energy Reform and Fiscal Reforms the challenge will be on the delivery.  Presently the population appear to be supportive; however moving forward, it is likely there will be anxiety amongst the people on how the changes will impact them and the money in their pocket.  It is incongruous to suggest that the delivery will be linear, however, what has been consistent, to date, is the messaging.

One over-riding observation from the trip was the sense of an almost confucionist unity on achieving these united goals.  In every meeting, Vision 2030 or National Transformation Plan was at the forefront of most conversations and the Government can heap praise on itself for driving this vision to the minds of all.

Opportunities in the current uncertain market

-by John Robinson, Chairman – InterSearch Middle East

The current volatile and cyclical oil price has negatively affected the economic climate throughout the whole of the Middle East, especially in those GCC countries that have significant oil reserves. Capital expenditure has slowed or been delayed, budgets are being reduced and the revenue and subsidy structure of most states is being drastically reorganized.

On the face of it, perhaps not a good time to be expanding your business or acquiring other businesses; too risky. Well, in InterSearch Middle East we are doing just that and we are confident that our business expansion in this current climate is actually less risky now than waiting for a market upturn. We recently opened a new office in Abu Dhabi to complement our offices in Dubai and Muscat, and plans are well advanced for opening another office in Riyadh later this year.

Are we crazy? Maybe, but in our business plan we took account of the following:

  1. The initial capital expenditure and the built in fixed costs are reduced. Rents are lower, costs are lower and better deals can be made. Given that we are planning on, say, a 10 year horizon then we can build in cost advantages for that period.
  2. Top quality people are more available. As our competitors downsize or withdraw from the region we are able to attract and hire proven performers to join our expanding and confident business. We recently hired two top performing guys in Muscat and three in Abu Dhabi, all from our direct competitors.
  3. Our clients appreciate that we are sticking by them in difficult times and we are demonstrating our confidence in them and their market in the clearest possible way, with our cheque book.
  4. When the market upturn comes InterSearch will be in a much better position to fully take advantage of that, with a well established business already on the ground and a top performing team working closely with our clients.

Crazy? Maybe. Ask me in 5 years.

Multiple Threats in Mining: Limit these with the best commercial and technical management team

– by Cheryl Zeghers, Principal Consultant – InterSearch Oman

The driving force behind what used to be Africa’s most advanced and richest economy, South Africa, was the mining industry. Lesson’s to be learnt.

Today South Africa is still the world’s richest nation in commodity wealth with mineral reserves estimated at USD2.5 trillion. Twenty five percent of the economy can be attributed to mining.  Mining started in 1867 with the discovery of diamonds and in 1886 in the Johannesburg area with the Witwatersrand gold rush. Today South Africa is the world’s largest producer of chrome, manganese, platinum and vanadium and the second largest producer of ilmenite, palladium, rutile and zirconium.  South Africa is also the world’s 3rd largest producer of coal and a major producer of iron ore.

Today there are several challenges facing the South African Mining industry:

  • Labour
  • Rising costs
  • Political uncertainty and subsequently policy uncertainty
  • Unreliable sources of power
  • A long cycle of reduced global demand (China is South Africa’s largest trading partner in commodities)
  • Ongoing human rights issues
  • Allegations of corruption
  • What is known as the “Brain Drain” caused by skilled people leaving the country and a subsequent serious skills shortage

The governments of the Middle East are actively exploring various mining ventures as a way to diversify and boost economies. Investors do not start projects like these with an intention to fail. However, refineries burn, bridges collapse, pipelines burst and the best strategies are defeated.

The main contributor to project failure are known to be human factors. Take this in combination with the various other threats to the success of mining projects (see below) and it’s no wonder investors are nervous:

  • Lack of funding
  • Fluctuating commodity prices
  • Currency fluctuation
  • Taxes
  • Regulations
  • Delays in government approvals
  • Community opposition to projects
  • Health and safety
  • Environmental
  • Expertise
  • Semi- skilled and unskilled Labour problems
  • Security
  • Political
  • Equipment
  • Power & Water resources
  • Logistics

It is widely accepted that managerial matters are the reason for 92% of failed projects. It is essential to match competency guidelines with the exact technical and commercial expertise required so that there is alignment with a specific project.

