Five reasons for the GCC skills mismatch

Author: PM Editorial | Date: 01 Oct 2015

Expert identifies key issues affecting the region’s talent market

A misalignment between private sector employment and skills availability in local labour markets is threatening to increase unemployment in the GCC, according to an executive at global professional services firm Towers Watson.
Across the region, governments are the main employers of their citizens. “The public sector in Saudi Arabia, [for example], is now over-saturated with only 22 per cent of [Saudi] employees in the private sector. This compares to 80 per cent in the UK, for example,” says Jim Matthewman, lead consultant at Towers Watson in Dubai.
In a recent report, the International Monetary Fund also highlighted that “international comparisons suggest skills mismatches and the low quality of the educational system pose constraints to the GCC business environment”. Matthewman attributes the region’s forthcoming labour woes to five key issues:
1. Negative opinion of the local labour force
Many employers in the private sector have a negative perception of the local workforce, who sometimes expect “significant positions”, notably management roles, for which they are inexperienced. Leadership skills or industry knowledge are sometimes lacking, but in some countries people expect wage levels that don’t match their qualifications, says Matthewman.
2. Lukewarm support for SMEs
“While GCC countries continue to push the nationalisation agenda, there is little support for SMEs and considerable bureaucracy,” says Matthewman, adding that of the six countries in the region, only the UAE has made significant strides in encouraging entrepreneurship.
3. The role of women in the workplace
This is particularly true in Saudi Arabia, where there is a societal resistance to allowing qualified women to enter the job market. “But again there are healthy seeds of change, especially in the UAE and Oman, as well as Saudi. This year I met the first female CEO [in the kingdom] and she was terrific,” says Matthewman.
4. The vocational training gap
GCC nationals place a high importance on foreign university education, which then creates high job expectations. A high proportion of nationals who study abroad do not return to their native countries to work. “Those who do, then opt for government jobs. This means there is a fundamental gap in vocational training and over-qualification of the professional workforce,” says Matthewman.
5. Focus on ‘prestigious’ jobs
Private sector employment is focused on semi-government companies, international banks and telcos, says Matthewman. These sectors are “able to cream off key talent, leaving little else for local SMEs or manufacturing resources that tend to get criticised for not filling the required quotas.”
These concerns have created a “vicious cycle of employment”, forcing many private sector firms to opt for Western or Asian expatriates, both in management and in technical and manual labour, says Matthewman. But there is good news, with a willing acceptance among both government and private sector employers to act on such problems, with the falling oil price helping sharpen minds on the need to diversify economies and address workforce issues.