Emiratisation a success in banking sector, but insurance companies resist government target.
Emiratisation hurdles remain
DUBAI // Many private companies are choosing to pay a fine rather than meet government targets for hiring Emiratis.
The Ministry of Labour requires employers in some sectors to increase the number of Emiratis they employ by a set percentage each year.
"There is quota for the banking sector, for the trade sector and for the insurance sector," said Essa Al Mulla, executive director of the Emirates Nationals Development Programme (ENDP). "The quota system has worked very well with the banking sector, but it's failed big-time with the trade and insurance sectors.
"In the insurance sector, they have to pay approximately 0.01 per cent of their net profit if they have not achieved the minimum quota required. A lot of insurance companies are saying, 'OK, we'll pay the amount the government is asking us for, and we will not recruit Emiratis'."
The banking sector target is an increase of 4 per cent a year until between 40 and 45 per cent of staff are Emirati.
Abu Dhabi Islamic Bank leads the sector for Emiratisation and has already exceeded the quota. Last year 48 per cent of its staff were Emirati, and it aims to pass 50 per cent by the end of this year.
"The banking sector can afford to have this type of system," Mr Al Mulla said. "The return on investment in the banking sector is always much higher than in other sectors. For example, retail is a low-margin, high-volume sector."
The ENDP was set up in 2005 to help nationals to find jobs in the private sector. Emiratis generally prefer to work for the government, and in particular avoid careers in hospitality and retail.
Mr Al Mulla believes the key to changing this mindset is the introduction of career guidance in public schools. Last November the Ministry of Education announced plans to appoint specialist career counsellors in every government high school in Dubai and the Northern Emirates by 2015, starting with 20 schools this year.
Mr Al Mulla said if such an initiative had been introduced in 2000 an entire generation would by now have grown up with the attitude that working in hotels and retail was acceptable.
"If we had started to focus on career guidance earlier, today we'd be in much better shape because the Emirati mindset would be open to joining any sector, not only the government," he said.
"I want to have a very strong career guidance system in schools, because that is what's missing. We should open the minds of Emiratis from a very early stage by linking the education system with the job market's requirements."
One Emirati who did receive careers guidance is Mohammed Al Serkal, 23, who works in the finance section of Sharjah Airports Authority. He said: "I studied at the Sharjah American International School and we had a career counsellor from grade 11. So for two years we actually had someone helping us to decide where we wanted to go. They helped us to understand what a CV was.
"But I think the Higher Colleges of Technology, where I graduated, actually made me who I am today because they helped me develop an excellent CV that I'm getting a lot of praise for."
Kristian Ulrichsen, a Gulf specialist at the London School of Economics, said it might not be possible for the UAE and other Gulf states to continue operating nationalisation programmes in the private sector.
"In the modern era of global governance and multiple jurisdictions it may become harder to achieve outright nationalisation measures outside the purely public sector, as private companies and multilateral corporations become bound by international frameworks of governance," he said. "This could be a clash that grows sharper in the years ahead."
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