The correct management team will convince investors and create trust in the project. Investors look for management teams with solid track records, the correct skill set, a proven ability to deliver, alignment with shareholders and a solid risk management strategy in place. A bad management team can take a good resource and destroy it.

Trust equals Investment. This means trust that resources will be allocated effectively. Trust that disreputable parts of the industry have been screened out. Trust that there is financial literacy; strong strategic understanding and world-class technical skills.

Even mining giants like Rio Tinto can make mistakes but they focus on the largest and best deposits. They also retain full management control of their projects and have the best regional strength and local knowledge in place. Rio Tinto also makes sure they have world leading commercial expertise, and the very best in project management, geology and mining.

It is imperative that an employer understands whether they need a generalist or a specialist. Different project phases (e.g. exploration; pre-feasibility/ feasibility, mine planning, funding, development and building, operations) require different skills sets from experts. It is also essential to match the skill to the specific resource whether it be a metallic mineral (copper, chrome, laterite or manganese) or an industrial mineral or rock. The specific proposed mining method whether it be underground or open cast is also an important consideration.

In conclusion, the best way to limit many of the multiple threats in new mining projects is to not only focus on the right deposits but also have the very best possible management team in place. Short cuts in either of these areas could well lead to failure.

Perfectly Placed to Headhunt Right Talent In Oman

Thanks to our strong and proven credentials, we are on top of the minds of discerning clients headhunting for the right talent and becoming a preferred choice in the industry.

InterSearch Oman and Talent Development LLC in Oman

InterSearch Oman is part of InterSearch Worldwide, an international organization of retained executive search firms operating globally. It assists companies in identifying and recruiting senior executives, specialists and difficult to fill positions on their behalf.  We use specialized recruitment methodology to ensure placement of such candidates. Executive Search is the most effective approach when the number of suitable candidates is limited or when the position is of such importance that the best available is required and the client wants to search in Oman or across several countries and confidentially is of paramount importance.

InterSearch Worldwide currently has 100 offices in 53 countries including Oman. InterSearch Oman is a partner of Talent Development LLC and branch office of InterSearch Middle East FZ LLC based in the free zone in UAE.

We are one of the oldest search firms in the Middle East, conducting recruitment assignments across the region since 1991 and opening our first GCC office in 1998 in Dubai. We initially opened our Oman office in Muscat in 2007 and in partnership with Talent Development LLC in 2013.

Talent Development LLC also provides in its own contingent recruitment services on behalf of companies who require certain mid to senior level Omani and international professionals; whichcompliments Retained Search offered by InterSearch.

Key Practice Areas of InterSearch in Oman – strengths in these domains that set us apart from competition.

We are generalists but have particular recruitment expertise in the areas including Oil & Gas, Petrochemicals, Renewable Energy and Mining, Banking & Finance and Investment, Aviation, Engineering, Construction & Development, Diversified Family Companies and Conglomerates, manufacturing, Logistics and Distribution, Consumer Goods and IT & Telecommunications.

Our major strength is that we are the only international recruitment company based in Oman. We understand the local market as well as have a dedicated and diverse team of eight people on the ground who know the best Omani talent based locally as well as overseas. Given we pride ourselves on our local impact with global reach; we are able to help our client find the best candidates for Oman whether they are based regionally and internationally

The other major strength is that we can call upon our partner companies worldwide should we particularly want to target candidates in a particular country or sector. Our staff who are based locally have specific expertise in designated areas.

As a result, we have become the preferred choice in the industry in Oman.  As we have worked with many leading names in the market including the multi nationals as well as the Omani companies (listed, privately held as well as public sector entities) with a high degree of success and client satisfaction, we get quite a decent share of our business through referrals. Thanks to our strong and proven credentials, we are on top of the minds of the discerning clients with increased frequency.

Key issues in recruitment industry in Oman

The key issues are mainly in companies which are not used to using retained executive search companies as they do not fully appreciate the amount of time required to fulfill a search. We therefore have to convince such companies on the benefits of using executive search technique as well as the loss of opportunities of not having that high caliber staff in the vacant or newly created position.

The recent reduction in oil price has affected many companies. They are reluctant to recruit new staff or replace existing ones for higher caliber expertise because of the cost constraints in their organization although they require that expertise to enable them to optimize their costs or expand into new business streams.

