QUDURAT - Health | Aon · regional operations are headquartered in the UAE. We work in 11+ countries across the region, ... Implying ‘capabilities’ in Arabic, QuduratTM is the

QU

DU

RAT A PIONEERING RESEARCH STUDY BY AON HEWITT, MIDDLE EAST

Aon

Hew

itt Aon Hewitt, part of Aon Corporation (NYSE:AON) is the global leader in human resources consulting and outsourcing solutions. We partner with organisations to solve their most complex benefits, talent, and related financial challenges, and improve business performance. Aon Hewitt delivers the strongest team of professionals in the industry who have access to the widest breadth and depth of expertise and services, in more locations, and for more industry segments than any other human resources firm. With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees.

Our singular focus is always on our clients: we deliver distinctive value, top-rated customer service, and measurable business impact.

With data backed insights and pragmatic expert advice, Aon Hewitt has been providing consultancy and thought leadership in the Middle East since 2001. Aon Hewitt’s regional operations are headquartered in the UAE. We work in 11+ countries across the region, successfully partnering with over 500+ clients across public and private sector. We have a dedicated team of multi-cultural consultants, including our team of financial services industry advisors at McLagan. We understand the unique strengths and challenges of human capital in the region, and bring this experience to every client solution.

Contact InformationT +971 (0) 4 389 6300F +971 (0) 4 386 1690

[email protected]

Tabl

e of

Con

tent

s Chapter 1 Introduction 03

Chapter 2 The Paradox of Plenty - The Labour Market Opportunity 07

Chapter 3 Engaging Talent - To Reap the Demographic Dividend 19

• Current Levels of Employee Engagement 21 • The Next Generation Workforce 27 • The Future is Feminine 33 • The Public versus Private Sector Divide 36 • Can Engagement Levels Get Any Better? 39 • Actions Towards Increasing Engagement 41 • Summing Up 43

Chapter 4 The DNA - Of the Middle East Workplace 45

• Leaders Make the Difference 49 • Other People Matter 59 • Making Choices - Other Important Workplace Preferences 61 • Summing Up 66

Chapter 5 Conclusion 67

Chapter 6 QuduratTM Research Design 71

Chapter 7 References 77

Chapter 8 Glossary and Notes 79

Chapter 9 Acknowledgements 81

02

There is a limited window of opportunity to harness the region’s demographic potential. Insights from

the QuduratTM research study lead us to believe that accepting the status quo is no longer satisfactory.

Reaping the demographic dividend for the future necessitates focused thought, relevant research,

active debate and deliberate action from policy makers, business leaders and employees.

The advancement of national talent is the

single biggest HRissue in the region

03

Intro

duct

ion Along with the economic opportunities that exist in

the Middle East as a result of its energy resources, the region is similarly endowed with a young and growing population. According to an Arab Human Development Report (AHDR)1 in 2010, “the number of children and youth is at an all time high in the region. The increase in the proportion of 15 to 24 year olds in the total population, referred to as the ‘youth bulge’ combined with the growth in the overall population has resulted in the most rapid growth in the number of young people in the region’s modern history.” This could prove to be a hugely significant demographic dividend. Having a larger proportion of the population in the working age pool may enable the region to develop a diverse and flourishing economy, based on its human capital potential. The reverse also applies. If the Arab world is unable to effectively develop its future generations, the outlook would look less promising and we could instead be facing a demographic time-bomb.

As policy makers, organisational leaders and human resource (HR) professionals in the region, we are at a decisive crossroad. Our choices and actions today drastically impact how the region is able to cultivate its human resources to build a positive and sustainable future. The road ahead is not certain. The broader Middle East region and more specifically the Gulf Cooperation Council (GCC) countries2 must create enough jobs to cope with population growth and ensure that talent is appropriately skilled, supported and engaged to be productive within the labour market.

Though the development of local or national talent3 has been a priority for decades, an increased sense of urgency now prevails to get it right this time. There is only a limited window of opportunity and a pressing need to learn from past experience and make more informed decisions to shape the future talent landscape within the GCC.

The Arab World has a huge demographic window of opportunity over the next decade. The region’s

employable population is expected to almost double by 2050, to reach 278

million from the current 145 million1

Chapter 1

04

05

At Aon Hewitt, we believe that asking the right questions is equally as important as understanding the right answers. We also believe that the answers should be grounded in robust research and evidence that is relevant to the region versus largely depending on popular opinions, experiences and wholly relying on global ‘best practices’. We wonder whether the current approach to national development will continue to be most effective towards advancing local talent in the years ahead. Are organisations aware of the needs and demands of the talent pool in order to achieve higher levels of engagement and performance? Do employees have realistic expectations from their employers and their jobs in order to be motivated and productive? Do we have the confidence to develop our own regional best practices to address the most important HR and labour market challenges in our region?

And at the most fundamental level, a pertinent question remains: What truly drives and motivates talent in the region? How and why do individuals make certain choices and decisions and how do these impact the world of work?

In an effort to understand the workplace motivators and orientations of the GCC workforce, Aon Hewitt designed and launched its pioneering research study, QuduratTM. Implying ‘capabilities’ in Arabic, QuduratTM is the first and largest research study of its kind in the region. It represents the voice of 4600 employees across 5 GCC countries and 40 organisations. The study provides compelling insights into the strengths and preferences of talent in the region and what drives them to contribute to their best efforts towards their jobs, thereby impacting engagement, performance and productivity.

At the most fundamental level, a pertinent question

remains. What truly drives and motivates

talent in the region?

06

We believe that only by gaining an in depth knowledge of the individual capabilities and motivational drivers that determine the performance and productivity amongst the region’s workers can we truly claim to understand the GCC’s talent landscape. This not only shapes how Aon Hewitt seeks to advise and partner with our clients – it also forms the foundation of how successful the HR profession will be in resolutely grasping and fully exploiting the demographic window of opportunity that the next decade offers in the GCC.

We welcome your feedback and thoughts on this report and look forward to your support and participation towards Aon Hewitt’s ongoing QuduratTM research study.

David JonesChief Consulting Officer Aon Hewitt Middle East

Radhika PunshiHead of Applied Research and SolutionsAon Hewitt Middle East

We are delighted to share the initial findings of the QuduratTM research study with you. Aon Hewitt’s evidence-based, research led approach to HR consulting, both at a global and regional level, ensures that we have a firm foundation of knowledge, along with our undoubted experience, on which to base our insights. The QuduratTM research study is ground breaking, both in terms of scope and scale, allowing us to have high confidence in the validity, reliability and significance of our findings and to be robust in our conclusions. In hindsight, we are extremely glad we took the first steps in conducting such a thorough research project, recognising that human capital development needs to be deeply rooted in the context of the social-cultural uniqueness of the region versus importing practices from other parts of the globe. We have been surprised and challenged by some counter intuitive findings from the study, contesting many widely held opinions and stereotypes about talent in the region. This has only increased our curiosity and quest to ask further questions as well as deepen our insights through ongoing commitment to further research.

QuduratTM represents the voice of 4600 employees, across 5 GCC

countries and 40 organisations

07

The

Par

adox

of P

lent

y The Labour Market Opportunity

A range of economic, social and cultural factors have contributed to the construction of an extremely unique labour market in the GCC. The demographic surplus can be viewed as an enormous economic and human capital opportunity. The expanding workforce in the region constituted of increasing numbers of young people, along with the continued attractions offered to foreign workers leads us to believe that future growth could be driven by more fully harnessing human capital resources, rather than endowments of fossil fuels.

“The dynamics of demography in the Arab Region have created some

of the most intense pressures on labour markets observed anywhere

in the post-World War II period”World Bank4

Chapter 2

08

09

Figure 1 Population Growth in the Arab World

The Arab world’s employable population will grow dramatically over the next 10 years.

~20 million to25 million people

will exit the working-age pool

~80 million to 90 million people

will enter the working-age pool

Age** (Male), years

70+

65-69

60-64

55-59

50-54

45-49

40-44

35-39

30-34

25-29

20-24

15-19

10-14

5-9

0-4

4

6

9

15

15

5

6

9

14

14

4

6

9

15

20

22

22

23

23

23

5

6

9

14

19

21

21

22

22

22

Age** (Female), years

70+

65-69

60-64

55-59

50-54

45-49

40-44

35-39

30-34

25-29

20-24

15-19

10-14

5-9

0-4

2010 population of Arab world* (estimated), millions

*Arab world compromises the 22 nations in the league of Arab States.**For age groups where data are not given in 5-year increments,

an even split was used as an estimate.

Source: Global Insight2

10

A more standard assessment of the social changes already afoot in the region is to view them as a demographic disaster in the making, fretting that there are already, and will continue to be, insufficient jobs. This misapprehension is based on the ‘lump of labour fallacy’ and was once used in the post war western nations to argue that women should return home from the factories they had been ‘manning’ during the conflict and relinquish all jobs to ‘breadwinning’ males. The fear was that there would not be enough work opportunities for everyone, leading to higher levels of unemployment. This is a fallacy because the absolute level of employment is not fixed.

As more people become integrated and active in the formal labour market, it improves both the supply side efficiency and productivity of an economy. It also helps enhance the aggregate demand through associated increases in overall income levels. The International Labour Organisation (ILO)6 estimates that up to 50% of GDP growth in the United Kingdom (UK) over the past 60 years is due to the increased integration of women and other previously marginalised social groups (the disabled, older workers, younger workers) into productive formal employment.

This debunks the idea that a society can become more prosperous, productive and offer more positive working experiences for the region’s populace by paying more of its citizens to be unemployed or underemployed.

At a broad level, countries in the GCC need to create sufficient jobs to absorb the expected surge in the labour force for these economies to achieve growth that is sustainable and not entirely dependant on the price of oil. This is essentially the paradox of plenty, the region is endowed not only with significant amount of energy reserves but also a young working age population that can significantly enhance the growth trajectory of the economy, if channelled in the appropriate direction. Failure to do so will squander one of the greatest demographic opportunities in recent times.

11

The most important facets of the GCC labour markets are

Population Growth and Youth Bulge

By 2020, the GCC population is forecast to reach 53.5 million, a 30% increase over 20007. The Arab world is expected to grow to 598 million by 20508. More than 60% of the region’s population under the age of 30 years as a result of high fertility rates in the region9. This ‘youth bulge’ has resulted in the most rapid growth of young people as a proportion of the region’s population in recorded human history. Though this is a demographic window, it puts increasing pressure on labour markets to create the right opportunities to meet the accelerating growth of indigenous labour supply in the region.

