Despite many parts of the world economy being on the downturn, the Middle East still faces a major challenge in attracting and retaining professional, high quality staff, according to a leading human resource industry observer.
“The global economic crisis may ease the bottleneck of available overseas talent for organizations and companies in the region, but effective human resource strategies are now an imperative, not a choice,” said Michelle Boyd, executive conference director for the Middle East HR Summit in Dubai, being held October 26-30.
“There are remarkable opportunities in this part of the world and the region can potentially benefit from the global financial crisis, which is resulting in thousands of people being laid off in other parts of the world. However, those dynamics will take time to trickle down and experienced, qualified personnel are still much sought after and a real skills deficit will prevail for the short to medium term,” she added.
Staffing remains one of the biggest challenges of Dubai and the Gulf’s market. The Middle East alone has demands for more than 1.5 million staff by 2020 and the aviation sector alone will require 200,000 additional pilots over the coming two decades. The emirates growing need for skilled workers and high-level executives is taking its toll on the continuously expanding airline and hospitality businesses. As the real estate boom in hotels and condos gets out of control, staff accommodation and the high standard of living becomes an issue with hired overseas labor.
The Middle East and North Africa needs to create 54 million jobs over the next 15 years, according to the World Bank. To create these jobs, the region has to maintain average annual GDP growth rates of 6-8 percent between now and 2020, whatever the world economic climate, heaping even more pressure on regional human resource professionals.
A key driver is the growing diversification away from oil for Arabian Gulf economies. But, according to the International Labor Organization, in spite of massive regional growth, productivity in the GCC actually fell in the non-oil sector between 1997 and 2007.
“It’s now not just a question of recruiting suitable applicants, it’s also an issue of motivating those already employed to perform more effectively,” said Boyd.
Lynda Gratton, professor of Management Practice at London Business School and leading authority on people management, urged regional Human Resource (HR) professionals to take stock of global industry trends and to listen to the next generation of business leaders. Gratton explained that in Europe and the US, baby boomers are now beginning to approach retirement. This has led to an aging population and with it the problems of funding pensions that is being compounded by a declining birth rate. By relaxing immigration rules it is hoped that overseas workers will be able to contribute towards the shortfall, however the western economies will now have to add a looming recession into that equation.
Boyd said, “In sharp contrast, the demographics prevalent throughout the Middle East are changing at a rapid pace and 50 percent of the population is still under 16 years of age. In the Gulf countries, expatriate workers dominate the job market, but it is “Generation Y” that now holds the key to the future of business.
“Ranging from teens to mid-20s, this section of the population is well educated and media savvy and highly competent with technology,” said Boyd. Indeed terms such as “twittering” and other almost incomprehensible SMS languages allied with Facebook are the ways in which this demographic communicates. “Fundamentally, it is their ease with technology that should make them so attractive to HR professionals they are a generation like no other, the first to embrace IT from infancy,” said Gratton.
“Businesses can only grow in three different ways. Either through cost-cutting, mergers and acquisitions and finally through innovation that’s where ‘Generation Y’ can be of great use. Technology will be key to the future of business, it will value-add with all of the benefits of cost, speed and flexibility and fully engage those embarking on their career paths,” Gratton said, adding, “However, it can be a double-edged sword, ‘Generation Y’ does need managing closely, they can drift into their own sense of community, which won’t necessarily include their employer.”
Arabia’s hotel industry is facing serious problems in its workforce. The staffing challenge is one that the whole industry is experiencing. “Our main issue is how to hold on to the high-service levels that management has achieved across the region. Inconsistencies in service quality will be detrimental for Dubai as a tourist destination,” said a top executive from Accor.
“Our only challenge for Dubai as a destination is staffing though we have one of the best locations on the globe. Two areas that we need to look at seriously are service and value. Service from the hotel industry point-of-view to a general point-of-view, has not improved over the years. Standards I have seen have actually decreased in Dubai. That is an area we need to look at as we are expanding rapidly with hundreds of thousands of travelers coming to our destination,” said Gerhard Hardick, Roya International’s director.
According to Christian Anklin, senior associate at HVS Executive Search in London, as even the most ardent optimists are forced to severely readjust their forecasts for the US and European hotel markets, many protagonists are looking east for possible salvation. “Some gaze towards Russia and the CIS countries, where the abundance of natural resources coupled with surging hotel room demand (especially in the secondary and tertiary cities) continues to paint a rosier business picture. Others are looking further south towards the Middle East, where a combination of oil wealth and sheer ambition make it seem like there is no end in sight for the hotel business,” he said.
“The center of growth as well as the regional headquarters for most hotel management companies in the Middle East is Dubai, an unprecedented success story that continues to astound. For some time hoteliers on both property and corporate office levels were flocking to Dubai to enjoy the combined benefits of tax free salaries, superior quality of life and good career opportunities. Despite the recent increases in living costs and infrastructure issues such as traffic congestion, Dubai still ranks strongly as a desirable port of call for hoteliers: a place where business continues as usual; a place that can finance its own development,” Anklin said.