Changing recruitment landscape in Oman – how to adapt to changing dynamics

The market has shrunk and the competition has become stiffer, however,  we have succeeded in establishing a high reputation of providing professional and effective services for our clients. More and more companies are becoming aware of the difference between Retained Executive Search and Contingent Recruitment.

Future of recruiting with the emergence of digital ecosystem

There are various methods of recruiting staff and the emergence of digital systems has helped in a way in identifying potential candidates but that alone is not sufficient. Clients require more information on candidates than what is on the internet on various social networking tools.

The kind of CEO’s in demand in Oman

During the boom phase, there was comparatively less action in terms of changes at the top.  Many CEOs continued to be in the pole position for years; even decades in some cases and the boards didn’t feel the need for a change.  But the drop in oil prices has changed the scenario. The boards are re-strategizing and seeking a change in the direction. They are looking for candidates who could relate to their new vision, and have the experience and skills to bring that change.  Now apart from the mandatory leadership and operational skills, senior executives with excellent relationships with banks and investment firms, having good understanding of raising finance in a cost-effective manner, more commercial orientation and of course, having the ability and proven credentials to motivate the team to perform under adverse circumstances and align with the business transformation journey, are most sought after.             Many a times, we see the second-in-command with a strong profile on the above lines and the aspiration to move up the ladder as the preferred choice for the top position.

Omanisation – harness the youth power for productive purposes and sustainable growth                

Omanisation is about competence development and we have to start from the school stage to ensure we get youngsters with perfect blend of talent and attitude who could be trained for specific skills when they grow up. In my professional experience of over four decades across companies and functions,  I have seen that whenever we have provided proper training and mentored in the right manner, talent has flourished.  The oil & gas sector and to certain extent, Banking, Finance and Investment (BFI) sectors have excelled on this front. But other sectors, in general, have not done enough on this front.  Take construction sector for example. Invariable we see Omanis working in functions, say admin, HR or finance only. . Very few Omanis are in the frontline. There are few isolated success stories there but the sector on the whole has not invested enough in training and mentoring the talent. This is the story of the sector which contributes maximum to the employment market in terms of number of jobs. We need to sacrifice a part of our bottom line to build the talent in a systematic manner.

Advice to the youngsters who are seeking employment opportunities

See, it is a challenging time from the economy’s perspective. We all need to be reasonable in our expectations. Sam applies to the youngsters who are seeking specific employment opportunities. If they can’t find a job which meets their expectations or in sync with their qualifications, they need to be more flexible. No point in waiting endlessly for that dream job to come your way. There have been many examples where people have moved from one stream to another if they are unable to get the desired breakthroughs or their destiny has taken them to a different path. Take my caser as an example,  I’m a Mathematician by qualification but I moved on to IT and HR quite early in my professional journey.

The government is making efforts to diversify the economy which is going to lead towards creation of jobs in new areas. “Tanfeedh” is a commendable Omani government initiative which is driving focus on select key industries such as Manufacturing, Tourism and Logistics and the youngsters could channelize their energies to take advantage of opportunities that are going to arise in these high growth industries.

Harris Karaolides Appointed As General Manager – Dubai

After almost 20 years with the group, Harris Karaolides is a worldwide veteran of InterSearch.

Since his appointment as General Manager, Dubai in July 2016, Harris has been focused on continuing to grow the high-performing executive search team of 12 people in Dubai and manage the performance of the regional research team to ensure 100% delivery across all global, region and local assignments. He played a critical role in leading InterSearch’s Dubai office to +25% year-on-year growth in 2016.

Harris relocated to the Middle East three and a half years ago and has been instrumental in building a strong client base across the Middle East & North Africa region, as well as entering new markets such as Iran and Nigeria.  Harris’ sector specializations include Consumer Goods, Pharma & Life Sciences, Manufacturing and Engineering Products & Services.

Highly regarded within InterSearch Worldwide and honored with InterSearch’s Global Excellence award, Harris is famous for his honest and straightforward consultative style. The ultimate realist, hard-to-fill roles are his sweet spot and he effortlessly convinces senior talent to consider career opportunities in hardship locations.  His repeat business ratios are impressive, as is his determination and ability to shortlist the best candidates in the market in record time.