Job Creation

In terms of labour markets within the GCC, the major challenges are about providing a sufficient quantity and quality of jobs for the growing numbers of young people in general, and women in particular, entering the workforce in the near future. To keep up with this pace of growth, the region would need to create 85 million new jobs10 by 2020. This is estimated to require year on year GDP growth of 10% for each successive year during this decade to create sufficient capacity to generate enough jobs to meet the supply of talent. This is something the region has never achieved to date due to the macro economic impact of the historic volatility of energy prices.

To keep up with this pace of growth, the

region would need to create 85 million new

jobs by 2020

12

Unemployment and Underemployment

Even while economies are growing rapidly unemployment amongst the Gulf’s national population, particularly amongst the young, remains exceptionally high. Youth are economically active but unemployed or underemployed. Recent reports11 reveal that 48% of Saudi nationals between the ages of 20 and 24 are unemployed as are 31% of Saudi nationals ages 25 to 29. In Bahrain, 33% of those aged 25 to 29 are unemployed. In a recent report by the International Council on Security and Development12 on the UAE, it is claimed that high levels of unemployment persist despite the country’s economic strength and the ‘paternal state’ system in which citizens are provided with extensive benefits and, often, secure public sector jobs. Reducing this unemployment rate, particularly amongst youth, in both the public and private sectors13 is an essential task.

The perceptions of jobless young nationals provide insights on the causes, and potential solutions, to their unemployment. For instance, they feel that their education system, particularly at the secondary school level, is inadequately preparing them for the workplace. The skills taught and the relevance of education to the job market is seen as insufficient. Although higher education is viewed more positively, young locals perceive a lack of training programs and few clear links between universities and the workplace. In addition, the private sector is viewed negatively by many who view private employment as hard work with poor pay and fewer benefits, having grown up in a society which reveres public sector jobs with high status and benefits. Nonetheless, young nationals defy the idea that they would be unwilling to work for a private company, with many expressing eagerness to do so. Finally, despite their willingness to work in the private sector, nationals still expect the government to play a strong role throughout the employment process, from improving the quality of school curricula to directly creating more jobs.

Migration Flow

A dominant feature of the GCC is a strongly segmented labour market, both at a macro level and micro, organisational level. Of the world’s 20 countries with highest proportion of international migration in 2010, 9 are in the Arab world14, Qatar (87%), UAE (70%), Oman & KSA (28%). The resulting ‘rent seeking’15 behaviour of GCC nationals and the high levels of migration flow into the region contribute to the unique nature of the region’s labour market and experience of the workplace.

Another unique factor across the GCC, is the ‘addiction’ to cheap, readily available labour in the workforce. Originally a reaction to the initial exploitation of fossil fuel discoveries in the 1960s and 1970s to fill the lack of capacity within nascent labour markets, reliance on expatriate workers has become ingrained within the work culture of the region. The financial strength provided by these energy endowments over the intervening decades has allowed a pattern to develop of relying on foreign workers for the vast majority of opportunities in provision of physical and service labour, along with a high proportion of technical and managerial jobs.

National identity, long term social stability and environmental sustainability are arguably all at risk from the continued pursuit of these policies. In the shorter term, the immediate impact has been the creation of a highly segmented labour market. Expatriates at all levels are typically hired for specific roles. Labour legislation and social attitudes ensure that moving from employer to employer, or even from job to job is prohibitively difficult. At the same time, the prioritisation of nationalisation policies across most countries mandates quotas for some industries or reserved occupations for GCC nationals. This segmentation reduces the incentives for individuals and organisations to invest in human capital development.

13

Whilst the regulation of the region’s labour markets is amongst the most interventionist in the world in favour of local workers, access for the majority of expatriates into most GCC countries remains alarmingly open by international standards. Any economic immigrant simply requires a signed employment contract to officially enter the workforce across the GCC. This means that employers are able to employ some of the cheapest labour in the world and they have become used to this arbitrage advantage. From a macroeconomic perspective, the savings from employing cheaper foreign labour come as a cost to the wider economy, as a high proportion of the wages earned locally are not spent locally. For instance, remittances from Saudi Arabia’s estimated 9 million (mostly Asian) migrant workers are soaring as the Kingdom continues to import labour for its massive development plans. At an estimated USD 33.4 billion over a 20 month period (up to August 2009)16, earnings sent abroad equalled 4% of Saudi Arabia’s gross domestic product. Saudi Arabia was the world’s 3rd largest source of foreign worker remittances after the United States and Russia, which are far larger economies17.

In the UAE and Qatar, approximately 94% of private sector jobs are held by expatriate workers. The core challenge to increase employment in the commercial and entrepreneurial sectors lies not with the tastes of private sector employers, rather it is with the structure of local labour markets. This low skill, low wage environment encourages a relative lack of investment in training and development across the workplace. Expatriates are not perceived as a long term priority for investment and nationals are more likely to job hop in the highly segmented labour markets of the region. In sum, the existing approach delays and diminishes efforts amongst HR professionals in the region to achieve organisational development and enhance productivity for the long term. As long as the current pattern of open economic migration into the GCC continues, a low wage economy, based on low skills and low productivity will persist. In such an environment, national talent are effectively discouraged from competing with expatriates in the labour market, and the broader incentives towards entrepreneurship are also stifled.

14

Women’s Participation in the Labour Force

In addition to the impact of the population increase within the approaching decades, relatively low levels of female participation in the GCC workforce combined with continuing changes in the social position and expectations of young women, imply that there is a further latent potential supply of labour ready to take up work. Social and political changes are already gaining prominence to encourage more women to enter the formal labour market and remain active post marriage. A recent amendment in the UAE labour law, for example, provides workers with the right to part time working. The developing role of women in the GCC labour market is particularly instrumental to whether the next 10 years represents a demographic dividend or disaster, from both a quantitative and qualitative aspect.

Attracting, motivating and retaining more women in the workplace will be a growing priority for regional employers over the next decade. For instance, the Kingdom of Bahrain has a record of high educational achievement with a female literacy rate of 85%18, close behind male literacy which stands at 91%. Despite this, women constitute only 18% of the labour force. In addition, 30% of unemployed females are university graduates. Although education and professional qualifications are high, existing participation by women in the GCC workforce is relatively low compared to international benchmarks. In the UK, for example, 70% of women contribute to the economy via formal paid employment. Other countries show similar and increasing levels, 63% of Singapore national women work, 74% in Norway and 55% across the EU as a whole19. We can expect to see increasing pressure for a similar pattern to emerge across the region as we proceed through the first half of this century.

Attracting, motivating and retaining more women in the workplace will

be a growing priority for regional employers over the next decade

15

Saturated Employment in the Public Sector

The public sector plays a central role in the regional job market. The ILO20 argues that around 29% of total employment in the Arab World is filled by the public sector which amounts to around 38% of current expenditures, double the world average. Government jobs are perceived to be appealing since they are seen to provide higher benefits and allowances, job security and status. The high concentration of employment in the public sector, particularly by those educated and thus better paid, aggravates the opportunity cost of directing human capital away from jobs which stimulate economic growth. In the long run, the costs associated with high concentration of public sector jobs will cause lower total factor productivity growth. As the supply of local labour seeking work continues to multiply significantly, the ongoing capacity of the public sector to increase employment of GCC nationals is limited.

Recent developments in government spending across the GCC have exacerbated the saturation of employment of nationals in the public sector, as well as sowing the seeds for further challenges in the future. Following the ‘Arab Awakening’ this year, Saudi Arabia has increased its government spending by a further 25% of GDP for 2011, according to the International Monetary Fund (IMF)21. Qatar recently awarded salary and pensions increases of between 50 - 120% to public sector workers. In its latest Regional Economic Outlook, the IMF states that the current pattern and scale of public expenditure increases are effectively diverting funds from infrastructure, healthcare and education investments.

In the GCC, the high and increasing public sector wages are at odds with the objective of boosting the number of nationals in private sector employment, as commercial organisations cannot match the favourable pay, benefits and terms and conditions available to government workers. Moreover, the public sector alone cannot deliver sufficient growth in employment and productivity to meet the future needs of the region. According to the IMF, over the past decade, 7 million jobs have been created in the Gulf, but only 2 million have gone to nationals. A shift towards subsidising citizens in work, rather than bolstering the public sector could provide an answer. If relative wages go up, it becomes harder to find competitive private sector jobs unless it is possible to provide weighted subsidies for citizens regardless of where they work.

Over the long term, we believe that there will need to be stabilisation and possible reduction in absolute earnings growth to absorb the growing supply of labour, as the commercial sector will not have the capacity to recruit more national workers at the current rates. This premium can be significant. For instance, Aon Hewitt’s compensation data from the UAE Banking Forum 201122, with 19 participating banks, indicates there is an average guaranteed cash premium of 17% for staff, 14% for junior management, 11% for middle managers and 23% for senior management roles held by UAE nationals as compared to roles at the same level when held by expatriates.

In summary, the talent landscape in the GCC is influenced by the rent seeking behaviour of nationals currently employed in their home countries. In labour markets, the economic rent is the value of the wages earnt over and above that necessary to keep workers in their current employment. While there are many labour markets where talent commands a market premium, we do not believe the general labour market conditions in the GCC will support this in the longer run. This is primarily due to the rapid expansion of available talent entering the labour market from the local population and the relative lower levels of marginal revenue productivity of those workers. Current labour market structures and practices will not meet future imperatives and we will see nothing short of a revolutionary change in these within the next decade, amongst which will be a relative decline in wage rates in the region as local labour supply increases steeply.

16

Population under 30

Youth Unemployment (>25)

Female Employment to Population Ratio (15-64 years)ILO Key Inidcators of Labour Market, 2010

Female Workforce Participation Rate (15-64 years)ILO Key Indicators of Labour Market, 2010

Nominal GDP per Capita(IMF WEO, 2010) Source: World Bank, IMF, ILO

UAE

66%

23%

37%

44%

57,884

OMAN

64%

29%

24%

29%

19,405

QATAR

63%

22%

50%

53%

74,901

BAHRAIN

48%

33%

31%

41%

20,474

KUWAIT

42%

28%

42%

44%

37,009

KSA

61%

41%

15%

18%

16,266

Figure 2 Key Macro Indicators in the GCC

17

What does this mean for HR in the region?

First, we are likely to see an acceleration of the regulatory amendments to the functioning of GCC labour markets, as seen in Bahrain and the UAE most recently. Bahrain is the primary GCC nation to implement policies to encourage greater competition and deregulation in the operation of the labour market, combined with introducing taxes and levies on the employment of expatriates. Bahrain’s Labour Market Regulatory Authority (LMRA) has been driven to implement such changes as the country has some particularly challenging labour market conditions. Nonetheless, it is likely that further steps to incentivise the local workforce towards investing in their own human capital development will continue to expand across the region as the supply of labour increases.

