2008 White Papers
Growth in the Middle East and HR Capabilities
EXECUTIVE SUMMARY: PAPER ABSTRACTS
Localization / Nationalization in the GCC: Meeting the Challenge Replacing foreign workers with local national workers ("Localization/Nationalization") is an issue that presents great challenges for countries to replace foreign workers and create desirable jobs for their populaces, but also offers opportunity to foreign firms to make headway into a group of countries that have some of the highest economic growth rates on earth. This paper discusses the current state of localization in the GCC and discusses best practices for success from companies based in the GCC and outside. First, government motivations behind localization are discussed and the challenges that it presents to firms operating in the region are presented. Second, the argument that success with localization comes out of a long-run set of recruitment and retention strategies that are grounded in established global standards (with adjustments for local conditions) and display a long-term commitment to be partners in development of GCC countries and their people is presented. Finally, the various elements that could shape the future of localization and how firms can consider preparing for them are discussed.
Free Trade Zones: The Development of Economic Clusters in the GCC
Free Trade Zones offer lower the cost for foreign firms of operating in the GCC and are clusters of economic activities that help the nations of the GCC gain competitive advantages and prosperity. This paper discusses how Free Trade Zones (FTZs) have developed in the GCC and where they seem to be heading, focusing on the implications on labor markets. The economic cluster theory popularized by Harvard Business School Professor Michael Porter and others is used to show how developing economic clusters successfully are a way that countries can gain prosperity and sustained competitive advantage. Economic cluster development is examined in the United Arab Emirates, Qatar, Saudi Arabia, and Bahrain to see how the current state came about and what might be in store in the future. By examining economic cluster history and trends, managers may make more informed decisions about working in free trade zones in the region.
Culture and Organizations: Assimilating Values, Religion and Language in the Arab Gulf Region
The Arab Gulf region is often misunderstood when it comes to understanding the business practices. One reason may be that most methods of observation and reporting have been developed in the West and are not necessarily applicable to the Arab Gulf region. Work ethics, social structures, and language were perceived to be the prominent factors that are relatively similar across the region, as well as having a significant impact on business operations. This paper examines the region's attitudes to work, the role of Islam in the workplace and its implications on organizational development, the importance of networking and relationships, and the role of language and culture in training to help organizations leverage their business operations. It seeks to provide a practical explanation of these themes and examines ways in which organizations can leverage the knowledge. It concludes with a discussion on how organizations can assist expatriates in assimilating themselves to a culturally unique part of the world.
Women in the Middle East: Participation in the Private Sector
While there has been significant improvement in the participation rates of women in the labor force, the region still continues to lag when figures are compared globally. The costs of lowered participation range from losing the investments made in education and a lowered GDP and per capita income, to a much smaller talent pool and forced reliance on foreign workers. This paper first examines the causes of low participation levels of women in the region and the methods that companies are using to promote themselves as an employer of choice for women. In addition, issues faced by women entrepreneurs and the areas that they would like assistance in their economic ventures are discussed. The paper concludes with a discussion on some possible initiatives that would provide encouragement to participate in the labor force from Arab women, and support as they continue and develop in their professional endeavors.
Introduction: Talent Management Strategies for Growth
Talent management encompasses a broad spectrum of initiatives designed to attract prospective employees to an organization, develop workforce capabilities, gain employee engagement and commitment, increase retention of high-performing individuals and build a plan for future succession. Talent management is critically important to companies operating in the Middle East because of the substantial opportunities and challenges these organizations face today. With the challenge of attracting and retaining qualified and affordable talent in the Middle East so daunting, employers in the region must do everything they can to cultivate a powerful, persuasive reputation for talent management. This short paper serves as an introduction to the following three papers, which were originally written for the 2006 CAHRS Spring Sponsor meeting, The Talent Management Challenge, and have been updated here to include "Focus on the Middle East" sections that specifically address the region's utilization of and challenges regarding talent management initiatives.
Employment Brand: The Core of the Employment Relationship
The modern employment paradigm has been shaped by three interconnected phenomena: demographic changes, attitudes toward employment and outsourcing of low value-added work. As a result of these structural changes, employers (and specifically the human resource function) must excel at securing the organizational capability necessary to execute their strategic agendas. This paper will address what research has found to be a consistent answer to that challenge – a compelling employment brand. Additionally, this paper concludes with a focus on employment branding initiatives in the Middle East, including specific practices at Emirates, HSBC and PepsiCo.
Succession Planning and Identifying High Potential Talent
The potential labor shortage of skilled workers and the creation of a more complex and diverse employment profile forces companies to try to insulate themselves from the "war for talent" by identifying and developing next generations of leaders. The upcoming challenge is how to effectively address the issues of high potential employees and succession planning and how to do it better than the competition. This paper discusses three major areas that are integral in maximizing the potential of internal talent: by fostering a talent management culture, identifying a high potential (HIPO) talent pool accurately, and defining a successful succession planning system. The paper concludes with a focus on succession planning and high potential identification practices in the Middle East, including specific examples from Saudi Aramco and HSBC.
Developing Leaders and Leadership
As in any war, strong leadership often separates the winners from the losers. The "war for talent" is no different, and as the battleground intensifies, organizations must ensure that they have the right people in place to face competitors. These leaders do not arrive heroically through the back door, but are rather developed throughout their careers so that they may one day lead the troops. The challenge lies in developing leaders, ensuring that they are attracted, identified, engaged and retained within an organization. Various developmental tools exist to encourage these actions, with specific methods used at different career stages. This paper addresses these challenges, tools and methods and concludes with a focus on leadership development practices in the Middle East. This final section includes a specific example from regionally-based Emirates and provides details regarding government-sponsored leadership development initiatives.
Managing Compensation in the Middle East
Developing and executing compensation plans are particularly difficult challenges facing HR professionals in the Middle East. These challenges stem largely from the record inflation levels and significant currency fluctuations the region is currently experiencing. This paper discusses the challenges of managing compensation in the rapidly changing Middle East economy. Specifically, it identifies and explores the drivers of upward pressure on salaries, including inflation, competition for talent, public sector pay increases and currency issues. Additionally, it analyzes the added complexities of compensating expatriates in the region, as well as the emerging need for and development of long-term incentives and non-cash benefits. Finally, the paper discusses issues related to low-wage workers in the region and the responses of both workers and governments to the current unrest.