AFTER CHINA, WHERE NEXT?

Gulf countries and Iran present opportunities but hiring is challenging.

With the growth outlook for China looking soft, companies are seeking growth opportunities outside Asia. Notwithstanding political turmoil in the region, the opening of Iran is raising hopes for new growth prospects. I spoke recently with Ksenia Pentchoukova in Odgers Berndtson’s Dubai office about the hiring situation in the Middle East.

Business Outlook: “Right now the Gulf Coast countries are in a cautious mode because of the impact of regional developments on country budgets.” Ksenia reported, “Countries in the Gulf Cooperation Council (GCC) such as Saudi Arabia, UAE and Qatar have historically been bases for international businesses that demanded highly skilled workforce. Right now this demand has slowed because of low oil and gas prices and also because of the military activity in Yemen . North African business activity is also in a “sleeping” mode.”

Up until recent years, most senior talent in the GCC has been expatriate. Now more local nationals are assuming commercial and management roles. Research and development talent still needs to be imported, along with marketing, product development and manufacturing. Industrial management roles continue to be filled by expatriates.

Iran Opportunity: Investors in the Middle East are anticipating the opening of Iran with optimism. In the past, companies may have operated there under the aegis of a local company. Now many family-owned businesses from the Gulf are looking to acquire operating companies, as well as manufacturing facilities in Iran.

Iran exports $1bn in petrochemicals 

annually.

With the biggest gas reserves of any Middle East country and a population of 78 million, Iran has promising economic potential. Its workforce is highly educated although workers will need training to upgrade skills and to adopt global best practices.

For the next 5 – 10 years, Iran will need to import foreign talent who can transfer knowledge to the local population. Iranians who immigrated to various parts of the world during the last 50 years will be in demand to return. 

Filling roles in the Middle East is complicated:

• Nationalization quotas in the individual country need to be considered first. Gulf Countries governments require that MNCs hire some percentage of local nationals. Quotas are generally set by industry and can range between 5% and 60%.
• Next you must consider the passport and the nationality of the potential hire. For example Syrians are not allowed to enter Libya and cannot be employed there. In Saudi Arabia, hiring quotas are set by nationality. An individual will not be able to enter any of the Gulf countries if he/she has travelled to Israel in the past.
• Country attitudes and customs must be considered. “One of my Scandinavian clients was determined to be gender-friendly.” Ksenia said, “This organization wanted to hire a female senior executive to develop its business in Kuwait and Saudi Arabia. But it does not work: a range of restrictions prevent women from participating in public life in these countries.”
• Finally, companies need to have their fingers on the pulse of what is going on. New laws and restrictions can be adopted overnight and not be publicized. Businesses in the region need to be agile and build wide networks to gain faster access to such information.

Future trends: Ksenia predicts that over the next five years a lot of emigre expatriates with Middle Eastern roots– particularly Lebanese and Iranians, will return to the region. Middle Easterners who are now in Canada, USA, Australia, and Europe will come back to work and/or to be closer to their families and aging parents. The experience, education and skills that they will bring with them will help increase the pool of regional talent to multinational standards.