An overwhelming majority of private sector jobs across the GCC are held by expatriate workers. Decades of reliance on imported labour have generated deeply entrenched views about many private sector careers as unattractive to nationals, precisely because they are associated with challenging working conditions. In turn, many private sector employers expect to receive more output from expatriates in terms of working hours than they would from nationals. There is a need to professionalise blue collar work and afford it the status it receives elsewhere as a craft. The relative success of Oman and Bahrain in this respect could provide a useful role model across the GCC. This could be combined with supporting smaller, owner managed businesses as an engine of job creation, productivity and innovation.

We are likely to see an acceleration of the regulatory amendments to the functioning of GCC labour markets

18

The short term impact of regional labour markets becoming more competitive would most likely see increases in general inflation as nationals currently earn premium compensation and the private sector may temporarily see profit margins fall. In the long term, we expect that national’s earnings would revert to a competitive equilibrium.

The timescale for this adjustment process is not clear, However, the fundamentals of labour market economies demand that earnings will fall in aggregate as the supply of labour increases over the next decade. The demographics strongly suggest that securing local talent will become more focused on skills and competencies rather than a quantitative focus on achieving quotas.

We also believe that organisations will need to adjust to the needs of a more productive workforce. As more of the economic productive potential of local populations within the region are efficiently and effectively incorporated into the workforce, companies will need to rethink the traditional career ladder that rigidly and exclusively links seniority to pay and power. This will be a challenge wherever there is a preference for hierarchy, although it is also clear that the current approach is increasingly socially anachronistic and economically unsustainable.

It is usual for Aon Hewitt to work with clients in the region with a minimum of 12 or more steps in their grading structure (and sometimes 20+ individual organisational levels). There are increasing pressures to extend work hierarchies still further within the GCC, a trend that is moving in the opposite direction elsewhere in the world. With growing numbers of young people and women entering (and staying in) the workforce, along with older workers likely to seek ways to continue to work, under current approaches, already creaking hierarchies will be stretched to the limit. New roles for older, experienced mentors and flatter or more fluid structures will also have to be considered.

Thus, Aon Hewitt firmly believes that only by gaining a broader and deeper understanding of what truly drives and motivates talent in the region, appreciating the strengths, motivators and preferences towards the workplace, will we be able to take an evidence based, strategic approach to human resources required to meet these challenges and reap the demographic dividend potentially available in the next phase of the region’s development.

19

Enga

ging

Tal

ent Engaging Talent to Reap the Demographic Dividend

Employee engagement23 matters. Decades of research in the areas of employee motivation and engagement have proven that organisations which achieve higher levels of engagement demonstrate better business results, organisational performance and increased level of customer service. This creates longer term value for stakeholders. In a nutshell, engaged employees are more driven and willing to exert additional, discretionary effort towards supporting the success of their organisations.

Achieving higher levels of employee engagement in the Middle East matters significantly. The Middle East is one of the fastest growing regions in the world, economically and demographically. It is imperative to ensure that the current and future cohorts of employees joining the workforce are capable, motivated and engaged to deliver high levels of performance to facilitate the pace of development. It is critical that human capital development further accelerates economic growth. According to the IMF24, the GCC is forecast to show particularly strong growth of 7.8% in 2011, with Qatar leading the way at 20%.

This implies that the region is delivering some of the most resilient levels of macroeconomic performance in the world and persistently high oil and natural gas prices are likely to support the region’s growth story for the foreseeable future. With a burgeoning economy and unique regional labour market characteristics, harnessing the collective energy of the workforce towards achieving higher productivity could provide the region with the competitive edge compared to other labour markets.

The engagement and advancement of national talent is without doubt the single biggest HR issue in the region

Chapter 3

20

21

Current Levels of Employee Engagement

Findings from the QuduratTM study show that the current level of employee engagement is fairly modest in the GCC at 54%. This indicates that approximately only 1 out of 2 employees is engaged and committed to the organisation, willing to contribute more than what is normally required of the job. This implies that even an incremental improvement in the level of engagement has the potential to enhance the aggregate performance of the workforce.

Compared to the rest of the world, although slightly lower, the average level of employee engagement in the GCC is not dramatically different. However, the gravest concern is that the lowest levels of engagement have been reported by women and national talent, especially the younger cohort of nationals. Labour and organisational policy must focus on increasing the level of engagement of these key demographic cohorts as they are the core of the future employable population, and can not be alienated from the workplace.

22

Figure 1 Employee Engagement by Region

Asia PacificNorth America

Latin America Africa

Europe

GCC1

61%

74% 56%

54%

52% 59%

1 GCC average level of empolyee engagement is from the QuduratTM study. All other regional norms are based on Aon Hewitt’s employee engagement

studies across the globe covering 6,000+ organisations, surveying 6.5 million employees in 140 markets across 70 industries.

Aon Hewitt’s Best EmployersTM Global Average is 79%Aon Hewitt’s Best EmployersTM Middle East Average is 80%

23

A striking finding from the survey shows that the level of engagement amongst GCC nationals working in their own home country is 51%. This is consistently and significantly lower as compared to expatriate counterparts, who report average engagement levels of 57%. Amongst all nationals, Emiratis report the lowest levels of engagement at 46%, followed by Bahraini nationals at 49%.

24

48 46 63 49 67 58 57 51

Figure 2 Overall Levels of Employee Engagement by Country and Gender

UAE (E)

UAE (N)

BAHRAIN (E)

BAHRAIN (N)

QATAR (E)

QATAR (N)

GCC (E)

GCC (N)

48

51

6

7

72

4

7

62

4

5

49

Fem

ale

Enga

gem

ent (

%)

Overall Engagement (%)

53 60 54 67 50 63 49 48

Male Engagem

ent (%)

GCC and Country-wise engagement data based on QuduratTM research study - reported for Nationals (N) and Expatriates (E)

25

Figure 3 Overall Levels of Employee Engagement by Age Cohort

59 63

N/A 65

57 67

N/A 60

46

44

4

3

40

6

4

53

5

1

45

44 37 59 51 66 62 54 49

50 60 77 56 70 56 62 58

55+ Engagement (%)

Age

s 25

- 3

4 En

gage

men

t (%

)

Ages 35 - 44 Engagement (%)

Ages 45 - 54 Engagem

ent (%)

UAE (E)

UAE (N)

BAHRAIN (E)

BAHRAIN (N)

QATAR (E)

QATAR (N)

GCC (E)

GCC (N)

64 65 68 N/A 66 N/A 56 57

Under 25 Engagement (%)


26

Figure 4 Overall Levels of Employee Engagement by Education

UAE (E)

UAE (N)

BAHRAIN (E)

BAHRAIN (N)

QATAR (E)

QATAR (N)

GCC (E)

GCC (N)

58 58 58 64 56 70 55 52

Secondary School and Vocational (%)

45 58 58 71 46 59 35 48

Bachelors D

egree (%)

47 40 66 46 64 43 55 44

Masters Degree and Higher (%)

55

50

5

7

75

5

7

N/A

5

8

45

Oth

ers

(%)


27

The Next Generation Workforce

The Middle East faces some extraordinary opportunities and challenges with regards to its young population. The IMF estimates that the proportion of young people (those under 25 years) as a share of total population in the Arab world will peak at an average of 32% across the Middle East and North Africa in 2015, compared to an average of 17% in Western Europe25. The talent of young people, and the ‘youth bulge’ they collectively represent, offer the greatest productive opportunity to the region since the discovery of oil and gas in the middle of the last century. According to the AHDR26 (2010) “countries with a large youth population have a unique demographic window of opportunity, as a large number of young persons would lower the dependency rate. More active young persons who work not only increase a country’s productivity, but also diminish the economic burden imposed by non-working cohorts (elderly and children).”

It is important to stress that having a young working age population is a necessary but not a sufficient condition for enhancing productive capacity required to drive economic growth. The population needs to be educated and empowered with skill sets that are relevant to the demands of today’s workplace. On the other hand, a young, working age population that is uneducated, lacking in skill sets or disengaged could be a recipe for social unrest that is highly counterproductive for growth. The GCC region today is blessed with excellent demographics that are in sharp contrast to many more mature economies that have to deal with issues arising from an ageing population. However, policy makers in the region, in conjunction with both the private and public sectors, need to create enough opportunities to absorb the additions to the working age population. This requires a clear alignment between the skill sets, competencies and expectations of future workers to available jobs.

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To ensure that the region taps into the tremendous potential that its youth have to offer, organisations need to find new ways to attract and retain the new generation of workers. This implies that we must understand the distinct triggers for engagement and general workplace preferences of young people in particular, to ensure this youth endowment is leveraged to its maximum.

Initial results from the QuduratTM research study point to 2 key findings regarding the youth workforce:

•Those agedbetween the agesof 25 – 34 are least engaged compared to all other age groups. This is a serious concern

• Also, Aon Hewitt’s research establishes that the youngest group of employees, those under the age of 25 years, are very distinct in their attitudes and preferences towards work. Organisations would need to innovate and adapt new ways in order to keep this generation fully committed and productive

The Middle East as a region suffers from the highest level of youth unemployment27 in the world, currently at over 25%. According to the International Finance Corporation (IFC), the economic loss of youth unemployment exceeds USD 40 - 50 billion annually across the Arab world, equivalent to the GDP of countries like Tunisia or Lebanon. Youth unemployment is a growing concern internationally, with the IMF reporting that other emerging market countries such as South Africa are experiencing jobless rates in excess of 60%28. Even in the United States, which is a relatively flexible labour market, the latest figures indicate that the unemployment rates amongst this group are as high as 18%29. The social implications of youth unemployment are dire as witnessed by disruption caused to society by the ‘Arab Awakening’, rioting in the UK and recent protests on Wall Street that are quickly spreading around the world.

However, there are some unique features of youth unemployment within the GCC. For instance, amongst those seeking employment, those with higher levels of education are more likely to experience unemployment for longer periods than their less educated counterparts. As an example, unemployment in Bahrain tends to last for up to a staggering 8 years30.

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A deeper understanding of the reasons behind the differences is critical to utilise the potential of the next generation workforce in the GCC. We discuss our findings on the youth workforce below.

Onset of a Premature Mid-Career Crisis (the 25 – 34 year olds)

Amongst all age cohorts who participated in the study, those between the ages of 25 - 34 years are remarkably the least engaged at 47%. This is in sharp contrast to those under 25, who display the highest levels of engagement at 64%. Such a drastic decline in engagement levels between these two age groups is extremely alarming. It is clear that the drivers for engagement during the early years of an individual’s job are distinct from what it takes to keep them motivated and driven as their careers progress. Organisations need to be much more agile in ensuring that they are not only attracting young talent and keeping them motivated in the initial years, but continue to develop the early to mid career employees. One possible explanation for a sharp decline in engagement for the 25 - 34 year olds could be attributed to the lack of structured development programs at their particular career stage.

