Our priorities have less to

do with dealing with the

fallouts of the 2008-10
global economic downturn,
and more to do with
longstanding, structural
labor and employment
challenges that have
emerged and accumulated
over the past three
decades.
-UAE Minister of Labour,
H.E. . Saqr Ghobash
Despite phenomenal economic
growth, Emirati participation levels
in the private sector remain
extremely low
The UAE has witnessed significant growth over
the past 2 decades, with GDP increasing 7 fold
over that period
i
. Sustained efforts have led to
a diversified economy, with the oil and gas
sector now accounting for only 33% of GDP (as
opposed to 43% in 2001
ii
). This growth has not
come without its challenges and main among
these is the lack of integration of the Emirati
workforce into the private sector. Despite
various Emiratisation initiatives introduced by
federal and local
governments, the
bridge linking the
Emirati workforce
with private
sector businesses
remains narrow.
On the one hand,
Emiratis generally
favour a career in
the stable and
comfortable
public sector, and on the other, the private
sector overwhelmingly perceives higher
economical value in foreign resources.
Emiratis currently occupy only 43,000 of the 2.2
Million (Figure 1) jobs in the private sector. The
public sector, traditionally the largest employer
of Emiratis, employs 495,000 Emiratis. Recent
economic challenges have curtailed the public
sectors ability to recruit, contributing to a 14%
iii
unemployment rate among Emiratis today
3
.
The severity of the issue increases significantly
due to the fact approximately 210,000 Emiratis
are expected to join the workforce by 2019,
representing a 34.3%
iv
cumulative increase
(Figure 2).
Figure 2: Projected growth of Emirati workforce
In this paper, we explore the causes behind the
extremely weak participation of Emiratis in the
private sector. Our analysis is based on
secondary research, internal forecasts, focus
groups and interviews with students,
823,700
722,614
613,320
34.3%
17.8%
2019 2015 2011
6.0%
1.7%
Expatriates
14.9%
3.8%
64.6%
16.7%
Emiratis
84.9%
7.4%
Public Sector
Quasi-government
Private Sector
Other
Figure 1: Employment rates segmented by sector
Most companies are just
filling numbers to avoid
government fines
-Emirates National
Development Program
For Emiratization to
succeed, it must come
from the heart. It should
be inherent at the
essence of the
organization
- Al-Futtaim Group
employees and employers in various disciplines
and industries.
Emiratization lost in translation
The majority of private sector companies
misinterpret Emiratization, treating it as a
percentage based performance target.
Emiratisation is rarely recognized as a credible
talent strategy, with even fewer companies
offering long term career progression schemes
tailored for Emiratis.
Whilst we could not
access quantitative
data for this, it was
clearly reflected in
our focus groups
and interviews with leading private sector
organizations in the UAE.
We found that most companies (especially
those bound by quotas- banks, insurance
providers and commercial companies with 50 or
more employees) employ Emiratis to meet
quotas and avoid penalties. Other
organizations, while
acting in good faith,
lack the necessary
capabilities and
expertise for sound
career planning. This
results in private
sector companies dealing with Emiratization as
a cost for doing business in the UAE. It also
leads to high attrition rates among Emirati
employees who feel isolated special cases in
such a private sector environment.
The private sector job market is
smaller than it appears
Social prestige, cultural tradition and religious
beliefs create substantial barriers for certain
types of jobs among Emiratis. Our analysis
reflects that while the nominal size of the job
market in the private sector is an estimated 2.2
million, 56.3% of jobs lie in industries that are
not favored by Emiratis. For instance, being
associated with a hotel or restaurant that
serves alcohol places any job in that
establishment off limits for Emiratis. The real
number of opportunities free from such issues
open to Emiratis closer to 1.2 million only
v
(Figure 3).
Industry
% of Total
Jobs
% of
Employed
Emiratis
Agriculture,
Hunting, Forestry
and Fishing
3.8 0.6
Activities of Private
Households as
Employers and
Undifferentiated
Production
Activities of Private
Households
13.1 0.8
Manufacturing 7.7 1.7
Construction 12.3 1.0
Wholesale and
Retail Trade; Repair
of Motor Vehicles,
Motorcycles and
Personal and
Household Goods
15.4 1.9
Hotels and
Restaurants
4.0 0.0
Total Jobs
56.3%
(1,238,600)
6%
(32,280)
Figure 3: Emirati participation rates in least favored
industries
False expectations
Our research reflects that generous
compensation packages and lesser working
Cultural and social
barriers exist when
selecting a job - Dubai
Events and Promotions
Establishment
Quite a few Emiratis walk in
with unrealistic demands
expecting similar pay to what
the public sector offers - Du
Emiratis are just
not willing to work
in shifts - DUBAL
hours in the public sector had contributed to
creating an expectation gaps between the
Emiratis exploring
opportunities in the
private sector and
potential employers.
This is especially true
at the entry level positions, with
undergraduates expecting AED 17,000 to AED
20,000 monthly pay, compared to the AED
4,000 to AED 10,000 most private sector
entities are prepared to offer prospective
employees of similar qualifications (Figure 4)
vi
.
Figure 4: Wage distribution across sectors
Furthermore, the average
number of working hours
in the private
sector is up to
30% more than
those required
in the public sector (Figure 5)
vii
, discouraging
interest in the private sector.
We expect that as the number of Emiratis
joining the workforce increases over the
medium term, pressure on the supply side will
force employee expectations downwards and
narrowing of this gap.
Figure 5: Distribution of actual hours worked, across
sectors
Skills mismatch
Despite policy makers steering the country
towards a knowledge-based economy, as
evident in Vision 2021s United in Knowledge
theme, published figures suggest that (in 2011)
only 24.6% of Emirati students are enrolled in
science and technology majors that are
considered critical to support a drive towards a
knowledge based economy (Figure 6)
viii
.
The mismatch between the type of jobs that
will be created and the type of skills Emirati
students are pursuing today could increase the
Emirati unemployment levels further. This is
reinforced by the high unemployment rates
among the young Emirati age groups (Figure
7)
ix
. In addition, as government initiatives
towards building a knowledge-based economy
bear fruit, the reliance on an expatriate
workforce will ironically increase.
16.4%
29.9%
27.4%
19.3%
A
E
D

