x Abu Dhabi, UAEWednesday 24 January 2018

Emirati hiring freeze is a wake-up call, but not the solution

A freeze in government employment would simply put the problem of Emiratisation on temporary hold rather than find a long-term solution for it.

It was probably the most extreme solution yet regarding the challenge of encouraging more Emiratis to enter the private sector. At the 8th Emiratisation Congress last week, Essa Al Mulla, the executive director of the Emirates National Development Program, called on the Government to stop recruiting nationals to the public sector for at least three years.

There was no better place to raise the much-debated public versus private sector conundrum that seems to have haunted the UAE employment market for as long as anyone can remember. But this Emiratisation conference was a little different, and a little bolder.

Mr Al Mulla's statement was the most talked about issue for several days. It does make you wonder: have things got that bad with regards to private-sector employment of Emiratis? Considering that the Development Program's only mandate is to increase the number of Emiratis in the private sector, Mr Al Mulla's opinion should be a reliable indicator about progress so far. By the looks of things, we are at rock bottom.

There is an immediate urgency to increase Emirati representation in the private sector, but there are a few reasons why I think a public-sector employment freeze would not work.

First: the Government's role in business. The major players that are shaping the business landscape are, for the most part, backed by the state. No matter which industry you look at - property, energy, even banking - it is very clear that the Government wants to be in the driver's seat. Federal and local plans, such as UAE Vision 2021 and Abu Dhabi Vision 2030, tell the story.

Looking at the business of government from the employer's side, the reality is that the public sector is growing rapidly and the demand for manpower is greater than ever.

So where are public-sector businesses to find their manpower? With a freeze in government employment, we would simply put the problem on "pause", rather than find a solution to the Emiratisation problems that face the private sector.

In the last 10 years, the UAE has seen the birth of what are known as government-related entities (GREs), also known as semi-government companies. These are companies that are fully or partly owned by the Government, but essentially run as private organisations, with profit benchmarks and strategic-development mandates embedded in their business practices.

What these companies offer are healthy alternatives to the private sector, since Emiratis are given experiences that match the more competitive workplace: intense travel schedules, long working hours and tough training regimes.

With the growth of many of these GREs, there are jobs to be filled and Emirati labour is in high demand. A freeze at this stage would just mean fewer opportunities and more recruitment problems for the companies themselves.

From the employer's perspective, then, there is a problem with a hiring freeze. From the viewpoint of prospective Emirati employees, there is a more basic issue: the real reason the private sector has failed to attract Emiratis is compensation. The potential for personal and professional development in the private sector is not enough to convince people to forfeit the substantial pay packets of the government sector.

In all honesty, I thought this problem had been solved when the Khalifa Fund for Emiratisation Empowerment was set up to subsidise private-sector compensation. Used properly, the fund could provide a win-win solution by encouraging full-time employment at a lower public cost than government-sector jobs, while making the private sector look more attractive to Emiratis in the workforce.

In an interview last year, Mr Al Mulla said that the biggest success had been the integration of the public sector and the private sector, creating companies that are partly owned by the Government, but that practise private-sector style operations.

If employment was frozen in one sector, it would make that process of integration very difficult. Instead of putting a freeze on hiring, the government sector should continue to support the private sector, perhaps in a more direct role, such as creating recruitment departments that could match Emiratis with private-sector jobs, as one example.

There has never been an argument about the value the private sector brings in terms of skill development, but the reality is that the Government will continue to play a key role in that development, and in creating incentives for Emiratis. In order for the private sector to reach a level playing field with the public sector, the Government paradoxically has to play a key role in making it a more attractive employment option.

It may seem counterintuitive for a government company to support its competitor in the private sector, but when the common goal of developing a new generation of young Emirati leaders is at stake, everybody would be the winner.


Khalid Al Ameri is an associate at an Abu Dhabi development company

On Twitter: @KhalidAlAmeri