Pay Gulf Nationals more than expats experts

Hiring Gulf citizens at a salary higher than what expats are paid for the same job is boosting their numbers in the private sector, especially in white-collar jobs, and makes sense, human resource experts say.

Adding a national allowance to the salary of citizens working in the private sector makes the jobs more lucrative and will help countries in the long run as they diversify their economies away from hydrocarbons, experts gathered in Dubai this week for a Gulf Cooperation Council (GCC) nationalisation forum said.

“This is not a charity. This is not social corporate responsibility,” Fahad al-Hassawi, chief human resources officer of UAE telecoms firm Du, told Maktoob News.

“It makes sense when you recruit UAE nationals. They add value, they are productive in the long run and they have a lot to contribute to the organisation.”

One out of every five employees at Du, majority owned by the government, is an Emirati.

“Some Emiratis get paid more,” he said. “Yes, we cost more ... But we look at this as an investment into the future.”

AbdulRahman Sami Saqr, head of Emiratisation at Lloyds’ UAE operations, said that the bank pays Emiratis, on average, 35 percent of their basic salary as a national allowance. About 110 of 300 Lloyds UAE employees are locals.

“But we give (Emiratis) less (of other) allowances like travel allowance, home allowance. And we cost the business less in terms of visas and application costs. So if you compare, it will be a very, very close number to expatriates.”

Millions of expats work in Gulf countries, most of them in the private sector. Governments in the region, flush with oil money, have historically supported their citizens.

But they have been pushing nationals for years to get more jobs in the private sector as the realisation strengthens that oil money will not last forever.

In addition, the erosion of national identity and language due to the large number of expatriates is also prompting nationals to increase their presence in the workforce.

Kanchan Ghoshal, director of consultancy KPMG’s human resources advisory team, told Maktoob News: “Government initiatives are required. From a business point of view, the government has to support a lot of this.”

Ghoshal, who has worked in many GCC countries, said it makes long-term sense to, for example, hire a national at 500 Bahraini dinars ($1,322) versus offering the same job to an expat for 300 dinars.

“But the aim needs to be to get that national to a 500-dinar level in a short period of time with training, motivation, whatever it takes,” Ghoshal said.

“So either you incentivise them by giving them some financial help, or you need to incentivise for the private sector with say giving private companies that are properly nationalised more government contracts.”

Less than 1 percent of the workforce in the UAE and Qatar is comprised of citizens.

A study conducted by government-sponsored Emirates National Development Programme (ENDP) last year found that three out of five Emiratis resign from corporate positions due to a lack of career progression and the absence of a mentoring culture.

Both Saqr and Hassawi said hiring nationals, even if it does not make financial sense in the short-term, is a good long-term strategy because they know how their countries work and unlike expats will stay at home.

A study released in December by a professor at UAE University found that hiring Emiratis in the private sector makes sense because they are better at navigating bureaucracy, have contacts in government and are more proficient at interpreting the country's changing labour laws.

The UAE’s labour minister said earlier this year the government had drafted a bill to offer nationals the same privileges in the private sector that they enjoy in government jobs.

Saqr Ghobash told a newspaper that “the more privileges the private sector offers, the greater the chances of achieving a higher Emiratisation percentage”.

Experts at the conference agreed that governments will have to finance these privileges as it does not make sense for private firms to do so.

At the same time, however, they stressed that attitudes about nationals and their work ethic also need to change for them to be able to hold jobs in the private sector.

“Emiratis are really not that different,’ Du’s Hassawi said, adding that the “wrong mindset” that has stereotyped Gulf citizens as unproductive and unmotivated workers has to change.

While some economists say it will be next to impossible to get Gulf citizens to work in service jobs that have traditionally been held by low-paid Asian workers, Lloyd’s Saqr said “impossible is an opinion”.

Saqr added: ‘The biggest challenge is to get companies, line managers, everybody involved, and do it properly. It is all about perception.” Originally published by Maktoob Business.

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