Nadine Hawa for CNBC, April 2008
Back in February, our colleague Eithne Treanor reported on the difficulties finding skilled personnel for the regions oil and gas sector in the article entitled Skills shortage & bottlenecks in region.
As we look at other sectors, it is fast becoming apparent that the lack of human capital in the Gulf region is a glitch that is actually sector wide.
The very rapid growth of the region’s financial sector is putting pressure on various resources. The worst hit: human capital.
Capital is abundant in this region which is reaping the surpluses of record oil prices. In the last fiscal year that ended on March 31st, the Kuwaiti Ministry of Finance posted record oil revenues of 17.72 billion dinars or $66.8 billion US Dollars.
But in terms of human capital resources are still scarce. According to Sameer Abdi, executive manager at Ernst & Young’s Islamic Financial Services Group “the biggest challenge that remains is clearly people.”
Even though business is conducted in English, Arabic speaking managers are a rare commodity. The highly sought combination of ‘local knowledge added to international skills’ is also in short supply.
One of the main reasons behind this shortage is the fact that many of the products and services offered in today’s financial sector are new areas of expertise to this part of the world which hasn’t yet acquired the experience mature markets and developed economies hold.
Added to that, the depreciation of the US dollar against major currencies such as the Euro or the British pound has made it increasingly difficult to lure professionals from Europe and other parts of the world.
Abdulaziz Al Hinai, Advisor to the Oman Development Bank told CNBC that in his opinion the biggest challenge faced by the financial sector is “the competitiveness from our side because the region is very open to all kinds of institutions in financial services. The challenge is how to develop a product that suits the region, instead of importing products from all over the world that do not necessarily suit us. And to be able to do design products for the region, those products need to be designed by indigenous people. So the biggest challenge is to find the right people, the right human capital for financial services.”
As the financial sector grows, so does the need for skilled individuals to support that growth. According to a recent study by AT Kearney management consultants, Islamic banks in the GCC will need to find people to fill 30,000 new positions over the next decade.
And as more and more skilled individuals come to the region to tap that sectoral growth, it in turn helps the sector grow even further.
As stated in Skills shortage & bottlenecks in region, in the Oil and Gas industry where engineers need to make quick decisions in a sometimes highly dangerous environment, companies have started to launch “a virtual reality environment to assist with the training and development” of their staff.
In the financial sector, where billions of dollars may be at stake, the solution is slightly different.
As cliché as it may sound, education is key. the major focus is put on education and the cooperation between local universities and financial instructions. One example is Lloyds TSB which has created sponsorship programmes with local universities in order to tap into fresh talent.
Human resource planning is also an important part of the puzzle that has been overlooked. Many banks in the region still do not have human resource planning.
Finally, companies must evidently offer attractive salaries and hefty benefits schemes to ensure retention as they battles to stay competitive with global business hubs such as New York, London, or Hong Kong…because once you find that talent, you want to make sure you keep it!