In most organisations within the GCC, we find that there are formal national development programs for interns/graduates which typically last up to 1 year. These programs are usually well designed and ensure adequate coaching and guidance to the youngest professionals as they enter the workplace. They are particularly important for 3 major reasons. First, many industries in the region are targeted with achieving increasingly stringent nationalisation quotas. Such initiatives serve as a major tool to attract new national recruits in a very competitive segment of the labour market. Second, many organisations report they need to provide remedial, lengthy induction programs for national recruits due to a shortfall in their educational and/or technical experience. Third, unlike students in the rest of the world, most national ‘fresh graduates’ have little or no work experience upon taking their first job and thus need to be supported in the softer aspects of their induction to the formal workplace.

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Hence, the widespread prevalence of formal national development programs usually leads to the under 25’s being actively nurtured during their early days within the organisation, which builds high expectations and contributes to increased levels of engagement. However, post completion of these programs they are very quickly mainstreamed into the organisation with limited formal support and mentorship. This can potentially lead to a sense of feeling abandoned, a startling reality check into the pressures of their daily jobs. As the years progress, they are also expected to take on additional societal and familial responsibilities. This group of 25 - 34 year olds should be at the prime of their careers and it is unusual for this cohort to report the lowest levels of engagement. Organisations must pay close heed to this and ensure that they continue to coach and support the early to mid career professionals in order to avoid the onset of a premature mid career crisis. More generally, organisations will benefit a great deal from creating a culture of ongoing coaching, learning and development. This will not only support nationals across all career stages, but also extend opportunities to expatriate workers, who are typically not a priority for training and development related investments.

Only in the first 2 years and after 20 years of their careers, is a

national employee satisfied with learning and development opportunities

within the organisation

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The Young and the Restless (the under 25’s)

The QuduratTM study has also brought to light some very distinct characteristics for the under 25 year old cohort. This generation definitely stands out from everyone else. Aon Hewitt expects that this cohort will drastically alter the work culture in the GCC over the next few decades. The younger generation is predominantly much more ambitious and career orientated, with a sense of impatience of moving through the ranks within the organisation quickly. They have a heightened sense of entitlement and though they are currently the most engaged of all age groups, their energy needs to be channeled appropriately. If not, this could lead to a greater risk of frustration amongst this cohort. Interestingly, this group reports the greatest extent of dissonance between their perceptions of who they are at work and their sense of ‘self’ in regards to their personal lives. They also believe that their important personal values are ignored and are not actively encouraged at work. It is apparent that this group is experiencing a conflict with regards to their personal and work identities. Though the onus lies with the individual, it is the responsibility of organisations to help this generation navigate through these challenges and provide a supportive working environment. The more traditional human talent management approaches that are currently in place in the region will prove to be ineffective to keep this generation motivated, even in the near term.

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Figure 5 Portrait of the Young and the Restless

As compared to everyone else, those under the age of 25 years:

Have a 37% greater sense of identity dissonance reporting that they feel like a completely different person

at work than who they are at home

Are significantly at a higher risk of attrition andare more likely to view their job as a means to getto other jobs (58% of youth as compared to 35%

for all other age groups)

Are 17% more egalitarian, concerned with distribution of contribution and not power at work

Are experiencing a 21% greater sense of conflict between their work and personal values

Perceive a greater sense of support from their manager, even though they value it less (72% of youth as

compared to 59% for all other age groups)

Report a 20% higher positive orientation towards their teams and a greater freedom to express their views

even if they may be different from their manager

All differences reported between the Under 25’s and other age groups are statistically significant at a confidence interval of 95%

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In short, the challenge for employers in the GCC is to offer a compelling new employee value proposition to fully attract, engage and retain the cohorts of young men and women who will be entering the workplace in the decade ahead. To truly tap into this youth potential, our results tell us that organisations should seek to:

•Createamuchstrongeremployer brand to genuinely engage and inspire the future generations of workers to the purpose and vision of the organisation. Senior management, line managers and HR will all need to deliver on the employee promises to their youngest co-workers

• Reorganise how work duties are allocated and structured to instill a sense of meaning and empowerment into own immediate areas of work and how it connects to the larger picture

•Designongoing coaching and development cycles to build a greater sense of congruence between their personal and work identities and values by recognising their individuality and contributions to the organisation

•Createmore fair, equitable and socially connected organisational cultures

•Providedefinitiveopportunities for professional training and development

•Demonstrateclearcommitmenttocareer progression by communicating a plan with regards to their career paths and growth within the organisation based on satisfying the mutual expectations of the employee and employer

The Future is Feminine: Get Ready for More Oestrogen at the Workplace

The increased and extended participation of women in the workplace presents another major opportunity to further enhance the productivity levels within the GCC. While the overall regional participation levels of women in paid employment are amongst the lowest in the world, they are increasing at a rate that is amongst the highest globally. For instance, in Saudi Arabia, there were less than 5% of women of working age in the labour force in 2000 and this has increased to just under 15% in 201031. The economic and social benefits of increased female participation in the workforce will only be realised once employers ensure that women are supported through targeted HR strategies in order to be wholly successful.

Findings from the QuduratTM study reveal that the existing people policies and practices within organisations are not effectively supporting working women, leaving much to be desired in order to make the most of their contribution and performance in the workplace. We find that on an average, women are less engaged than their male counterparts in the region, with engagement scores of 50% and 57% respectively. Moreover, we find that GCC national women and Emirati women in particular are the least engaged.

Understanding the drivers of engagement for women and the key differences in their orientation to the workplace will be pivotal in determining the degree to which individuals, employers and societies tap into this hidden potential. A distinct strategy towards managing the female workforce needs to be developed with more women due to enter the workplace in the next decade, expected to spend longer periods of time in formal employment and achieving higher levels of educational attainment.

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As compared to their Male counterparts at work, Female employees:

Have lower level of pride from being part of their organisations (10% lower than their male colleagues)

Are significantly less engaged than their male counterparts (50% and 57% respectively)

Have 23% greater confidence in leadership, believing that their senior leadership is making the right decisions in running the company and looking after the interest of

its employees

See lower levels of trust and mutual respect at the workplace (10% lower than their male colleagues)

28% more national women are comfortable working in mixed gender teams than national men

As compared to their male co-workers, 11% fewer women believe that all employees are treated fairly

irrespective of gender

Figure 6 Portrait of the Quintessential Female Employee

All differences reported between Female employees as compared to Male employees are statistically significant at a confidence interval of 95%

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In certain aspects, Aon Hewitt’s data demonstrates that women are arguably more suited to the challenges of the GCC labour markets than their male counterparts, negating popular opinions and stereotypes. We find that women, including national women, who choose to be active in the labour market seem to report no significant differences between ‘who they are at home versus to who they are at work’ compared to their male colleagues. This implies they are coping as well, if not better, in managing their various societal roles. We also find that both men and women have responded in very similar ways to the importance of balancing the needs of work and personal life and being recognised for their knowledge and expertise at the workplace. When asked how they would react in a situation where their family disagreed with an important decision related to their job, 70% of men and women, national and expatriate, reported that they would follow their own choice versus following the wishes of their family. This once again defies convention where it could be expected that women employees would respond in more traditional ways, choosing family over work and experiencing conflict in managing the pressures of work and family life. Quite on the contrary, they seem to be coping extremely well.

Aon Hewitt’s data demonstrates that women are arguably more suited to the challenges of the GCC labour markets than their

male counterparts negating popular opinions and stereotypes

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In conclusion, labour markets at large need to more actively contribute to the employment of women as they face higher unemployment risks in Arab countries, and they are often excluded from the labour markets. Also, though a larger number of women are attaining higher levels of formal education, paradoxically the probability of unemployment increases with their level of education. This represents a ‘double whammy’ of missed productive opportunity in the region’s workplaces. Thus, organisations must be more proactive in creating a supportive and inclusive work environment for women who do find employment opportunities, despite the many constraints in doing so. Increasing their levels of engagement and commitment to the organisation and providing for more flexible policies and work arrangements is absolutely crucial.

Aon Hewitt’s data points to the fact that women, both national and expatriate, who choose to be employed, seem to be a self selected group that are able to create a sense of balance between their work and personal lives. Interestingly, they are more comfortable working within diverse cultures and teams as compared to their male counterparts and are generally more progressive in regards to their work orientations. In this regard, our research overturns many of the stereotypes about female readiness for the workplace in the Middle East. The responses of women in our study clearly indicate they are willing and capable. They report a greater degree of alignment and readiness to the modern GCC workplace in many aspects than men and it firmly sets the challenge to employers and policymakers to ensure they are ready in turn for more oestrogen in the office.

The Public versus Private Sector Divide:

The public sector has traditionally been seen as a preferred employer amongst GCC nationals. This is largely due to a perception of favoured terms and conditions of employment, which may include shorter working hours, better pay and benefits, job stability and higher perceived status. It is therefore, not entirely surprising to discover that there are major differences in the drivers for engagement between the public and the private sectors. However, given that future employment opportunities and growth will come largely from the private sector, it is most instructive to understand these differences and how they can be applied to workplace practices by governments and organisations striving to attract and retain national talent within the private sector. Aon Hewitt’s research indicates that the engagement is higher in the private sector at 62% as compared to the public and semi-government sectors at 48% and 55% respectively. This points to a number of particular drivers which can be emphasised by employees, employers and policymakers in order to attract and retain national talent to more commercial undertakings in the labour market.

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More specifically, workers in the private sector report significantly higher levels of pride in work, a stronger sense of teamwork, more positive relationships and personal strengths of zest and proactivity. All of these aspects serve as positive drivers towards higher levels of engagement as compared to their counterparts in the public sector. These aspects of their orientation to work can be emphasised by private sector organisations as key elements of their differential employer brands. They can be used as a means to attract and retain national talent, instead of attempting to compete by matching salary differentials and other perceived material benefits. Moreover, respondents from the private sector also report a consistently higher level of support from their manager, a greater sense of fairness in work practices and greater satisfaction with their learning and development opportunities. A stronger coaching environment is another differential attraction of the private sector in attracting talent within the region’s tight labour market for GCC nationals. Private sector workers report significantly lower levels of optimism than their public sector counterparts, although this could be due to a lower sense of job security.

