x Abu Dhabi, UAEMonday 24 July 2017

Year of Emiratisation: Low private sector pay and long hours remain obstacle

Barriers are still holding back Emiratis from joining the private sector despite 2013 being designated the year of emiratisation.

Visitors check out job opportunities at Careers UAE 2012. Ninety per cent of the 225,000 Emiratis in the workforce are employed in the public sector. Jeff Topping / The National
Visitors check out job opportunities at Careers UAE 2012. Ninety per cent of the 225,000 Emiratis in the workforce are employed in the public sector. Jeff Topping / The National

Barriers are still holding back Emiratis from joining the private sector despite 2013 being designated the year of Emiratisation.

Nationals cite low wages and long hours as reasons dissuading them from making the move from jobs with the Government, while few incentives or penalties are driving private sector companies towards recruiting locals, say experts.

"With 2013 having been declared the Emiratisation year, there is more urgency and awareness about the need to Emiratise in the private sector but not necessarily more actions, unfortunately," said Hamza Zaouali, the managing director of Iris Executives, a UAE-based recruitment company specialising in hiring Emiratis. Ninety per cent of the 225,000 Emiratis in the workforce are employed in the public sector. Of the 22,000 in the private sector, 65 per cent work in the banking industry, according to the Ministry of Labour. The Government is striving to raise the numbers of Emiratis in the private sector to reduce the burden on the already bloated public sector and help to improve technical skills.

Mohammad Zamani, an associate at the professional services firm KPMG is one of the Emiratis working in the private sector. He believes a key challenge is changing the mindset of young Emirati graduates and their families about a career outside Government.

"Awareness of working in the private sector is a must as the public sector will not be able to absorb all the new Emirati graduates," said Mr Zamani. "The competition in the private sector to take out the best Emiratis might put some pressure on them too in terms of pursuing further education, which might put pressure on their work-life balance."

He also cites a difference in salary levels between the private and public sector as another barrier.

In an effort to make the private sector more attractive, the Ministry of Labour is considering several reforms including increasing private sector holidays and providing a minimum salary entitlement for UAE nationals.

Still, Mr Zaouali believes the salary gap may be a misconception.

"In fact, many government entities pay much less than private sectors," he said. "The fundamental points of difference are working hours and job stability, which are very understandable."

The Cabinet passed a decree in 2005 that stipulates companies operating in trade and commercial activities with more than 50 employees should maintain an annual 2 per cent Emiratisation quota. But certain sectors have more stringent quotas such as 15 per cent in banking. Consultancy firms are also expected to have significant levels of Emiratisation among their operational team to pre-qualify for government tenders.

But the quota system was patchy, said Peter Benyon,the regional director of ICAEW Middle East, a professional accounting body.

"There are roadblocks in the system which promote certain industries over others and need to be addressed in the long term. I see that as a major barrier to the optimal allocation of Emiratis," he said.

Of the companies that are ramping up their recruitment of nationals, many say the process is not just about meeting internal or external targets.

"It's about becoming a more local company. The future of Axa here is about being managed by nationals where they will support the business and meet Axa's strategy," said Alexis de Beauregard, the chief officer of marketing and retail product offering at Axa Insurance in the Gulf. It has an Emiratisation level of 15 per cent.

 

tarnold@thenational.ae