Category Archives: HR Capital News

GCC countries grapple with unsustainable public sector staffing levels

New research has suggested that public sector staffing levels in the UAE are unsustainable as oil prices shrink government revenue and automation replaces the need for certain jobs to be carried out by humans.

According to the World Economic Forum (WEF), government jobs account for 80 per cent of nationals employed in the GCC, which represents the highest central government wage bill (as a percentage of GDP) in the world at 9.8 per cent – nearly twice the world average and four times that of Japan.

Ahmed (who asked his real name and employer not be identified) works for the government, like so many thousands of others. He is sanguine about the impact of automation on jobs despite widespread evidence of workplace disruption from robotics and artificial intelligence. “Anyway, labour costs are low here in the Gulf so I don’t think it’s a problem for us,” he said.

However, weaning nationals away from government jobs and making them ‘future ready’ is crucial if the economies of the six-member GCC are to propser from the march of digitisation. A new report, ‘The Future of Jobs and Skills in the Middle East and North Africa’, by the WEF pulls no punches and says the GCC is not exempt from the workplace upheaval experienced by other major economies.

Change starts with education and reconfiguring the skillset of graduates. Put simply, the region has a skills gap and needs more employees with STEMs (Science, Technology, Engineering, and Mathematics) degrees to satiate the demands of technology based economies.

Kai Chan, distinguished fellow at INSEAD’s Innovation and Policy initiative, argues the emphasis should be on raising participation in data-intensive and science-based subjects in school. “Right now, the uptake of STEM degrees is very low – even when they are chosen, most of the students in the region are not globally competitive.”

Yet amid the uncertainty, there are opportunities. A white paper by IDC (a market intelligence firm for the IT sector) predicts 800,000 new jobs globally by 2021 as a result of automation but says new workforce development programmes are critical to ensure employees are prepared for the next wave of innovation.

There will be strong demand for professionals who blend digital and STEM skills with traditional subject expertise such as digital-mechanical engineers and business operations data analysts, as well as user interface experts who can facilitate human-machine interaction, says the WEF. The radical reshaping of work may also open a wider range of careers to women in areas like remote and virtual working. Still, it is not just technology that is forcing change in the GCC – socioeconomic and demographic factors will result in new occupations, a decline in others and new ways of organising and coordinating work.

If harnessed correctly, these changes will help resource-rich Gulf states diversify their economies by reducing dependence on oil and gas exports. Even so, contending the dualities of automation and socioeconomic disruption will require leadership said Nairouz Bader, chief executive officer of IIC MENA, an executive search partnership. “In the past, leadership was about clarity and clear vision: Now leadership is the ability lead in a VUCA (Volatility, Uncertainty, Complexity and Ambiguity) world”.

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Non-oil industries growing steadily as UAE economy continues to diversify

Growth in other sectors expected to hit 3.3 per cent after widespread investment

Non-oil growth in the UAE will hit 3.3 per cent this year, according to forecasts by the International Monetary Fund (IMF), as the country continues to successfully diversify its economy.

Overall growth is expected to be only 1.3 per cent because of lower oil production, but widespread investment in non-oil sectors is clearly paying off.

“The UAE is adjusting well to the new oil market realities. Its large financial buffers, diversified economy and the authorities’ robust policy responses are facilitating the adjustments while safeguarding the economy and the financial system,” said Natalia Tamirisa, head of the IMF mission to the UAE.

Consumer goods saw the highest employment growth of any UAE industry in the first quarter of 2017, suggesting that other sectors are capable of picking up the slack during the slowdown in oil production.

Earlier this year, recruiters were predicting a boom in hiring in banking and finance – partly a result of the Government Accelerator programme to boost the hiring of nationals.

However, the purchasing managers’ index (PMI) – an indicator of the economic health of the manufacturing sector – levelled off after hitting a 19-month high in March.

“The PMI shows that while overall activity was firm going into the second quarter, organisations are still facing significant challenges as job creation remains subdued and pricing power is limited,” Tim Fox, head of research and chief economist at Emirates NBD told The Khaleej Times.

Spending on infrastructure is set to grow steadily in 2017, after the government reduced spending during the previous two years in response to the low price of oil. This could mean increased hiring in the construction and energy industries, in particular. The introduction of VAT next year will also create extra tax revenue.

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Should you invest in your stars or strugglers?