Interestingly, the semi-government sector has some particularly distinct results in terms of differential drivers of engagement. QuduratTM data indicates that workers in the semi-government sector are the least career orientated and have the lowest levels of trust. However, they report the highest levels of pride in customers, a relatively higher tolerance to diversity and the most satisfaction with their physical work environment. The semi-government sector will continue to gain popularity as a leading employer of talent as sovereign ownership of organisations prevails within certain key sectors, such as energy, healthcare and aviation. These organisations face unique challenges, as they redefine themselves to closely reflect a more private sector approach to attracting and retaining employees, while competing with the traditional public sector for talent.

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Figure 7 Different Drivers of Engagement in the Public and Private Sectors

15% more employees report a greater sense of self efficacy in the public sector, answering the question

‘when I get what I want, it is because worked hard for it’

There is a 24% difference between the public and private sector approach to learning from mistakes

suggesting a more fearful and less innovative workplace in the public sector

There is a strongly significant difference in the degree of identity dissonance between the public and private sectors, with a greater alignment between the sense

of self and values in the public sector workplace (45% versus 65%)

14% more private sector employees believe they are ‘growing and learning on the job’ compared to their counterparts in the public sector

Managers are consistently perceived more positively in the private sector than the public sector and are seen to be more supportive of team success and individual coaching (66% in the private sector versus 49% in the public sector)

There is a consistent difference of 10% in the sense of fairness and equal treatment across all aspects of diversity in the private sector than in the public sector

Public Sector Private Sector

All differences reported between the Public and Private Sector are statistically significant at a confidence interval of 95%

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Finally, workers in the public sector report a significantly higher level of self efficacy than their private sector counterparts. Employees with a higher sense of self efficacy take more personal ownership for solving problems, achieving goals and being able to handle difficulties. A possible explanation of this distinction is a perception of ‘tokenism’ in the semi-government and private sectors amongst nationals. Within these sectors, nationalisation quotas have led to a focus on achieving a numerical target of new recruits above providing productive and positive work for GCC nationals to truly demonstrate their potential contribution and develop their careers. Over time, this may increase their degree of cynicism about the ability to positively influence their contribution in such an environment. This is also supported by the higher degree of identity dissonance amongst private sector workers as seen from the QuduratTM data. Those working in the public sector, the vast majority of whom are GCC nationals, report significantly more consistency and alignment between how they perceive themselves at home and at work. When workers feel able to be genuinely themselves in the workplace, with a greater sense of shared personal and organisational values, they are more likely to be more engaged and more productive. The private sector could clearly learn from the public sector in this regard.

The QuduratTM study thus brings to the forefront some new drivers that matter significantly to employees that can be leveraged by the private and semi-government sector to compete for talent. A deeper understanding of these relative advantages of the sectors, along with possible lessons to be learnt and applied from the public sector, is critical. Employment growth in the GCC will have to be disproportionately generated from commercial organisations and it will be imperative for HR departments in these companies to gain advantages and mitigate their relative barriers in terms of their employer branding in order to attract and retain national talent.

Can Engagement Levels Get any Better?

The short answer is a resounding yes! Though the overall level of engagement in the region is currently low at 54%, there is a considerable opportunity to increase this level over the immediate and long term.

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ExpatriatesNationals

Not Engaged Nearly Engaged

28%

22%

25%

51%

57%

54%

21%21%21%

Engaged

Overall

Figure 8 The Engagement Opportunity

This chart depicts the spread of engagement across those employees who are ‘engaged’, ‘nearly engaged’ and ‘not engaged’. The data is based on the QuduratTM research study and depicts overall levels within the GCC and those

for Nationals and Expatriates

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Approximately 25% of employees in the region and specifically 28% of nationals are in the ‘nearly engaged’ group, implying that they could be motivated and inspired towards being more ‘engaged’ with appropriate focus and action. On the flip side, they could just as easily move to the other end of the spectrum into the ‘disengaged’ category. With an estimated 80 to 90 million people expected to enter the working population within the Arab world, and staying for longer periods of time, we cannot afford to have such mediocre levels of engagement. This directly impacts the output of the labour market, and thereby the economic success of the region.

There is a pressing need to tap into this opportunity as even incremental shifts in the level of engagement of employees can positively impact performance and productivity at an individual, organisational and macro perspective. Organisations need to significantly increase the effort they are willing to invest in the motivation and engagement of their employees. On the other side, we also believe that employees can do more in managing their own work expectations and taking more personal ownership for their commitment and performance to work. Finally, regional governments have a central role to play in shaping the incentives towards greater productivity shaped by their regulation of labour markets.

Actions towards Increasing Engagement

With a greater understanding of the existing state of employee engagement in the region, the key demographic groups that are most at risk, the possible causes for lower levels of engagement and the potential upside of increasing these levels, deliberate actions towards mitigating these challenges can be identified. If we are to truly benefit from the unique window of opportunity we face in the next decade, workers, employers and HR professionals in particular, must collaborate now to implement a new approach to employee engagement, motivation and productivity in the GCC.

Findings from the QuduratTM study establish that there are some distinctive factors which are highly correlated with engagement and significantly differentiate those employees that are highly engaged from everyone else. Organisations that wish to motivate their employees can clearly prioritise these factors in order to increase the reported levels of employee engagement.

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22

-19

Confidence in Leadership

Positive Relationships

and Sense of Team

19

-32

60%

Others at the Workplace Employees Attribution to Job Efforts of Organisation

46%

17

-26

Level of Support from

Manager

63%

17

-45

Pride in Work

57% 62%73%

Level of Trust

13

-29

81%

Physical Work

Environment

15

-25

66%68%

Figure 9 Drivers with Highest Positive and Negative Impact on Employee Engagement

OpportunityThreat

Current Satisfaction Score

19

-25

16

-30

Learning and Development

Fairness at Work

Meaning at Work

8

-36

Cur

rent

Eng

agem

ent a

t 54%

Ove

rall

Imp

act

on E

ngag

emen

t50

45

40

35

30

25

20

15

10

5

0

-5

-10

-15

-20

-25

-30

-35

-40

-45

-50

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Summing Up

What is most encouraging is that the above mentioned drivers of employee engagement seem to be core and consistent across national and expatriate talent, men and women and most importantly, across employees working in the public and private sectors. As policy makers in the GCC increasingly prioritise higher employment of nationals in the private sector to make the labour markets more competitive and reduce the burden on public sector spending, understanding these levers for motivating and retaining talent are essential. Most significantly, the private sector has a huge unexplored opportunity in differentiating its national talent attraction strategy. This goes well beyond the traditional focus on competing with the public sector on aspects such as increasing compensation levels, improving working hours and/or providing job security, all of which are currently perceived as the key attractors for nationals to work in the government sector.

The first set of factors is related to the employee in relation to others at the workplace. Engaged employees have a higher confidence in their most senior leadership, believe they are better supported by their managers and have strong positive relationships with their co-workers. In addition, the second set of factors relates to the employee’s attribution towards the job, wherein it is critical to derive a sense of meaning and pride from work and the organisation. Engaged employees also have a greater sense of perceived fairness at the workplace. Finally, the third set of factors are specific to the efforts of the organisation towards making the employee feel safe and comfortable within the physical work environment and providing visible opportunities for learning and development.

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The private and public sectors have distinct drivers

for increasing employee

engagement with an opportunity

to shift focus beyond just pay

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DN

A DNA of the Middle East Workplace

The financial crisis of 2008 and the events that have followed have fundamentally redefined the modern workplace globally, from both employee and employer perspectives. Employees have had to seriously revaluate aspects of their jobs which are most important and meaningful to them, realigning expectations based on an increased sense of uncertainty. With right-sizing, reduction in working hours and salary cuts common during this period, many employees throughout the world have either directly experienced a change in their contractual working conditions or have indirectly been impacted through their colleagues and family members. In turn, many employers have been compelled to re assess how to steer their organisations out of increasingly challenging market conditions and build a robust strategy for the future. Though the full impact of the global economic uncertainty will take time to resolve, what is clear is that the psychological contract at the workplace – the core beliefs, expectations and informal obligations of both the employer and employee, has changed in a significant way across the globe.

The recent financial, political and socio-cultural events across the

globe, including in the Middle East, are rapidly changing the world of work

Chapter 4

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Though the Middle East has been somewhat sheltered from the full force of the financial turmoil, it is witnessing its own renaissance in an economic, socio-cultural and political sense with the recent and ongoing experience of the ‘Arab Spring’ across the wider region. From a labour market perspective, whilst these changes are more subtle as compared to those resulting from a direct financial crisis, they are more seismic. They are also more potentially disruptive with a longer term impact on how the workplace of the GCC is managed in the future. Understanding the emerging needs and demands of employees is crucial for organisations if they want to continue to grow and deliver sustainable performance in the region. Employers need to consider the unique dynamics operating within these markets.

For example:•Anoverrelianceonpublicsectoremployment•Varying levelsofnationalandexpatriateparticipation levels within the private sector•An impetus on providing additional employment opportunities for women•Anever-increasingmandateofnationalisationtargets across most key industries•Notenoughlocaltalenttotakeonmorespecialisedor technical jobs to meet these targets

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This creates a continued cycle of dependence on temporary foreign workers to take on these jobs.

In these complex conditions, organisations need strong and transformational leaders at the helm, driving change and building future orientated strategies that balance the external market conditions with the needs of the organisation and its people. Organisations also need strong and transformational HR teams like never before. This is a big shift from the more transactional roles that most HR teams have been performing in the region. HR leaders need to create and deliver people strategy by redefining structures, policies, processes, systems and an overall culture, all of which are directly linked to delivering organisational performance.

In these complex conditions, organisations need strong

and transformational leadersat the helm

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Leaders Make the Difference

Findings from the QuduratTM study show that employee’s confidence in the most senior leadership within their organisations is low at 46%. This implies that a smaller minority of people believe that their senior leadership is making the right decisions in running the company and managing its employees. This lack of confidence in leadership is a definite concern, keeping in mind that this factor has the highest potential positive impact on increasing the level of employee engagement. Organisations need to closely examine whether their existing recruitment strategies are attracting the right type of leaders required in today’s circumstances and whether they are spending their training dollars wisely in developing their leaders effectively.

There are some interesting demographic themes with regards to confidence in leadership. Confidence in leadership is highest amongst those who have been in the organisation for less than 1 year, dipping suddenly thereafter. Those in middle management and supervisory roles have least confidence in leadership and it also falls as education levels increase. This understanding of key demographic groups that are most impacted could help organisations plan more targeted interventions to improve the current levels of confidence in leadership.

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Figure 1 Confidence in Leadership by Region

1 GCC average level of confidence in leadership is from the QuduratTM study. All other regional norms are based on Aon Hewitt’s employee engagement

studies across the globe covering 6,000+ organisations, surveying 6.5 million employees in 140 markets across 70 industries.

