How technology is reshaping human resources (HR) in the Middle East (page 1 of 4)

This situation has resulted in a unique HR environment, raising some key challenges as well. This article aims to review HR practices in the Middle East, how technology is being leveraged to achieve some HR goals and what major issues need to be tackled.

HR CONTEXT IN THE MIDDLE EAST
The Middle East region enjoys high but unevenly distributed wealth: the oil producing countries (Saudi Arabia, the Gulf States, and Iraq) are at the top of the heap and others (including populous countries such as Egypt) are suffering economically.

Thanks to the oil bonanza, the wealthiest countries have been able to engage in large infrastructure projects requiring the significant use of labor from neighboring countries, thus creating a two-tier system in which the Gulf States import labor from the less economically fortunate countries (Egypt, Jordan, the Palestinian territories, and Lebanon).

Most of the positions held by foreign Arab workers are either professional or mid-management, in the service, educational and administrative sectors, where the existence of a common culture and language is key.

SIGNIFICANT USE OF EXPATRIATES AND LOW UNEMPLOYMENT
However, in addition to this cross-Arab labor movement, further workforce expansion was necessary and has resulted in hundreds of thousands of non-Arab workers joining the region's labor pool. Two categories can be identified on the basis of their geographic origin and terms of employment: those who hail from South Asia (mainly India and Pakistan) and East Asia (mainly the Philippines) primarily occupying technical, clerical and mid level management jobs, and the professional and management-level expatriates who tend to be European (mainly UK) or U.S. nationals.

The trend towards foreign workers, albeit still strong, is slowing down due to the increase in the unemployment rate of Middle Eastern nationals in their respective countries. This was already the case in the non-oil economies, which caused many of their citizens to move to the other, wealthier countries.

What is changing now is that even the Gulf States are experiencing unheard-of levels of unemployment. Saudi Arabia, for example, long known for its full employment status, is now enduring an all-time high of 32 percent unemployment.2 In the United Arab Emirates, the number of job seekers is expected to reach 300,000 in 2006,3 out of a population of less than three million, including a majority of non-national residents.

This situation has even prompted the government to set up an HR Authority in charge of matching job seekers and openings.

The Gulf States are also implementing a workforce nationalization policy, whereby organizations (especially in the public and quasi-public sectors) are encouraged to reserve some positions for nationals, or at least give preference to nationals in the hiring process. Since foreigners were initially sought to supplement the restricted local skills base, the results of such policies can only be limited, at least in the short term. Large scale training and career development is essential.

On the other hand the private sector has not been able to provide jobs for nationals in the oil-rich countries largely because of its inability to compete with the kind of work conditions and salaries offered to nationals by the public sector. Observers do not expect the private sector to be able to play its full role in creating jobs for Gulf nationals as long governments continue to offer very favorable work conditions and high salaries to nationals.

STRONG ROLE OF THE PUBLIC SECTOR
Another key labor characteristic of Middle Eastern countries with direct impact on human resource management is the predominance of the government sector in the economy.