3
,
0
0
0
-
A
E
D

7
,
9
9
9
29.9%
23.0%
11.5%
2.3%
A
E
D

1
,
3
0
0
-
A
E
D

2
9
9
9
27.4%
23.8%
27.6%
1.6%
A
E
D

<
1
,
3
0
0
19.3%
15.9%
3.9%
1.8%
A
E
D

1
8
,
0
0
0

+
6.8%
26.0%
22.7%
41.3%
A
E
D

8
,
0
0
0
-
A
E
D

1
7
,
9
9
9
Private
Quasi-government
Local government
Federal government
M
o
n
t
h
l
y

W
a
g
e
s
52.8
45.6
44.0
40.8
Private
Quasi-government
Federal Government
Local Government
Hours Worked (Actual)
4.4%
8.5%
16.5%
5.3%
11.1%
27.4%
1.5% Media and Communications
0.7%
Agriculture and Food
Education
Human and Social Sciences
Others
Basic Education
Sharia and Law
Business and Econimics
11.0%
Information Technology
8.6%
Engineering
3.8%
Medicine and Health Services
1.2%
Sciences
Knowledge-Based
Economy Areas
(24.6%)
Age Group
15 - 19 36.1%
20 - 24 11.3%
25 - 34 3.9%
35 - 44 2.0%
45 - 54 1.5%
55 - 64 2.3%
65 + 4.1%
Unemployment is highest among
the younger age groups
Most Emiratis
graduate with a
degree in support
function; hence they
work in the support
departments- Du
Support jobs and the Public Sector
Irony
While the public sector does employ most
Emiratis, it is not doing the Emirati workforce a
favor by staffing most in support jobs. A case
study we executed at a representative
government entity (name is withheld due to
confidentiality requirements) underscores this
finding. We found that only 42.8% of Emirati
employees at the entity
took on core functions,
out of which over one-
third occupy technical
jobs not requiring
higher education. In
addition, while only 1
in 5 core jobs was occupied by an Emirati, the
figure stood closer to 9 in 10 for support jobs.
We also found that support jobs represented
23% of total jobs at the entity, a deviation from
the general standards of 5% to 10% (Figure 8)
x
for the sector.
Figure 6: Distribution of Emirati students by Major area of study
Figure 7: Unemployment of Emiratis by age group
Figure 8: Job distribution between Emiratis and Expats
This trend is likely to have two negative
implications. First, Emiratis lose out on an
opportunity to develop the skills and
competencies relevant to core jobs, denying
them a meaningful opportunity to participate in
the planned knowledge-based economy and
limiting the realization of their true potential.
Second, the knowledge and expertise created in
the UAE remains largely in the hands of expats
and is prone to being lost as expats relocate to
home countries or elsewhere.
Conclusion and recommendations
As the Emirati workforce is set to grow, a
significant shift in thinking is urgently required.
First, it is important for policy makers to define
and communicate the fundamentals of
Emiratization to stakeholders at all levels. This
should serve to provide a uniform
interpretation of what Emiratization really
means and what it is really supposed to achieve.
In the absence of a common language among
policy makers, the public sector and the private
sector, the progress of Emiratization related
initiatives will continue to suffer.
Second, government incentives and other
interventions should nudge the private sector
to revamp their talent strategies to include
Emiratis and focus on the development of
Emiratis, rather than merely the hiring of
Emiratis. A recent initiative by the Sheikh
Khalifa Fund supported the development and
induction of Emiratis into the private sector by
sharing the financial investments associated
with employee development. In addition, the
National Human Resource Development and
Employment Authority (Tanmia) has been
successfully contributing to Emiratization by
fostering the development of Emiratis
specialized trainings and facilitating job
placements. These are steps in the right
direction and should act as an incentive for both
large businesses and SMEs to hire and nurture
Emiratis.
Third, the real job market size can be expanded
to make more jobs socially acceptable for
Emiratis without overstepping cultural and
religious sensitivities. This can be achieved by
building awareness on what certain jobs entail
and by encouraging supportive environments in
sectors currently not favored by Emiratis. The
Private sector should be engaged as a partner