Confidence in leadership in organisations that are Best EmployersTM is 75%

Asia PacificNorth America

Latin America Africa

Europe

GCC1

60%

66% 57%

46%

47% 57%

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Initial indications from the QuduratTM study seem to suggest that employees have much higher expectations from their senior leaders as compared to many other parts of the world. Culturally, the region is a more collectivist and traditionally patriarchal society, with a dominant leader (or head patriarch) who is traditionally expected to look after the needs of people. There is also a very strongly defined hierarchy within social structures. These cultural norms seem to extend to the world of work and employees in the region, especially for national talent. They have a greater sense of entitlement in demanding more direct communication and oversight from the most senior leaders within the organisations. National employees also expect management to have increased levels of involvement while making decisions related directly to their span of work. The same extent of expectations do not hold true for expatriate workers, who prefer to communicate more directly with their managers and would like greater control over decision making when it comes to immediate work concerns.

Employees have much higher expectations from their senior leaders as compared to other

parts of the world

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Figure 2 Preference for Communication Source within the Organisation

“My CEO or Top Management”

“My Departmental Head”

28%32%* 31%

42%*38%

9%5% 7%

34%*

19%

31%

24%

“My Manager” “The Human ResourcesManager”

ExpatriatesNationals Overall

This chart depicts the responses of employees when asked from whom they would prefer to hear about important communication and changes

within the organisation.

* Denotes statistical significance at a confidence interval of 95%

For more information on responses from Male and Female respondents, Public and Private Sector respondents and respondents by Educational Qualifications,

please refer to ‘What Matters at Work’ charts on the back cover.

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Aon Hewitt’s findings outline a greater need for leaders to be more directly invested and committed to their employees. Leaders need to increase channels for genuine formal and informal communication. HR teams also must ensure that any people related projects, policies and practices should be actively supported by the organisational leadership in order to make an impact, as most employees have clearly indicated a preference to hear about changes or important communication from their leaders and managers. Most essentially, the sometimes unrealistic expectations of employees from their leaders need to be managed and aspects of communication and decision making should be cascaded to middle and supervisory management. This contributes both to strengthening a coaching culture and building an effective leadership pipeline at all levels within the hierarchy. Overtime this will reduce an excessive dependency on the highest ranks within the organisation.

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Figure 3 Preference for Management Involvement in Decision Making

Management Makes Decisions

42%*

28%

34%

58%

72%*

66%

Self Makes Decisions


This chart depicts the responses of employees when asked whether they would prefer their management to make decisions related directly to their span of work

versus making their own decisions.



please refer to ‘Detailed Preference’ charts on the back cover.

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Interestingly, though the differences between national talent and expatriate workers are fairly distinct in their preferences towards leadership, there are other areas aspects where all workers are remarkably similar. One of the most notable observations from the QuduratTM study was the overwhelming preference of both local talent and foreign workers towards formal and hierarchical organisational structures. Counter intuitively, there were no major differences in the responses to this question even by the younger cohorts of employees, reflecting a clear preference for a more conventional, formal style of working cutting across all nationalities and generations. This is in stark contrast to some other parts of the world where more individuals, and indeed organisations, are demanding more flexible, informal structures, with greater empowerment and concepts such as telecommuting and virtual teams gaining prevalence.

There is a general prevalence of a fear

culture, particularly amongst expatriate

workers of getting penalised for making mistakes, versus using them as learning opportunities

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Figure 4 Preference for Formal Structures and Hierarchies

Formal Structures

81%83% 82%

18%19%

17%

Informal Structures


This chart depicts the responses of employees when asked whether they would prefer more formal, hierarchical organisational structures and roles versus

greater flexibility and informality.



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In support of the notable preference for formal structures, the QuduratTM study also points to the fact that a majority of employees would choose security and stability from their organisations over greater freedom to work their own way. We also find that nationals report higher levels of trust at the workplace as compared to expatriate workers (75% versus 63% respectively). There is a general prevalence of a fear culture, particularly amongst expatriate workers, of getting penalised for making mistakes, versus using them as learning opportunities. This implies that employees would hesitate to raise a concern if they saw their managers, co-workers or leaders making a mistake and/or doing something wrong within the organisation. As we aim to create more progressive, productive and creative workplaces in the Middle East, organisations should aim to build cultures that promote a sense of security allowing for greater freedom of personal expression and innovation for employees.

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Figure 5 Preference for Security and Stability

Security & Stability

27%*

23%25%

Freedom to Work

73%

77%*

75%


This chart depicts the responses of employees when asked whether they would prefer more security and stability at work versus greater freedom to

work their own way.




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Other People Matter

One of the key highlights is that employees draw tremendous strength and support from their co-workers and this significantly contributes to their positive attitude, motivation and performance at work. Almost 70% of employees believe that relationships with their co-workers increase their likelihood of staying within their organisation and 93% will support their team members no matter what. Findings from the QuduratTM study clearly indicate that any reported decline in the positive perceptions of teams and co-workers will negatively impact employee engagement and performance levels. Organisations must ensure that these work relationships are maintained and reinforced wherever possible.

We also found that certain managerial styles directly impact the morale and performance of their followers. These managerial attributes seem to be universal amongst local talent as well as foreign workers, to varying degrees.

60

Not Engaged Not Engaged Not EngagedEngaged Engaged Engaged

Managers whoFocus in Strengths

(versus Weaknesses)

Managers whoTend to Communicate How Things are Going Right (versus Wrong)

Employees

Managers whoProactively Try to

Improve the Department

Figure 6 Managerial Styles that Differentiate Engaged Employees from those who are Not Engaged

50%

41%

90%*88%*

67%

59%

68%*

80%*

66%* 69%*

56%53%

ExpatriatesNationals


61

Making Choices: Other Important Workplace Preferences

In keeping with Aon Hewitt’s findings towards preference for formally defined hierarchies, data from the QuduratTM study highlights that artefacts of organisational status are particularly important for national employees in the GCC. Most nationals place greater importance on their formal position and title as this seems to be socially important. Also, when given the choice between having a good work life balance or achieving a high level managerial position, most employees prefer the former. Nonetheless, a greater percentage of nationals still placed higher importance on advancing to more senior managerial roles. It becomes apparent that aspects such as role, position, title, career advancement and other phatic symbols of working life have a hugely significant role to play to attract and retain national talent. Organisations have an unusual opportunity to leverage these factors to manage and motivate employees without having to focus only on traditional compensation structures as the chief driver. However, utmost consideration must be provided to ensure that the competence and quality of talent required is not compromised in order to attain these artefacts of status.

Figure 7 Importance Attached to Position and Title

77%*

59%

67%

Importance of Position and Title



62

Figure 8 Importance Attached to Balancing Needs of Work and Personal Life

Balancing the Needs of Work and Personal Life

28%*

12%

19%

Achieving a High-Level Managerial Position

72%

88%*

81%


This chart depicts the responses of employees when asked whether they would prefer balancing the needs of work and personal life versus achieving a higher

level managerial position.




63

Finally, the QuduratTM study also establishes that though pay and benefits are an important aspect of an employees approach to work, other characteristics are equally and often more important. When given the option of choosing more interesting and meaningful work or better pay and benefits, the responses from employees were almost equally split. Interestingly, the responses didn’t vary greatly by level or seniority within the organisation.

Figure 9 Importance Attached to Pay and Benefits at Work

Better Pay and Benefitsat Work

47% 47% 47%

More interesting and Meaningful Work

53% 53% 53%


This chart depicts the responses of employees when asked whether they would prefer better pay and benefits at work versus more interesting

and meaningful work.



64

Other HR aspects that employee’s rank as most important and where they are currently least satisfied, include career growth, learning and development, clear and fair HR policies, recognition, employees being treated well and their own position and title.

65

Figure 10 What Matters Most at Work

GCC Nationals %

Career Growth

Learning and Developement

Pay and Benefits

Clear and Fair HR Policies

Recognition

Employees Treated Well

Position and Title

Inspirational Senior Leadership

Work Life Balance

Effective Communication

Safety

Meaningful Work

Pride in Company

Alignment with Personal Values

Relationship with Co-Workers

Multi-Cultural Environment

48

45

38

31

28

0

39

39

38

23

46

44

35

28

24

20

15

11

11

5

0

39

33

21

7

13

27

12

11

7

6

2

This chart depicts the responses of employees when asked to rate and rank the most important HR drivers related to their work.

Expatriates %

Career Growth

Learning and Developement

Pay and Benefits

Clear and Fair HR Policies

Recognition

Employees Treated Well

Position and Title

Inspirational Senior Leadership

Work Life Balance

Effective Communication

Safety

Meaningful Work

Pride in Company

Alignment with Personal Values

Relationship with Co-Workers

Multi-Cultural Environment

66

Summing Up

In sum, Aon Hewitt’s research indicates that GCC worker’s attitudes and orientation to the workplace are developing rapidly against the backdrop of a social, economic and demographic landscape that is experiencing its own changes. The challenge for employees, employers, their HR professionals and policy makers is to manage this migration in an inclusive and innovative manner to provide a transition to the new GCC workplace of the decade ahead. Mutual expectations from the workplace will need to be managed realistically and with the confidence required to develop an approach to people practices which is distinctive to the region in order to meet its unique people challenges. A genuinely regional approach to talent management will need to emerge as a development from the current over reliance on importing talent and talent practices exclusively from elsewhere.

67

Con

clus

ion We have seen that the engagement and advancement

of national talent is without doubt the biggest HR issue in the region, if not the single biggest business issue facing the GCC at present. The development of national talent has been a priority for decades and many successes have been achieved. However, the existing structure of local labour markets and their impact on the incentives to employers and workers to fully exploit their endowments of talent, along with the orientation and preferences to the workplace expressed in Aon Hewitt’s QuduratTM research, means there is an enormous pool of human capital within our grasp over the next decade. It is a paradox of plenty that the GCC has not exploited this potential further to date.

We believe the region is uniquely placed in the world to do so in the next decades. The population growth of China is already stabilising and that of India is expected to follow suit. Other regions of the world which have predicted similar proportions of population growth (in particular Africa and Latin America) do not have the proportional financial means to fully develop their growing human resources. Whilst those with the financial resources (in the more mature economies) do not have the requisite population growth.

If we can effectively harness this potential it will revolutionise the talent landscape in the first half of the 21st century in no less a way than the development of the productive potential of fossil fuel reserves, which lay underground for millennia and transformed the region’s economies and societies in the second half of the 20th century.

