Kuwait: Localisation in the GCC

Where to start investigating Kuwaitisation? How about a consulting firm specialising in this? Tawteen (Arabic for 'localisation'), with branches in Qatar and Saudi Arabia and joint projects with Tanmia in Dubai, is a division of HumanSoft, a diversified HR and training group owned by private shareholders in Kuwait. As explained by Sadek Jafar, General Manager of the Kuwait Branch of Tawteen, the company is focused on helping in the Kuwaitisation process. Contracted to place over a thousand Kuwaitis in the private sector by the Manpower and Government Restructuring Programme of the Ministry of Planning, Tawteen is trying to play its part in the dramatic expansion (but still small numbers) of Kuwait Nationals working outside of the Government.

Tawteen, founded in 2000, is not just a placement agency. It evaluates job seekers using assessment tools like SHL's OPQ, offering career counselling and planning advice, running assessment centres and filtering out unsuitable applicants. "The younger generation here do need career counselling," insists Sadek Jafar. "They need to be aware of their responsibilities, the behaviours expected of them, and how they should deal with their managers and colleagues at work. Many still have a problem with their work values," - i.e. they are not used to doing a lot.

Compared with other Gulf States - such as the UAE and Qatar - Kuwaitis make up a substantial proportion of the inhabitants of their country. Of a 2.5m total population, Kuwaitis number around 950,000, only slightly outnumbered by the 1.5m expatriates. In arguing for the prospects for successful Kuwaitisation, Sadek Jafar suggests that "more than the nationals in other Gulf countries, the Kuwaitis are well-educated and travel extensively, not to mention the government sponsorship of overseas education, which applies to both men and women. As a result people here are more open and have more international exposure. There are fewer Indian expatriates here than in the UAE, for example, and these are more likely to be labourers than managers. Otherwise the expatriates are Egyptians, Syrians, Jordanians, Lebanese - other Arabs."

One of the main drivers in increasing Kuwaiti participation in the private sector has been the creation of a 'social allowance' or extra pay for nationals. Five years ago, 98% of the Kuwaiti workforce was working in the Government sector, and there were only about a thousand Kuwaitis in private industry, and they were mostly in banking. Things are changing now that the private sector pays better - there are now around 14,000 Kuwaitis working in private companies. "There has been a big increase since 2000," explains Sadek Jafar, "and last year there were only 7,000". This has mainly been the result of the 'social allowance' initiative. For example, a high school graduate can earn 250 KD in a government job, which used to compare badly with 150 KD in private industry. But now he or she can get an extra 200 KD 'social allowance', and in this respect, pro rata, the private sector is paying 30-50% more than the government. Brian Dawes of Ahlia Industrial Projects mentioned the two-tier salary structure at his company, including the social allowances paid, adjusted according to the age, educational and marital status of employees. Numbers of Kuwaitis in private industry are expected to continue to rise, but perhaps more slowly than the doubling over the last year.

Meanwhile around 10,000 fresh Kuwaiti graduates enter the workforce every year, from Kuwait University and from the diploma programme of the Public Authority for Applied Education and Training. "The majority are still looking for a government job," explains Sadek Jafar, "but now there is more prestige in the private sector. Everyone can get a job in government which is very secure, but not everyone wants that anymore."

Historically, the banking and telecommunications industries have employed the most Kuwaitis - over 30% over the last few years - with government quotas on Kuwaitis in these businesses in place since 2002. These have just been increased, a month ago, to 50%. Fines are imposed for non-compliance, and organisations not meeting the targets cannot submit bids in government tenders. "Most private sector companies struggle to meet their 2% quota," argues Alghanim HR Director Andy Finch. See table below:

Extracted from: Council of Ministers Resolution # 955 of 2005 Fixing the Percentage of National Labour with the Non-Governmental Authorities & Parties

Issued on: 30th Rajab 1426 A. H.
Corresponding to: 4th September 2005 A. D.

Prime Minister Sabah Al Ahmad Al Jaber Al Sabah



The Kuwait authorities are also looking to encourage localisation through insisting that organisations fill specific jobs with Kuwaitis (see table below). "But these are not the job areas we need to fill," Brian Dawes argues. "We need qualified chemists and engineers who can have a career with us. We can easily get receptionists, secretaries and messengers. If we take Kuwaitis for these jobs and they are paid only 200-400 KD a month, they want double this amount." It seems that the Manpower unit does not consult employers in drawing up its tables of requirements, and that there could be more liaison between schools and universities and industry in developing young Kuwaitis for jobs in the future.