Some surveys suggest managers spend up to a day each week managing their poorest performers. This is despite receiving only marginal gains in productivity from this group. In uncertain financial times, can you really afford to prioritize your strugglers – or is it better to invest in your stars? According to McKinsey research (Harvard Business Review, 2002), successful organizations focus on attracting and keeping high or ‘A and B’ performers. More importantly, their policies actively push out low or ‘C’ performers; particularly managers who negatively affect team performance.

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Digitization expected to create half a million new jobs for Saudis by 2020

Country’s population is the most connected and best educated in its history, says Economist report

Saudi Arabia’s ambitious digitisation plan is expected to play a significant role in creating half a million new jobs by 2020, as part of the country’s National Transformation Programme (NTP).

The aim of the programme is to build a knowledge-based economy in the post-oil era and ease unemployment in the Kingdom, which currently stands at around 11.5 per cent. Forecasts say that the Saudi working-age population will grow by 226,000 annually, reaching 17.9 million by 2025.

A report by The Economist Corporate Network, called ‘Shaping the Future of Work’, states that Saudi Arabia’s population is the most connected and best-educated in Saudi history, and well-prepared for work in a digital environment.

Mina Morris, associate partner at Aon Hewitt Middle East, explained how so many jobs can be created. He said: “In the context of the changing economic landscape for Saudi Arabia, it is important to relate the creation of new jobs in digitisation to the old economic principle of supply and demand.

“The NTP, hich has been sponsored by the highest levels of Saudi government, sets out clear areas where demand will be created by embracing technological changes, such as artificial intelligence, and a more joined-up approach between public and private sectors.”

Even in 2015, the World Economic Forum’s ‘Network Readiness Index’ reported that Saudi Arabia was ranked 35 (out of 143) – as a leader in network readiness in the MENA region.

“In conjunction with this, the government will need to create initiatives designed to create the supply – developing the skills and competencies to enable young Saudis to meet to this digitisation mandate,” said Morris. “This readiness to step into these roles requires a structured development approach, which enables the young population to be ready to perform in a new environment.

“The potential is there – Saudi millennials are reportedly some of the most digitally connected in the region, and this needs to be harnessed in a way that can result in tangible performance in the workplace,” he added.

The SAP Training and Development Institute is among the organisations striving for sustainable work for Saudi millennials. SAP has held more than 350,000 student training days in the past two years, and collaborates with 35 university partners who have trained in excess of 5,400 graduates.

Ahmed Al-Faifi, managing director of Saudi Arabia at SAP, has been quoted in the press as saying “digitisation is the fourth industrial revolution, and the Saudi government has one of the world’s most ambitious plans for using digitisation to boost employment”. Al-Faifi is positive that through partnerships between the public and private sector, as well as with educational institutions, Saudi youth can be trained to work in digital roles, and existing talent can be upskilled.

The private sector is increasingly on board. Last year, Cisco signed a Memorandum of Understanding (MoU) with the Saudi Ministry of Commerce and Investment, which laid out a roadmap for the accelerated pace of digital transformation.

Saudi Telecom Company (STC) is also a major player in the creation of digital jobs. Many roles have been created in the telecom sector as a result of the digital revolution and there will be yet more jobs in IT as Saudis become more connected.

A report in 2016 by the McKinsey Global Institute estimated that the Kingdom’s economic transformation could create six million jobs.

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HR Capital News: New gender balance guide launched for the UAE workplace

Developed with OECD to provide practical instructions for employers to help the country achieve its equality targets

The UAE Gender Balance Council has unveiled a Gender Balance Guide: Good Practices for the UAE Organisations, at the Government World Summit in Dubai.

Developed with the OECD, the guide applies to the public and private sectors, and contains practical instructions to encourage organisations to adopt a more “gender-sensitive approach” in the workplace.

It includes HR tools, policy-making guidelines, good practice guidelines and indicators and recommendations for public and private organisations to increase gender-balanced representation and leadership.

Sara Khoja, partner at law firm Clyde & Co, welcomed the guide and said many employers in the country already offer family-friendly entitlements to help women in the workplace. “It can sometimes be difficult to establish a direct correlation between enhanced benefits and employee retention,” she said. “But retaining women during the middle years of their careers, when typically employees start families but also go through important periods of developing skills and experience, can ensure a pipeline of female talent for development and later promotion.”

Hopscotch is an organisation that helps women to find work in the UAE. Its co-founder and managing director, Helen McGuire, is thrilled at the release of the new guide. “We know that the UAE has the one of the most educated female populations in the world and yet thousands of women remain without work due to the historic lack of balanced and flexible options in the workplace,” she said.

