Human capital function is increasing its strategic role in regional businesses, says Ernst & Young

The survey polled 170 CEOs and Human Resources leaders from private-sector organizations in 10 countries across the region. An encouraging 55% of respondents indicated that HR is more involved in strategy development and effective people management in their organizations. Last year, only 35% of respondents agreed that HR was a strategic partner to business.

"The Middle East Human Capital Survey allows regional organizations to compare their practices and identify areas of improvement. As we continue to accelerate towards greater economic growth, it is becoming even more explicit that an organization's people make all the difference. To maintain competitive advantage, businesses need to invest in people and adopt strategies, policies and practices oriented towards the development of human capital,"

said Omar Bitar, Managing Partner, Advisory Services, Ernst & Young Middle East.

When it comes to compensation and benefits, the survey findings showed that up to 40% of respondents believe that their compensation levels are not at par with market levels. 33% of respondents in the UAE and 26% in Saudi Arabia indicated that their organizations do not consider performance as a critical criterion for variable pay.

The survey highlighted greater involvement from senior management in leadership development, with 67% of respondents saying so. However, more than half the respondents agreed that they did not have a proper succession plan for creating an effective leadership pipeline.

Findings also show that up to 41% of respondents believe their organizations do not formally link performance development plans with performance assessments. 73% of them say that '360 degree feedback' is not used as a developmental tool.

Organizations in the Middle East have started to see real value in identifying and developing leadership, but there is clearly still room for improvement. Evidently, almost half of the respondents in Kuwait, Saudi Arabia and the UAE agreed that they do not have a well defined training and development policy or special programs for the development of nationals.

"The changes in work life and job opportunities are among the most visible aspects of globalization and are creating new challenges for human capital professionals around the world. To stay ahead in the war for talent, businesses need to place more emphasis on training and retention which leads to intrinsic growth in the role and value of its people. This is particularly relevant for the development of national talent. " concluded Omar.