Extracted from: The Fixed Percentage of National Labour Applicable to Jobs and Professions at Non-Governmental Authorities and Institutions, where the number of employees in each institution is more than 100 labourers



"We have around 8% Kuwaitis, but can only count around half of those as the other half still have their jobs in the Government or are still on their payroll," explains Brian Dawes. This refers to another of the continuing attractions of the state sector: the possibility of 'doing your own thing' on the side. Many Kuwaitis work in ministries and government departments and have other jobs in the private sector, and/or own and supervise the operation of their own businesses. Government offices were and still are highly overstaffed and there is not always a lot of work to do. All graduate Kuwaitis can still get jobs in the Government, as a right, and can retire on pensions after only 25 years working. Retirees can get a private sector job after leaving the Government.

The attitude to Government jobs attracts widespread criticism. "At Tawteen we think this is not good for society," feels Sadek Jafar. "We think people should be productive, and earn their money. This right to employment and pay without work and responsibility has caused many social problems," he continues. Thus Tawteen tries to educate Kuwaiti youth about the importance of meaningful employment, not just looking for short hours, job security with no risk of being fired, and a lot of money. "We want to create the need for productivity, achievement and passion for their jobs - which in many ways is something new for Kuwaitis," explains Sadek Jafar. According to Andy Finch, many of the Kuwaitis in the ministries want to be traders, but see this more as a status and prestige thing than a money making exercise. They are, for the most part, not interested in large-scale enterprises with a long pay-back time, adds Brian Dawes.

Some private sector employers don't want Kuwaitis - why should they hire them? "They can be seen as hard to manage, can't be disciplined or fired and they know it; they avoid long working hours, complain about low pay and are often unproductive", Sadek Jafar admits. Andy Finch of Alghanim adds, "Kuwaitis don't like the hours, the six day week, and the more rigorous discipline in the private sector. Some also feel unwelcome as a minority and suffer discrimination." Brian Dawes suggests, "not only the point that most Kuwaitis don't have the skills we need but - the biggest issue - is probably one of a lack of motivation. I interviewed a young Kuwaiti for a sales job and he turned up in a tee shirt and knew nothing about our company. He had not even looked on our website. I spent five minutes with him then gave up."

To attract more Kuwaitis into the private sector is a major challenge. After all, 14,000 of the 950,000 Kuwaiti population works out as only 1.5%. If we count the Kuwaiti workforce as no more than 250,000, given the large numbers of young and old people - this is still only 5.6%. Andy Finch feels that many of the perceived negatives of the private sector need to be removed, and companies need to "provide better induction and support, higher salaries to compensate for the fact that in the ministries they have the evening free for a second job, and better training." The current education system in the country, with virtually no practical workplace preparation, also doesn't help, argues Andy Finch.

Brian Dawes spoke of the efforts made by Ahlia Industrial Projects to attract Kuwaitis, by making presentations to the Kuwait Society of Engineers and the Manpower unit of the Ministry of Planning, by creating a career fast track for them, and by taking interns. "We take on about eight students per year on work experience placements at the factory," he explains. "We take a few of them as employees, but they come to us half way through their studies so they still have some time to go before they leave college. We do as much as we can here, but there are more important issues like professional qualifications, mindset and work ethic to take into account."

There are some hopeful signs. Considerable progress has been seen in the HRM function in recent years in Kuwait, suggests Sadek Jafar. "HR departments are now more developed, especially during the last five years. I've been with HumanSoft - founded in 1995 - for eight years, and I've really noticed a growing professionalism in HRM, recruitment and training. HR in organisations is looked at much more seriously now." This could lead to more meaningful localisation, he feels.

But how about the role of education? Although Government support of Bachelor's degrees overseas has made a big difference, most students studying for their MBA are paying for themselves - this is certainly true at Kuwait Maastricht Business School, offering the only private, international MBA in Kuwait, where most of the students are Kuwaitis. It is not yet common for employees to be sent on higher education programmes, although there are a few notable exceptions.

Overall, in spite of some progress, the future outlook for Kuwaitisation is "fraught with uncertainty and indecision," considers Andy Finch. And what of using the potential value of Kuwaiti women in the workforce, especially now they have the vote? It's clearly still early days yet...