To reap the latent potential of the demographic surplus available

across the GCC, we need nothing short of a revolution in how we

understand and execute human capital strategies

Chapter 5

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69

More specifically, Aon Hewitt’s QuduratTM research insights indicate that

Employers need to more effectively leverage the strengths towards team working, pride in work and orientation to the customer which exist amongst the region’s workforce. Organisations in many other parts of the world would feel fortunate to have such a wealth of strengths amongst their workforce. This represents a major comparative advantage of the GCC which can be exploited more fully to develop a truly regional approach to people management. Not only does the region disproportionately rely on importing talent resources from elsewhere in the world, it also relies on importing talent practices from elsewhere. With greater confidence, we believe HR professionals across the GCC can develop innovative and truly regional, indigenous approaches to talent management.

Organisations and educational institutions need to focus on developing the human capital, and more specifically the psychological capital (resilience, optimism, self efficacy), to match the investment and advancements made in the region’s physical and financial infrastructure. Overall economic development and organisational growth rates in the region are amongst the highest in the world. These achievements will only prove to be sustainable when the human and psychological capital is developed in equal measure.

Key constituencies within the local workforce, young people, mid career professionals, women, those with most qualifications and expatriates all have differential drivers for their workplace engagement. Aon Hewitt’s research has indicated the key differential triggers for firing maximal motivation and peak productivity. This knowledge provides a clear opportunity for HR professionals to adapt and develop their employer brand positioning to ensure they are speaking the right language to the right constituency. In our view, this is most urgent and will have a disproportionately positive impact on organisational performance if youth, women and those workers with most educational attainments become more effectively engaged in the workplace.

70

Mutual expectations between employers and employees in the workplace need to be more effectively expressed. The expectations of workers entering labour markets are unsustainable and organisational communication practices and performance management processes are not effective enough in highlighting and rewarding the achievements required. Greater differentiation of reward and recognition for high performers is the only way that these expectations can be satisfied and a new psychological contract needs to be developed in the region in order to break the sense of entitlement and diminish ‘wasta-cracy’ in favour of a greater meritocracy.

The public sector is saturated in terms of employment and career opportunities available to GCC nationals. The private sector needs to leverage its differential advantages over the public sector. Our study demonstrates the drivers for attracting, retaining and engaging GCC nationals in the private sector are unique and can be emphasised in recruitment and development campaigns in order to increase their positive impact. Moreover, entrepreneurialism, trade and technical professions need to enhance their status amongst GCC national students and job seekers, as these sectors are likely to offer the biggest opportunity for employment growth in the future. Educational programmes, and in particular vocational training, must be developed to support the realisation of this opportunity.

It is almost a decade since the original UNDP Arab Human Development Report in 200232. It set the agenda for reform in the region by highlighting 3 priorities for development: political openness, educational reform and greater integration of women in all aspects of public life, especially the workplace. Clearly a number of advances in all of these areas have already been accomplished. Whilst the future is always uncertain, it is equally clear that the next decade will see even more rapid progress in all of these areas, having a seismic impact on the GCC workplace.

We are at a turning point in the development of the GCC and the success we achieve over the next decade in close collaboration amongst all stakeholders to harness the latent productive potential available will be critical in determining the talent landscape of the future. One thing is clear, this will be dramatically different to the current approach and the insights and understanding to manage this revolutionary transition will be instrumental in ensuring we reap the demographic dividend available to the region in the next decade.

Its absolutely essential that human and

psychological capital is developed in equal measure

to match investment in the GCC’s phsycical and

financial infrastructure

71

Qud

urat

TM R

esea

rch

Des

ign QuduratTM is Aon Hewitt’s pioneering research study

focused on understanding what drives and motivates talent in the region, with an emphasis on understanding national talent. The study is the first and largest of its kind representing the voice of 4600 employees across 5 countries and 40 organisations. Qudurat’sTM

research design is based on Aon Hewitt’s expertise in the area of HR Consulting and is grounded in the latest organisational behaviour and psychological theory. The study was conducted in partnership with a researcher from Stanford University’s Graduate School of Business to better appreciate the factors that impact employee engagement and performance at the workplace.

The research focuses on variables that are ‘state-like’, changeable and trainable through specific organisational and HR interventions. The approach throughout the study has been appreciative and positive, in understanding the unique strengths and aspirations of talent in the GCC, versus taking a more traditional deficit or gap focused approach.

The QuduratTM research initiative has been fully funded by Aon Hewitt, and there were no financial implications or costs associated for any organisation or partner to participate in the study.

Chapter 6

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73

The questionnaire was created based on the research design and an extensive cross disciplinary review of literature.

The research design is based on five broad dimensions:

IndividualStrengths andCapabilities(Grit, Zest,

Goal-Setting,Optimism,

Pro-activity,Resilience,Teamwork)

Motivation(Intrinsic/Extrinsic)

Relationships with Peers/

Co-Workers/Managers

Physical Work

Environment

Relationships with Customers/

ExternalStakeholders

OrganisationalCulture

Individual’s Definition of

Identity:

FamilyWork

NationalityEthnicity

Diversity and Trust

OrganisationalStructures

Job Orientation(Job, Career,

Calling)

Values (Organisational/

Personal)

Social Perception to Work

(Status, Respect, Heirarchy)

Other HR Drivers (Compensation,

Benifits, Learning & Development)

Orientationto Self

Orientationto Work

Orientationto Others

WorkEnvironment Identity

74

1. Orientation to Self: This dimension focuses on understanding the personal attributes and psychological strengths of employees at the workplace, such as level of teamwork, goal-setting, pro-activity, grit, resilience within individuals.

2. Orientation to Work: This dimension focuses on understanding employee attitudes and preferences towards work. It probes on the relative importance and satisfaction of various HR drivers at work as well as looks into how employees perceive their work.

3. Orientation to Others: This dimension focuses on relationships and attitudes towards others at work – peers, managers, leaders, customers and so on. It also probes on aspects of diversity, fairness and trust at the workplace.

4. Work Environment: This dimension seeks to understand the work environment and levels of satisfaction with the same, in terms of the work culture, organisational structure and physical work environment.

5. Identity: The fifth dimension seeks to understand how other aspects such as family, work identity, cultural identity etc. impact perceptions and decisions related to work.

Salient features of the survey questionnaire: • The survey questionnaire included a total of 92 questions, including 19 demographic questions •Thesurveyquestionnairewasdesignedinsuchaway that most ‘drivers’ were measured by a minimum of two questions or more•Toensureeaseofcompletion,mostofthequestions were either forced choice, drop-down options or on a 6-point scale (e.g. ranging from strongly agree to strongly disagree)

Data collection process:• The survey was administered to a cross-section of employees from participating organisations, from the government, semi-government and private sector from July - October 2010• The surveywas administered online in both English and Arabic and the average time taken to complete the survey was 20 to 25 minutes•TheArabicquestionnairewasfirsttranslatedandthen reverse translated to ensure accuracy and quality of the translation•Thesurveyquestionswerevettedbyexternalexperts keeping in mind the socio-cultural aspects•TheonlinesurveywashostedonAonHewitt’ssurvey platform to protect the confidentiality of individual respondent data.

75

Survey Sample and Coverage Nationality Participation Count

Total

Total 4599

Nationals 2018

Expats 2581

Nationality

GCC Nationals Total 2018

Other Arabs Total 514

Indian Subcontinent Total 856

Expats from other Asian Countries Total 502

Expats from North America Total 134

Expats from South America Total 9

Expats from Western Europe Total 202

Expats from Eastern Europe Total 16

Expats from North Africa Total 27

Expats from Sub-Saharan Africa Total 84

Other Expats Total 237

Gender

Male

Total 2721

Nationals 1018

Expats 1703

Female

Total 1878

Nationals 1000

Expats 878

Industry

Government

Total 1037

Nationals 867

Expats 170

Semi-Government

Total 2922

Nationals 622

Expats 2300

Private

Total 640

Nationals 529

Expats 111

Role with the Organisation

Top Management

Total 34

Nationals 21

Expats 13

Senior Management

Total 188

Nationals 84

Expats 104

Middle Management

Total 497

Nationals 241

Expats 256

Team Leader/Supervisor

Total 776

Nationals 312

Expats 464

Professional Employee (not a Manager)

Total 1776

Nationals 585

Expats 1191

76

Survey Sample and Coverage Nationality Participation Count

Role with the Organisation

Team Member/Front-Line Employee

Total 1248

Nationals 697

Expats 551

Intern (including student interns)Total 80

Nationals 78

Age

Under 25

Total 360

Nationals 343

Expats 17

25-34

Total 1452

Nationals 975

Expats 477

35-44

Total 1409

Nationals 418

Expats 991

45-54

Total 996

Nationals 236

Expats 760

55 and above

Total 382

Nationals 46

Expats 336

Highest Educational Qualification

Primary SchoolTotal 37

Nationals 37

Secondary School

Total 550

Nationals 488

Expats 62

Vocational or Technical Diploma

Total 742

Nationals 372

Expats 370

Bachelors Degree

Total 2194

Nationals 831

Expats 1363

Masters Degree

Total 786

Nationals 216

Expats 570

PhD

Total 107

Nationals 14

Expats 93

Other

Total 183

Nationals 60

Expats 123

Expats 121

Expats 426

77

• AFP (Agence France Presse) “Foreign Worker Remittances from Saudi Soaring”. 17 October 2009•BoozandCo,MeetingtheEmploymentChallengein the GCC: The Need for a Holistic Strategy, 2010• Economist Intelligence Unit, The GCC in 2020: Resources for the future: A report from the EIU (2010). Sponsored by the Qatar Financial Centre Authority•GulfNews• IFCWorld Bank Group, Education for Employment: Realizing Arab Youth Potential, 2011• InternationalLabourOrganisation,GlobalEmployment Trends for Women, Geneva, 2007• International Labour Organisation, Growth, Employment and Decent work in the Arab region: Key Policy Issues. Arab Employment Forum, 2009• InternationalLabourOrganisation,GlobalEmployment Trends, 2011• International Labour Organisation, Key Indicators of Labour Market, 2010• InternationalMonetaryFund,WEO,2010• International Monetary Fund, Regional Economic Outlook, Middle East and Central Asia, April 2011

• International Council on Security and Development. Unemployed Youth in the UAE, Personal Perceptions and Recommendations (June 2010)•McKinseyQuarterly,LinkingJobsandEducationinthe Arab World, April 2011 •MiddleEastYouthInitiative,MissedbytheBoom,Hurt by the Bust: Making Markets Work for Young People in the Middle East: An Agenda for Policy Reform and Greater Regional Co-operation, 2010•Park, Nansook, Peterson, Christopher, & Seligman, Martin E. P. (2006). Character strengths in fifty-four nations and the fifty us states. The Journal of Positive Psychology, 1(3), 118-129•Parker, Sharon K. (1998). Enhancing role breadth self-efficacy: the roles of job enrichment and other organisational interventions. Journal of Applied Psychology, 83(6), 835-852•Peterson, C. & Seligman, M. (2004). Character strengths and virtues: A handbook and classification. Oxford: Oxford University Press•Reivich,K,&Shatt,A. (2002).TheResilienceFactor: 7 Keys to Finding Your Inner Strength and Overcoming Life’s Hurdles. New York: Broadway Books

