Middle East is losing out in the war for top talent, global study of elite MBA students reveals

Key Findings of Global Study
• Only one-fifth of students in the world's top MBA schools are interested in working in the Middle East
• European MBA students are relatively more interested in working in the Middle East than US or Asian students
• The most popular jobs for top MBA students are in financial services and consulting while the alcohol, tobacco, chemicals and oil & gas sectors are among the least attractive
• MBA students are more interested in working for publicly traded companies than for family- or government-owned businesses
• Three-quarters of top-tier MBA students say corporate reputation will play a critical role in deciding where to work

Hill & Knowlton's eighth annual Corporate Reputation Watch study shows that the Middle East is among the regions that are losing the reputational battle in the global war for talent.

The study shows that despite booming economies, soaring foreign direct investment and high oil prices the Middle East is still among a group of key emerging markets whose reputations have yet to attract the best global talent.

The study found that, based on what they have read or heard about the Middle East, only 20 per cent of students in the world's MBA schools say they are interested in working in the region, compared with 57 per cent who say they are not interested in working here.

The following table shows that the Middle East is ranked among the regions and countries that attracted the least interest from the MBA students surveyed:

Regional preferences /Net interest scores2
Western Europe +80%
North America +76%
North Asia +30%
Australia and New Zealand +23%
South East Asia +1%
Latin America -8%
South Asia -19%
Middle East -37%
Russia -41%
Eastern Europe -36%
Africa -49%

However, European students are relatively more interested in working in the Middle East (32 per cent versus 20 per cent overall).

When considering some individual emerging markets the study shows that students at the European business schools see the UAE and Dubai specifically as more attractive than their peers in other parts of the world (40 per cent versus 30 per cent).

Dave Robinson, CEO, Hill & Knowlton Middle East, said, "This is a critical issue for the region. With governments and companies in the Middle East adopting aggressive growth strategies and with the move towards international business practices, the need for the best graduate talent has never been greater. The Middle East is in the front line of the global war for talent.

"Today's MBA students will be among the corporate leaders of the next 15 to 20 years. In order to join the ranks of the top global companies it is vital that organisations in the Middle East have the ability to attract the world's best management talent."

Industry sectors: winners vs. losers
The study also found that there are particular industry sectors which are failing to attract the interest of the best international talent.

For multi-billion dollar industries such as alcohol, chemicals and tobacco, more than twice the number of MBA students are not interested in working in them than those who are: alcohol (51 per cent versus 20 per cent); chemicals (48 per cent versus 19 percent); and tobacco (67 per cent versus 13 per cent). Interestingly both the pharmaceutical industry and, of particular concern to Gulf countries, the oil and gas industries also are in the situation where their reputations put off slightly more students than they attract.

Reputation is an important factor
Companies need to know that in the war for talent, they must do all they can to win and their external perception is possibly the most vital weapon in their armoury. The study confirms the importance of reputation with almost three quarters (73 per cent) of MBA students stating that corporate reputation plays an extremely or very important role when considering where to work after completing their MBA, with only one fifth (20 per cent) saying it is fairly important. In fact, only four per cent said that reputation was not important.

The results also show significant international mobility among business' most sought after talent with over three quarters (76 per cent) of those surveyed stating they are looking to change either industries or firms following graduation. Only one fifth (19 per cent) said they are intending to return to the firm that they worked for prior to their MBA. A fifth (20 per cent) of students surveyed want to move to another country from that which they are studying, whilst one quarter (25 per cent) are studying outside of their home country and plan on staying there.

Dave Robinson, CEO, Hill & Knowlton Middle East, said, "MBAs graduating in a post-Enron world have a strong preference for the companies with the best reputations. It is clear that recruiters of top talent will need to provide more than just generous compensation and ample opportunity for growth. Tomorrow's leaders are overwhelmingly seeking to associate themselves with industries, and specifically companies, with great reputations."

Ownership matters
The ownership type of company matters as well. By far the most attractive companies for MBA graduates are those which are publicly traded with almost two thirds (61 per cent) citing interest and only 6 per cent saying they are not interested. Companies which are owned by venture capital or private equity funds have just over half of MBA students (52 per cent) expressing an interest in working for them, versus just 12 per cent with a lack of interest. The situation for family- and government-owned businesses - still comparatively common in the Middle East - is less positive with both having fewer students interested in joining them after graduating.

For family-owned companies, a quarter (24 per cent) expressed interest in joining one, versus 32 per cent with no interest. The survey painted a similar picture for government-owned companies with just under a quarter (23 per cent) of students citing interest, versus 46 per cent who are not interested.

How to build reputation?
So how can companies promote reputations that make them more attractive to MBA students? The key factors that drive reputation are perhaps unsurprising:

Factors that drive reputation/ % that rate as extremely or very important
Quality of management 89
Quality of products and services 88
Employee talent 83
Financial performance and investment value 71
Innovation 68
Global reach 58
Social responsibility 58
Use of corporate assets 40

However, when asked what factors drive career choice, MBA students told a slightly different story. The factors listed split broadly into three tiers. The top tier is all about the position: employment career opportunities; corporate culture and working environment; employee compensation and benefits package; and employee satisfaction. In the second tier, come some of the basic issues about performance.
The third tier covers the messages that the company communicates about its ethics and social and environmental responsibility - its broader brand and values agenda:

Important factors in choosing job/ % that rate as extremely or very important
Tier 1
Career opportunities 95
Corporate culture and working environment 86
Compensation and benefits package 85
Employee satisfaction 84

Tier 2
Quality of products and services 75
Financial performance and growth potential 73
Tier 3 Corporate governance and ethics 58
Social responsibility and community involvement 49
Brand and marketing message 48
Environmental / green policy 34

According to The Graduate Management Admission Council (GMAC)*, graduating MBAs and other graduate business students are the third major source of staffing for open positions amongst corporates. Furthermore, corporate recruiters planned to increase the numbers of graduate business student hires by 18 per cent in 2007, so it is clearly important that they are attracting the best from this pool of talent.

Dave Robinson, CEO, Hill & Knowlton Middle East, concluded, "Caring and generous companies are very attractive - MBA students want a well developed career path and a generous compensation package. But money isn't the be all and end all. The future winners in the corporate world will be the ones who are the quickest to recognise this and who take action to enhance and protect reputation.

"Companies in the Middle East have some way to go in building reputations to attract the best talent. It is encouraging to note that many governments in the region are aware of this and are undertaking initiatives to build the profile and reputation of Middle East markets as attractive employment destinations for the world's most talented graduates."