Initially joining the Athens office in 1998, Harris quickly became the Managing Partner of InterSearch Greece where he executed multiple assignments across Greece and Central-Eastern Europe for a variety of local and multinational corporations. While leading the Athens office, Harris was also the Global Media Relations Manager for InterSearch and played a significant role in increasing visibility and awareness for the Global organization.

He holds a Master’s Degree from Syracuse University’s prestigious S.I. Newhouse School of Public Communications in New York and has previously worked in sales, marketing and operations for reputable corporations in Athens, Greece and New York City, USA.

We wish Harris all the very best in his new role and may he continue to grow the InterSearch Middle East regional headquarters in Dubai, with great success across multiple geographies in the MEA region.

Email: h.karaolides@intersearchme.com

Hiring The Right Talent In Iran

In January 2016, P5+1 world powers and Iran reached a historic deal ending decades of isolation, lifting sanctions in return for halting Iranian nuclear ambitions. This opened up a huge extension of the MENA economies for business which was previously inaccessible for western companies. Access to nearly $150 billion in frozen assets, ability to export oil without restrictions and a highly educated talent pool brought in a paradigm shift in the way MNCs looked at Iran.

However, this has not changed much for American companies where US sanctions still apply giving European, Australian, and Asian companies a head start.  Mega deals announced in 2016 include Daimler’s joint venture for the production of Mercedes Benz trucks in Iran as well as Air Bus’s agreement to supply Iran Air with 114 planes. Most recently, Boeing signing a $16.6 billion deal to supply 80 aircrafts for civilian use marks the beginning of the trend that Iran is emerging as a market that even US companies cannot afford to ignore.

According to the World Bank’s ‘Ease of Doing Business” ranking, despite positive reforms related to trading across borders, Iran has dropped three spots over the past year but still outranks Egypt, Iraq and Libya. As a result of Iran’s economic landscape and labor market trends over the years, more than 50% of the country’s talent pool has an engineering degree or qualification, most commonly electrical, mechanical or industrial engineering. However, due to the declining oil and gas industry, today consumer goods, pharma and IT have emerged as Iran’s top hiring and growing industries.

Over the next five years, we will continue to see more companies enter the Iran market as well as grow their existing operations, with a focus on establishing new manufacturing plants.

What makes Iran an important market for Western companies?

  • The drop in oil prices has pushed the traditional Middle East economies to implement serious austerity measures often in the form of layoffs. Iran on the other hand is a market with the capacity to expand
  • Sluggish growth in emerging markets such as China makes global corporations look for newer growth markets like Iran
  • A virgin market like Iran largely untouched for decades provides a great opportunity for their goods and services
  • Iran managed to be a $394 billion economy, second in the region despite strict sanctions. Opening the market for business would further expand the economy
  • Expected huge infrastructure investments in modernizing existing infrastructure

Challenges

Despite being home to a highly educated talent pool and business opportunities, new entrants to the Iran market will face difficulties due to:

  • Limited experience (70% of Iranian talent is under the age of 35)
  • Lack of exposure and experience working in multinational corporate environments
  • Language skills; fluency in English is rare
  • Fluctuating Iranian Riyals
  • Still cut off from mainstream international banking system like SWIFT. Though SWIFT claims to be reinstating Iran to pre-sanction levels, wire transfers to Iran are still prohibited.

Regional tensions and a new US administration pose a threat to the stability of the region and as a result some companies choose to tread light when it comes to Iran; but these companies represent a small percentage in comparison to the number of companies establishing their presence and having the first-mover advantage.

Hiring an Iranian national

Ever since the sanctions have been lifted, companies who previously managed the Iran market from their Dubai office are venturing into hiring locals to be based in Tehran. Hiring the right Iranian national or in some cases attracting Iranian expats to return to their home base, is crucial to the future success of any organization looking forward to building a presence in Iran. Due to usage of local language in doing business, getting jobs through references and networking, and the lack of quality profiles in job boards, hiring poses a major challenge to many organizations. Executive Search would be an effective methodology to hire hard to find talent.

InterSearch Middle East has helped a number of Multinational clients hire key members of leadership team in Iran. If your business is considering hiring in Iran, we could utilize our expertise and experience to find the right talent for your organization. Write to Summer Hamad at s.hamad@intersearchme.com  for more information.