Chapter 7

Ref

eren

ces

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• RestrictiveLabourImmigrationPoliciesintheOil-Rich Gulf: Effectiveness and Implications for Sending Asian Countries** Nasra M. Shah** UN/POP/EGM/2006/03, May 2006• Scheier, Michael F., & Carver, Charles S. (1985). Optimism, coping, and health:. Health Psychology, 4(3), 219-247• Snyder,C.R.,Sympson,SusieC.,Ybasco,Florence C., Borders, Tyrone F., Higgins Raymond L., & Babyak, Michael A. (1996). Development and validation of the state hope scale. Journal of Personality and Social Psychology, 70(2), 321-335• TheWorldBank,TheRoadNotTravelled:Education Reform in the Middle East and North Africa, Washington DC, World Bank, 2008 • UNDP,ADHRPopulationLevels,TrendsandPolicies in the Arab Region: Challenges and Opportunities, Barry Mirkin, 2010• UNDP, AHDR Job Creation in the Arab Economies: Navigating Through Difficult Waters: Jad Chaaban 2010• UNDP,ArabHumanDevelopmentReport(ADHR),2002

•WorldBankMiddleEastandNorthAfrica,JobCreation in a High Growth Environment: The MENA Region (2007), Working Paper Series No. 49 Nabli, Mustapha K., Silva-Jauregui, Carlos, de Silva, Sara Johansson.•World Bank, Middle East and North Africa, Annual Report 2004, Washington D.C.•Wrzesniewski, A., &Dutton, J. E. (2001).Crafting a job: Revisioning employees as active crafters of their work. Academy of Management Review, 26(2), 179-201•Wrzesniewski,A.,Dutton,J.E.,&Debebe,G.(2003). Interpersonal sense making and the meaning of work. Research in Organisational Behavior, 25, 93-135•www.goinglobal.com•Yousef, A.D. (2000). Organisational commitment and job satisfaction as predictors of attitudes toward organisational change in a non-western setting. Personnel Review. 29(5), 567

79

1 UNDP, ADHR Population Levels, Trends and Policies in the Arab Region: Challenges and Opportunities, Barry Mirkin, 2010

2 The Cooperation Council for the Arab States of the Gulf, also known as the Gulf Cooperation Council (GCC), is a political and economic union of the Arab states bordering the Persian Gulf and constituting the Arabian Peninsula, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates

3 National talent or local talent refers to the citizens of the GCC countries, namely Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and United Arab Emirates, who live and work in their home countries. Similarly, foreign workers or expatriate talent refers to immigrant workers who are living and working in the GCC, but are not citizens of these countries

4 World Bank, Middle East and North Africa, Annual Report 2004, Washington D.C.

5 McKinsey Quarterly, Linking Jobs and Education in the Arab World, April 2011 (Original Source – Global Insight)

6 International Labour Organisation, Global Employment Trends, 2011

7 Economist Intelligence Unit, The GCC in 2020: Resources for the future: A report from the EIU (2010). Sponsored by the Qatar Financial Centre Authority


9 IFC World Bank Group, Education for Employment: Realizing Arab Youth Potential, 2011

10 According to the IFC World Bank Group, Education for Employment: Realizing Arab Youth Potential, 2011, creating the required number of jobs required will not be easy: • Just to maintain current average unemployment rates will require the region to create 35-40 million extra jobs • To reduce unemployment rates to the global average (currently 6.2 percent, across all age brackets) would, in addition to this, require it to create 10-15 million jobs • If we were to assume the region intends to reduce unemployment rates to around 6 percent and at the same time approach world average work force participation rates, this would require it to create yet another 40-45 million jobs • In other words, if the Arab World wishes to achieve the global unemployment rate (at the global average workforce participation level), this will demand that it create more than 85 million jobs over the next ten years

Chapter 8

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ssar

y an

d N

otes

80

World Bank Middle East and North Africa, Job Creation in a High Growth Environment: The MENA Region (2007), Working Paper Series No. 49 Nabli, Mustapha K., Silva-Jauregui, Carlos, de Silva, Sara Johansson

11 Booz and Co, Meeting the Employment Challenge in the GCC: The Need for a Holistic Strategy, 2010

12 International Council on Security and Development. Unemployed Youth in the UAE, Personal Perceptions and Recommendations (June 2010)

13 In the region, the dividing line between what is public and what is private is sometimes not very clearly defined. For the purpose of this study – public sector typically refers to government or public sector organisations, such as Federal Authorities, Ministries etc. Semi-government would refer to organisations that have a large state ownership but fall within the private sector and private sector organisations would refer to MNC’s, family owned businesses and other organisations with no state ownership


15 Rent seeking behaviour – in labour markets, the economic rent is the value of the wages earned over and above that necessary to keep workers in their current employment

16 UNDP, ADHR Population Levels, Trends and Policies in the Arab Region: Challenges and Opportunities, Barry Mirkin, 2010 and Restrictive Labour Immigration Policies

in the Oil-Rich Gulf: Effectiveness and Implications for Sending Asian Countries** Nasra M. Shah** UN/POP/EGM/2006/03, May 2006

17 AFP (Agence France Presse) “Foreign Worker Remittances from Saudi Soaring”, 17 October 2009

18 Middle East Youth Initiative, Missed by the Boom, Hurt by the Bust: Making Markets Work for Young People in the Middle East: An Agenda for Policy Reform and Greater Regional Co-operation, 2010

19 The World Bank, The Road Not Travelled: Education Reform in the Middle East and North Africa, Washington DC, World Bank, 2008 and International Labour Organisation, Global Employment Trends for Women, Geneva, 2007

20 International Labour Organisation, Growth, Employment and Decent work in the Arab region: Key Policy Issues. Arab Employment Forum, 2009

21 International Monetary Fund, Regional Economic Outlook, Middle East and Central Asia, April 2011

22 Aon Hewitt’s UAE Banking Forum 2011 (19 participating national and international banks)

23 An engaged employee can be defined as one who is truly committed, emotionally and intellectually to an organisation. Aon Hewitt’s proprietary engagement model measures engagement based on whether employees speak positively about the organisation to others (say), have an intense desire to be part of the organisation (stay) and are willing to exert discretionary effort (strive) to contribute to its overall success

24 International Monetary Fund, Regional Economic Outlook, Middle East and Central Asia, April 2011

25 Middle East Youth Initiative, Missed by the Boom, Hurt by the Bust: Making Markets Work for Young People in the Middle East: An Agenda for Policy Reform and Greater Regional Co-operation, 2010 and International Monetary Fund, Regional Economic Outlook, Middle East and Central Asia, April 2011

26 UNDP, AHDR Job Creation in the Arab Economies: Navigating Through Difficult Waters: Jad Chaaban 2010

27 According to the World Bank Group, Education for Employment: Realizing Arab Youth Potential, 2011 report, the Middle East region today has the highest youth unemployment rate in the world, currently recorded at over 25 percent, having recently overtaken North Africa, which has a rate a little under 24 percent

28 and 29 International Labour Organisation, Key Indicators of Labour Market, 2010

30 Booz and Co, Meeting the Employment Challenge in the GCC: The Need for a Holistic Strategy, 2010

31 International Labour Organisation, Key Indicators of Labour Market, 2010 and International Labour Organisation, Global Employment Trends for Women, Geneva, 2007

32 UNDP, Arab Human Development Report (ADHR), 2002

81

Ack

now

ledg

men

ts Aon Hewitt’s QuduratTM research project has been a tremendous collaborative effort from all stakeholders involved in the study, whose active support and participation is much appreciated. We would like to particularly thank and acknowledge the following individuals (in no particular order)

Our Research AdvisorNicholas Hall from Stanford University, who is part of the founding team on QuduratTM and has played a central role in the conceptualisation, design and execution of the study

Sofiane SahraouiReem Al KhalifaFaisal Al ShaikhAmal Ishaq Kooheji Mohamed Hamad Al Hameli Ian TaylorWissam HachemBassam BarakatJoseph Abou RousShahnawaz KhanAsma Eldroubi

Azrina Hassan Maryam Nasser Al-KaabiPeter Rowland LittleMarkus Wiesner Amanda EdmundsElias Dib Maha ZaatariLeila El HageSushil Bhasin Rupesh KhareDimple KaloyaGauri GuptaSamir SikriDivyaj KambojMukti AnandPrasanjit SarkarJohn ‘Sean’ DoyleDebabrat MishraVivek Chachra

Creative team at InsigniaGaurav Sinha, Manav Fernandez,Radhika Mazumdar and Nisrine Daou

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All Participating Organisations1. Al Ain Hospital, UAE2. Al Rahba Hospital, UAE3. Al Tayer Group, UAE4. Bahrain Electricity & Water Authority, Bahrain5. Bahrain Institute of Public Administration, Bahrain6. Bahrain TV, Bahrain7. Capital Governorate, Bahrain8. Central Informatics Organisation, Bahrain9. Civil Aviation Affairs, Bahrain10. Civil Services Bureau, Bahrain11. Corniche Hospital, UAE12. Crown Prince Court, Bahrain13. Economic Development Board, Bahrain14. Electronic Government Authority, Bahrain15. Emirates Post Holding Group, UAE16. Etihad Airlines, UAE17. General Organisation for Social Insurance, Bahrain18. Isa Cultural Centre, Bahrain19. Labor Market Regulatory Authority, Bahrain20. Landmark Group, UAE

21. Ministry of Culture & Information, Bahrain22. Ministry of Education, Bahrain23. Ministry of Finance, Bahrain24. Ministry of Foreign Affairs, Bahrain25. Ministry of Industry and Commerce, Bahrain26. Ministry of Municipalities & Agriculture, Bahrain27. Ministry of Transport, Bahrain28. Ministry of Works, Bahrain29. National Audit Court, Bahrain30. National Oil and Gas Authority, Bahrain31. Qatar Petroleum, Qatar32. Ras Gas, Qatar33. Roads and Transport Authority, UAE34. Royal Charity Organisation, Bahrain35. SEHA Corporate Office, UAE36. Sheikh Khalifa Medical City, UAE37. Southern Governorate, Bahrain38. Standard Chartered Bank, UAE39. Tawam Hospital, UAE40. Tenderboard, Bahrain

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QUDURAT - Health | Aon · regional operations are headquartered in the UAE. We work in 11+ countries across the region, ... Implying ‘capabilities’ in Arabic, QuduratTM is the