I am frequently asked this question, is it the end of the road for ex-patriates in the GCC?

Given what is being written about ex-patriates and the economies of the GCC at the moment it is an entirely legitimate question – these articles by Simeon Kerr of the FT and Sarah Townsend of Arabian Business give a good overview of the issues. But the answer is not straightforward.

In some cases the answer is a resounding ‘yes’, it is the end for ex-patriates. But overall the picture is more complex and more dynamic than one might think.

The three cultural ex-patriate clusters of the GCC

To give an accurate answer I think we need to break the ex-patriate community down by region of origin and by what is going on in specific GCC countries. For example the experience of ex-patriate professionals is very different in the UAE to what it is in KSA.  

Broadly speaking ex-patriate professionals fall in to three clusters of origins: Western, Regional (Lebanese, Egyptian, Palestinian, Jordanian) and Asian.

What is happening to these three clusters is very different.

Twenty years ago the majority of senior talent that I used to recruit for the GCC was Western. It made sense then. And I think many ex-patriates did a great job in helping the local economies develop. Dubai is a great example of this. And yet today as a recruiter of senior level talent I rarely have a Westerner on one of my short lists.

Why is this? 

Where are the jobs of the future for GCC ex-patriates?

There is now an abundance of regionally produced talent that can do the jobs better than Westerners - for reasons of language and cultural affinity.  I think this is healthy. It shows in particular the success of multinationals in shaping a whole generation of regional talent. In particular I would point to the very positive contribution to the development of human capital in the region made by companies such as HSBC, Procter & Gamble, Unilever, Nestle, Mars and Pepsico – to name but a few.

Having said this there are still key industries such as commercial banking where there is likely to be reliance on Westerners in key functions for the foreseeable future.  There are also emerging activities such as Digital Marketing and Digital Technology where the talent will for a short period of time (5 years?) still need to be imported, particularly from the West.

My guess is that regional talent from outside of the GCC – most notably those from Lebanon, Jordan, the Palestinian Diaspora and Egypt will continue to play a critical role in the economies of the GCC. 

However opportunities will be less. Partly because of economic tightening, societal changes and the simple fact that they are outpricing themselves. 

What I have seen over the past 18 months is a significant number of Lebanese CEOs, CHROS and CFOs lose their jobs because of the tightening economy and not able to find new jobs because their salary expectations are too high and the job opportunities are too scarce. In Saudi Arabia whole layers of jobs that were traditionally held by non GCC regional talent are now being replaced by Saudi Nationals. Which, objectively, is the right thing for Saudi Arabia. 

But I have also noticed that in some cases – particularly, as it happens, with CFOs – that regional non GCC talent is starting to price itself out of the market.  For example it is often much better – in terms of cost and performance- for a GCC employer to recruit a CFO directly from Italy than it is to recruit a Lebanese, Palestinian, Egyptian or Jordanian because of outsized compensation and benefits expectations.  

The Asian professional class is one to which we all owe a debt. In the last twenty years I have seen time and time again the quiet dedication of those from the Indian subcontinent. I know how many organizations function because of the administrative backbone that professionals from India and Pakistan provide. All the signs are that they will continue to prosper and undoubtedly will find greater opportunities at the expense of more expensive ex-patriates. That said the challenge will be for greater numbers of them to break in to leadership roles where they are responsible for different nationalities. It is happening but I think there is still considerable room for growth. For this to happen they will need to develop universal communication skills and universal emotional intelligence and greater cross-cultural assertiveness.

This Forbes list of 50 Indians in leadership positions in multi-nationals and Arab companies shows it can be done.

The expat dream is over for those who are ‘superior’

So have we reached the end of the road for ex-patriates? The age of expats is over for those who come believing in their own innate superiority and the dream of the ‘expat’ lifestyle.  It is over as a significant factor in Saudi Arabia. It will however continue in the UAE for those who genuinely have something to contribute. Going forwards the recruitment of ex-patriates will be more selective and value focused.

One age closes. Another dawns – how do you see that new dawn?

 

Please share your views in the comment box below and follow me on Twitter

 

Published in Insights

Last month I wrote a blog on Will Saudi’s chairmen of 2030 need to look different from today? I have had a number of comments and discussions on this, both when I have been in the Kingdom and also online - and one comment in particular got me thinking.

 

Mohammed Abdul Gaffar of KFB Holding Group said “It is not just the chairmen who need to look at business differently from today” – and of course he is absolutely right. He continued: “The idea of Vision 2030 has to be trickled down to each and every individual in an organization. Proper communication of the Vision 2030 to everyone and encouraging participation from all groups is paramount to achieving success. Just my 2 cents.”

 

Well they are a good two cents and lead nicely into what I have been thinking about concerning the skills that will be needed for chief executives to achieve Saudi Vision 2030.

 

What will be the biggest challenges for Saudi chief executives?

In my view the toughest challenges for chief executives will be how they cut costs without harming businesses.

 

Just last week, Reuters reported that “Saudi Arabia will cut ministers' salaries by 20 percent and scale back financial perks for public sector employees”

 

Inevitably oil prices are having an impact in the Kingdom and the ability to make these tough decisions wisely will be critical for the long term success of both companies and the country.

 

But the biggest challenge is achieving operational efficiency through cuts – and also knowing when to keep innovating and investing. Great leadership is about achieving this balance and also bringing employees with you so they can see the better future in return for a more difficult time now.

Building a pipeline of skills

You might say that anyone can cut costs. The harder task is to manage through a recession and still build the skills needed for growth.

 

To do this, salaries are going to have to be more aligned to performance and – another tough decision – not reward people who have not performed. That is going to take a big culture change in many organisations, but bonuses have to be earned.

Connectivity with employees

In the next few years, chief executives are going to have to ask their employees to work longer hours and find new ways of doing things to be more efficient. Leaders need to create a team spirit of everyone pulling together and getting people to rotate around departments to learn these wider skills.

 

This is where Mohammed Abdul Gaffar’s comment is so important – leadership that will bring a future vision alive and encourage every employee to participate fully in the company.

We must not lose the existing outstanding qualities of Saudi chief executives

Whenever we look at change and new futures, there is always a danger of forgetting to identify and keep what is outstanding about the present.

 

In the case of the Kingdom, many Saudi chief executives are extremely compassionate towards their employees and often look after them secretly to ensure they are supported and they do the right thing.

 

There is also another very special attribute in Saudi leaders which the West would do well to learn from – they think about and plan for the longer term, looking 10, 20, 30 years ahead or even generations.

FT article on Paul Polman

I loved an article in the FT this weekend. When Paul Polman became chief executive of Unilever in 2009, the FT article says “He immediately said that he only wanted investors who shared his view that Unilever needed to shepherd the Earth’s future as carefully as it did its own revenues and profits. As one of his first acts, he announced that the company would no longer publish quarterly profit updates, as they encouraged short-term thinking. Simon Zadek, a long-time British sustainability campaigner….[said this was] more than just tinkering or public relations, it was a new business model.”

 

Well the Middle East is way ahead in this respect. Muslim teaching is that every individual must protect the Earth’s future and Saudi leaders take this long term vision and planning very seriously. It is not just talk but a daily reality.

 

If the Kingdom of Saudi Arabia is to create more businesses that are globally competitive, its leaders will have to balance retaining the best parts of their culture with the need for tough decisions and still investing for the future. There is a clear strategy to do this – we just need to find the leaders who can achieve this.

Published in Chief Executive

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