“We have been working hard to change that and this guide, with its outlines on work-life balance, family-friendly work practices and women’s leadership development, will give both the public and private sector the confidence to push further.

“Despite a general desire from UAE organisations to hire and retain more women in senior positions, there are currently very few laws, let alone guidelines that actively support, advise or protect females in the workforce. This is such a positive step forward and something we can also make use of when consulting for our clients internally in the future,” McGuire added.

The UAE is aiming to become one of the world’s top 25 countries for gender equality by 2021. Last year, as part of this goal, the Gender Balance Council implemented the UAE Gender Balance Programme, which aims to assess existing legislation and national policies that support women.

The UAE’s vice president, Sheikh Mohammed bin Rashid Al Maktoum, together with the Gender Balance Council, have already implemented the ‘Gender Inequality Index’, which is issued annually by the United Nations Development Programme (UNDP). In line with the UAE Vision 2021, the Index is designed to enhance the country’s efforts in driving women’s participation in national development.

Mona Ghanem Al Marri, vice president of the UAE Gender Balance Council, said: “In 2015, the UAE ranked 19th in the Global Gender Gap Report issued by the World Economic Forum, and first in the GCC and second in the Arab world in the Gender Inequality Index of the Human Development Report, which means that all of us have a huge responsibility to enhance women’s participation across all sectors, which will further raise the UAE’s ranking in international gender balance reports.”

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HR Capital News – Private Sector Organizations To Be Monitored Over Emiratisation

New decrees oblige some sectors to employ Emiratis in certain roles or face fines

The UAE’s Ministry of Human Resources and Emiratisation (MOHRE) has issued a new decree stating that certain sectors must employ Emiratis in particular roles.

Private sector organisations in the construction and industrial sectors, employing more than 500 workers, must now hire at least one Emirati as an occupational health and safety officer.

Organisations employing over 1,000 workers must hire a minimum of two Emirati employees to work as data entry clerks. These employers must also register the company on the Ministry’s electronic system, Tasheel, in order to obtain work permits for their employees. The Tasheel system can only be accessed by UAE national employees.

MOHRE will assist organisations that must employ Emiratis by providing a list of trained, qualified and competent national professionals. Additionally, MOHRE is willing to form partnerships with business owners to provide training for employees.

“Employers in violation of these resolutions will be prevented from obtaining new work permits for new employees,” said Ammar El Banna, senior associate at Hadef & Partners law firm. “We are not aware of any cases were these resolutions have been tested yet. However, the ministry can generally apply a fine of at least AED 10,000 to employers in breach. In addition, and in case of any fraud that leads to a breach to the above resolutions, the Ministry can refer the employer in question to the prosecution office.”

Sara Khoja, a partner in the Employment Group at Clyde & Co LLP, concurs that there could be stiff consequences for breach of the new rules: “If an employer doesn’t comply then the Ministry of Labour could potentially block it from being able to renew existing work permits or applying for new ones,” she said.

“The new requirement is likely to be strictly enforced as the Ministry has announced an intention to follow up with targeted facilities to ensure compliance with the new ruling. In light of this, and given the potential consequences for non-compliance, large construction and industrial sector companies, as well as those organisations with more than 1,000 staff, should have made sure they are in a position to comply with this obligation from 1 January 2017.”

There is also a third change, which states that certain establishments’ Emiratisation categories can be upgraded from one classification level to another if they meet certain reduced Emiratisation levels.

The UAE has had a system of classification in place since 2010, designed to incentivise employers to adhere to existing Emiratisation. The system classifies organisations into one of three categories.

“The new ministerial decree states that in certain circumstances, companies may be upgraded to a higher category by fulfilling new reduced Emiratisation requirements and thus benefiting from reduced fees payable to the ministry for certain professional employees,” Khoja said.

Emiratisation laws have been in place for more than a decade, and they give employment priority to UAE nationals, with different sectors having certain quotas they must adhere to.

Khoja explained some of the rules: “If an employer employs more than 100 staff, an Emirati or GCC national public relations officer (PRO) must be appointed.

“All organisations wishing to employ new secretaries must contact the National Human Resource Development and Employment Authority (Tanmia) who will nominate UAE nationals for the post.

“The role of human resources manager should be carried out by a UAE national,” she added.

“In practice, the quota of HR manager and secretary requirements are not rigidly enforced; however, it is advisable for employers to comply with the Emiratisation requirements as practice may change at any point and also because there are benefits associated with compliance.”