to create an attitudinal shift by holding
informative programs and showcasing Emirati
role models.
Fourth, career orientation programs need be
adopted at schools to make students aware
regarding the opportunities presented by a
progressively knowledge-based economy. Such
initiatives can help direct students to pursue
the knowledge and skill requirements for a
career in such an economy from a young age.
Finally, government scholarship programs
should be tailored to encourage enrolment in
studies that are aligned with the job market
requirements of the UAE economy. This may
result in students opting to study for careers
(such as scientists, bio-medical professionals
and/or engineers) that are more relevant in a
knowledge-based economy.
Expat 5,984 3.8% 96.2%
Emirati 3,295 57.2% 42.8%
Number of Employees within a
Government Entity
Core Support
TCO Management Consulting is an initiative born out of the need for first-class consulting
support in the delivery and implementation of strategic initiatives across all forms of
government. We provide advisory services to public sector organizations in the UAE and MENA
region. Through our precise focus on the quality of service delivery, capability development,
and knowledge management, TCO aspires to be a Strategic Partner in Public Sector Innovation.
This White Paper was prepared by:
Ahmad Ghannoum, a Principal Consultant with TCO based in Dubai.
Hassan Ali Habib Ali, an Analyst with TCO based in Dubai.
For more information please contact:
Ahmad Ghannoum, +971 (0)50 189 7232 or ahmad.ghannoum@tcoconsulting.com
Visit http://www.tcoconsulting.com to learn more about TCO Management Consulting
Copyright 2012
TCO Management Consulting is an initiative born out of the need for first-class consulting
support in the delivery and implementation of strategic initiatives across all forms of
government. We provide advisory services to public sector organizations in the UAE and MENA
region. Through our precise focus on the quality of service delivery, capability development,
and knowledge management, TCO aspires to be a Strategic Partner in Public Sector Innovation.
This White Paper was prepared by:
Ahmad Ghannoum, a Principal Consultant with TCO based in Dubai.
Hassan Ali Habib Ali, an Analyst with TCO based in Dubai.
For more information please contact:
Ahmad Ghannoum, +971 (0)50 189 7232 or ahmad.ghannoum@tcoconsulting.com
Visit http://www.tcoconsulting.com to learn more about TCO Management Consulting
Copyright 2012
TCO Management Consulting is an initiative born out of the need for first-class consulting
support in the delivery and implementation of strategic initiatives across all forms of
government. We provide advisory services to public sector organizations in the UAE and MENA
region. Through our precise focus on the quality of service delivery, capability development,
and knowledge management, TCO aspires to be a Strategic Partner in Public Sector Innovation.
This White Paper was prepared by:
Ahmad Ghannoum, a Principal Consultant with TCO based in Dubai.
Hassan Ali Habib Ali, an Analyst with TCO based in Dubai.
For more information please contact:
Ahmad Ghannoum, +971 (0)50 189 7232 or ahmad.ghannoum@tcoconsulting.com
Visit http://www.tcoconsulting.com to learn more about TCO Management Consulting
Copyright 2012
References
The following sources of information and data-points were used to inform our thinking, and the statistics utilized in
this document.
i
World Bank Development Indicators, 1990-2009
ii
UAE economic growth report; http://www.uaeinteract.com/docs/UAE_may_see_3.3_real_GDP_growth/46586.htm
iii
UAE National Bureau of Statistics- Labour Force Survey 2009
iv
TCO analysis; UAE National Bureau of Statistics- Labour Force Survey 2009
v
UAE National Bureau of Statistics- Labour Force Survey 2009
vi
UAE National Bureau of Statistics- Labour Force Survey 2009
vii
UAE National Bureau of Statistics- Labour Force Survey 2009
viii
Ministry of Higher Education & Scientific Research 2011
ix
UAE National Bureau of Statistics- Labour Force Survey 2009
x
Source: UAE Ministry of Health 2011