Rethink of Emirati workforce quotas

Subsidies will be given to private companies for training to improve Emirati employees' skills and raise their pay to match public sector.

Sheikh Nahyan bin Mubarak, the Minister of Higher Education and Scientific Research, says Emiratis could provide great benefit to the workforce and that the private sector should disregard stereotypes of them.Show less

ABU DHABI // Long-running efforts to impose Emiratisation quotas on private companies could eventually be scrapped, and the Government will offer subsidies to companies to encourage them to hire and keep Emirati staff, the head of Abu Dhabi's Emiratisation efforts said yesterday.

Abdullah al Darmaki, the general manager of the Abu Dhabi Tawteen Council (ADTC) did not give a timeline for the phasing out of the quota system, but suggested it would happen as more Emiratis become qualified enough to enter the private sector. The subsidies would start immediately, he said, adding that companies would use the money to train their Emirati employees and help them gain a foothold in the private sector.

The funds would also allow the companies to match the salaries offered by the public sector. "When you look at the financial model of a certain sector and you realise that the implication of hiring an Emirati is very high, this is where we look into; over a given limited period of time, the Government will subsidise the salary," said Mr al Darmaki. "If any targeted financial support is required to enhance Emirati productivity and skills, we will consider it on a case-by-case basis."

Currently, private companies in certain sectors are obliged to employ a certain number of Emiratis. However, these companies say it is difficult to find suitable candidates, and that these employees often have unrealistic expectations in terms of pay and promotions. Closing the wage gap would also remove what officials say is a barrier to luring nationals away from government jobs. Mr al Darmaki stressed that any subsidy provided to bring the wages of an Emirati employee in the private sector in line with the public sector would be reduced over time until the employee had enough experience to deserve a higher salary.

"The subsidy will be a contribution - and that's a diminishing contribution - and after that you would expect during that period of time that the individual would have attained market knowledge and value to be able to ask for what is being given an Emirati" in the Government. Mr al Darmaki denied that government policies, such as the recent announcement that Emirati federal workers would receive a 70 per cent rise in basic pay, had exacerbated the issue of wage differences.

The UAE was simply aiming for high quality governance that needed proper compensation, he said. The quota system requires some business sectors to employ a certain percentage of Emiratis. For instance, a law issued in 1996 requires that four per cent of banking sector employees be Emirati. The law also stipulated that this percentage should increase by four points every year, up to 48 per cent. On average, however, Emiratis make up just four per cent of the private sector workforce, compared to 52 per cent of public sector one.

Mr al Darmaki defended the quota system and said companies rarely faced punitive action if they did not meet their quota. "There are some countries where it's a rule of thumb, otherwise you don't get a licence or you don't get to renew the licence, and other countries say you don't need that," he said. "In the UAE in certain sectors it is working fine, in other sectors it is not necessarily applied as such because you need to make sure you have the qualifications and competency, you have the pool of people willing to work there."

He said the Government would review the quota policy if it decided that it had failed to achieve its goals, and suggested that it could be removed eventually. "Our quota is only there for a limited period of time, I believe," he said. "Once the education system takes care of itself, and once the employers do find the competence within [Emirati] individuals, you don't need a quota." Mr al Darmaki was speaking on the sidelines of the Emiratisation Employer Forum 2010, a two-day gathering of policymakers and private sector employers in the capital that began yesterday.

The authorities hope that some of the measures proposed at the forum will reduce the Emirati unemployment rate, which has reached 14 per cent in Abu Dhabi and is higher among women and in rural areas. They also want to address educational concerns. As many as 35 per cent of prospective employees in the ADTC's database only have primary school education or less, and almost 80 per cent have no university qualifications.

Addressing the forum, Sheikh Nahyan bin Mubarak, the Minister of Higher Education and Scientific Research, made several recommendations to companies trying to attract Emiratis. He also appealed to private sector employers to help convey the importance of seeking employment outside the Government. "You know that too many of our young citizens want to work for the Government; too often they are not willing to work in the private sector," Sheikh Nahyan said.

"One reason for this is that our young people have very limited opportunities to understand the world of work. They enter secondary schools and universities without understanding what it takes to be successful in a modern employment situation. "Too often they do not understand their own interests and talents that can help them find satisfying work at which they can succeed. I ask that you help us find ways to provide that understanding."

Sheikh Nahyan suggested this could be done through expanded internship and work placement programmes. He also said it was important to disregard stereotypes of Emiratis that exist in private sector. "You will see that these students have the ability to do independent work and to work in teams. You will see how they understand the conditions in the labour market and how to work with people in a multicultural society," Sheikh Nahyan said.

He called for the creation of an "employment information exchange" that would make information on careers and job openings in the private sector easily available to nationals. [e-mail]