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Saudi Arabia introduces new public sector performance rules

Civil servants miss out on 11 days’ pay in calendar switch, and could face losing their jobs if deemed below par

The Saudi Arabian government has introduced a raft of new reforms, which mean 1.5 million civil servants will be paid by the Gregorian calendar rather than the Islamic Hijri calendar, costing them 11 days’ pay each year.The move brings public sector reward practice in line with the private sector, and is accompanied by reforms aimed at introducing a new working culture and performance management practices.

Government employees will be subject to mandatory job performance evaluations to determine their eligibility for bonuses or pay rises. The new reforms, announced by the Ministry of Civil Services, officially came into effect at the start of the Islamic new year on October 2, and aim to increase performance, raise productivity and develop a work culture in line with the National Transformation Plan reforms announced earlier this year.

As part of the new reforms, civil servants can also be dismissed from their roles for the first time – but only if an employee has been given three years to improve their performance. As part of a new evaluation system, employees will be denied salary increases unless their performance improves and will face disciplinary action if no improvement is seen by the second year. In the third year, the employee’s file will be sent to a specialised body to consider dismissal.

Workers will be classified under five categories from ‘excellent’ to ‘unsatisfactory’.

‘Excellent’ employees will be given a pay increment of 5 to 6 per cent, while ‘very good’ and ‘good’ employees will receive 4 per cent and 3 per cent rises, respectively. ‘Satisfactory’ performers will gain a 1 to 2 per cent increase and ‘unsatisfactory’ will see pay remain static. Bonus payments for state employees have already been cancelled and ministers’ salaries cut by 20 per cent as part of a wider drive to reduce public sector costs. Wage increases have been suspended and allowances curbed for public sector employees, according to royal decrees and a cabinet statement published by state media.

The government is aiming to reduce the public sector wage bill to 40 per cent of spending by 2020, from 45 per cent currently.

The original article was published here:

HR Capital News – UK organizations in the GCC unfazed by ‘Brexit’


Optimism reigns among British organizations operating in the Middle East, despite the result of the recent in-out referendum regarding the United Kingdom’s membership of the European Union (EU).

The so-called Brexit vote is viewed as “very much an opportunity” by UK firms in the region, according to Jonathan Macpherson, deputy chairman and COO at the British Business Group Dubai & Northern Emirates. While the initial reaction to the EU referendum saw the pound hitting a 31-year low against the US dollar and equities worldwide losing more than US$2 trillion, he says, stock markets have now settled and are back to usual trading patterns.

“Sterling remains weaker against the US dollar and most economists predict this will be the norm for the short- to medium-term, depending on the UK government and Bank of England policies in the coming months,” says Macpherson. “For British businesses in the UAE – and the wider Gulf region – [this] is good news in the short-term. The weaker pound is benefiting British businesses that report and repatriate revenues back to the UK.”

A weaker pound also bodes well for local organizations buying British goods and services. “This depends on whether procurement departments have already hedged prices. If not, then again, the price of British quality goods and services will be relatively cheaper than they were a couple of months ago due to the value of the dirham to the pound,” he says.

Although Macpherson does not want to speculate on whether Brexit would lead to a drop-off or an increase in GCC-based UK companies’ hiring intentions in the short- to long- term, he believes that demand for British professionals may grow. “What we can say is that UAE-based companies may be more inclined to look to the UK for talent, knowledge and expertise due to the current dirham-to-pound exchange rate.

John Martin St. Valery, founding partner at Links Group, a British-owned and managed professional services firm based in Dubai, agrees.

“We don’t anticipate any change in the hiring rate at Links Group, but we may see British expatriate employees extending the amount of time they intend to stay in the UAE. As a company, we stand to benefit from this longer-term employment,” he says.

St. Valery adds that existing British employees are reaping the benefits of a lower sterling-to-greenback conversion rate, allowing them to remit funds back home or pay their mortgages.

“Should sterling remain low, this may encourage more Britons to seek employment abroad, which could broaden the talent pool,” he says.

He is also bullish on the Links Group’s own business prospects. Currently, around 45 per cent of the company’s client base originates from the UK. “Since trade flow between the [UAE and the UK] is unlikely to be affected, it will be business as usual for us and we may also see a spike in UK organizations looking to internationalize to the Middle East.”

For now, the general sentiment among members of the British Business Group remains upbeat. “The short- to medium-term economic outlook for the region, while not predicted to be stellar in growth terms, is positive and the short-term uncertainty over the economic and political future of the UK should not dissuade businesses from looking to expand into this market,” says Macpherson.

The original article is available here:

Middle East employers are rethinking organizational design

Weak economic growth and a changing market is forcing leaders to operate differently, finds new report

The current economic climate has prompted many employers in the Middle East to rethink their organizational design as they change priorities in accordance with market needs, according to a recent survey by professional services firm Deloitte.

The Global Human Capital Trends 2016 report has found that around 40 per cent of respondents from the region are currently engaged in a restructuring exercise focused on nationalization, efficiency and excellence, and budget optimization.

Commenting on the report, Bharat Gupta, senior director at Alvarez & Marsal Middle East Limited, says ongoing organization restructuring is a natural extension of a change in strategy – which in itself is driven by lackluster economic growth in the region.

“[Following] the global financial crisis, organizations worked towards increasing their product offerings and widening their geographic reach on the back of easy credit and improved business sentiment,” says Gupta. “However, the sharp correction in oil prices since September 2014 has resulted in a domino effect of reduced liquidity and slowdown in demand. As a result, many organizations that over-extended themselves are now adjusting their strategy to focus on their core businesses and/or segments with better cash return ratios.”

The re-design process has had three noticeable implications for organizational structures in the region, says Gupta. These are:

  1. Strengthening of capabilities required for strategic focus areas, including hiring new mid-senior management and re-training.
  2. Downsizing of teams that are no longer required, as part of the shutdown of loss-making, cash-consuming and long payback business areas.
  3. Strengthening of support functions such as finance, IT, procurement and HR as shareholders realize that lack of focus on these functions in the past had exposed the organization to higher risks. Some banks and shareholders are forcing CEOs to bring in stronger CFOs that can provide better visibility to the organization and negotiate new capital structures.

“The other area on which some organizations haven’t focused much is strengthening the middle management,” adds Gupta. “Strong and empowered middle managers carry the burden of the organization – [they] deliver the strategy and free [up] senior management to focus on strategic matters.”

Because it takes time to develop a strong and experienced middle management, he recommends that organizations trust their younger employees and delegate tasks to them, and invest more heavily in career development and key HR processes.

The Deloitte study also noted that, despite undertaking organizational restructuring, many regional organizations still revolve around traditional and functional structures that lack the flexibility required to adapt to a changing landscape.

Gupta attributes this to the fact that the region is dominated by family-owned organizations, which tend to have centralized decision making.

“There are exceptions where shareholders of diversified organizations have formed industry-focused boards with significant independent board members that supervise what goes on underneath,” he says. “Such organizations have better capability to adapt and respond to changing business dynamics.”

This article was originally published here:

Technology is changing the Interview Process

Technology is having a significant impact on the recruiting process. It is changing the way companies think about recruiting, how they hire, and how they vet potential candidates. In particular, it is having a profound impact on the interview process. It is no longer necessary to be in the same room to conduct an interview, and new software programs allow companies to vet potential candidates before they even meet them.

Let’s take a look at the current and emerging trends that are shaping the modern job interview process:

Trend 1: Vetting Candidates on Social Media

By now you are probably aware that most companies use social media as a way to vet potential candidates. It’s an effective way for them to add some context to what they see on a candidate’s job application. It also serves as a way to cut down on the number of applicants.

For candidates, it’s an opportunity to add more value and experience than solely what is written on your resume.

Trend 2: Using Skills and Behavioural Testing Software

Many companies are now using skills and behavioural testing software as part of the job application process. This allows them to ask targeted questions that are specifically related to the position. This provides companies with some insight into the personality of the candidate to assess whether they are a good fit for their organizational culture. The benefit of using this software is that it reduces the amount of time companies spend on screening and helps them focus on interviewing candidates who are better aligned with their core beliefs.

Trend 3: The Video Interview

The video interview has quickly replaced the standard phone interview. Using technology such as Skype, Google Hangouts, and other video software, companies can interview candidates online, providing them with another method to meet potential linchpins, both near and far.

Video allows companies to put a face to a name, pick up on visual cues from the candidate as they answer questions, and it is a more effective method than using the phone interview alone. It also saves the time and hassle of trying to coordinate meeting times, locations, and getting to and from the meeting.

Trend 4: Casting a Larger Net Geographically

Technology has also allowed companies (and candidates) to cast a larger net. Companies can now interview candidates in other cities who are willing to relocate. This opens up the candidate pool, potentially helping companies find a more qualified or experienced individual whom they wouldn’t have been able to find in the past.