Training & Development Critical to MNC Success in Middle East

With the global economy on its way back up, many multinational corporations (MNCs) are expanding their presence in the Middle East. However, compliance with Nationalisation policies will require broad recruiting efforts for local talent. The transition from a local company to an MNC will require that a robust training and development plan, and the right people, be in place as a key strategic element of any MNC’s growth plan.

Over the last few years of the global economic downturn, many MNCs downsized or eliminated their presence in the Middle East. With the downturn easing, an expansion of activity in the region is being considered in boardrooms all over the world due to the centrality of the region. Indeed, some companies group the Middle East with European countries to form an EMEA (Europe, Middle East, and Africa) regional business; others with Asia to form an AMEA region. Countries such as Dubai, Saudi Arabia, and Qatar are back on a growth path as a central zone for both European and Asian regions. These factors and more make it a great time for top HR talent to consider a move to the Middle East. A successful tenure in this region adds international gravitas and credibility to any executive’s CV. However, it’s imperative that a strategic human capital plan take into account several key factors to succeed in this unique region of the world.

Nationalisation and the Challenge of Local Talent

Due to the influx of expatriate talent in many Middle Eastern countries, national governments have responded with policies that set a standard of employment for local workers. These policies, known collectively as Nationalisation, set a minimum standard of 40% representation of national representation at each level. At the very senior level, most positions are held by expatriates, however this presents a couple of real challenges when formulating recruitment strategies.

First, the talent pool for nationals will likely come from local companies, most of which are family-run. There are massive cultural differences between HR practitioners in these environments and of that expected in an MNC environment, particularly involving scale and strategic thinking. This makes the pool of local talent with direct experience very limited, and those locals with international MNC experience are in high demand. Indeed, while these hiring standards may be winked at in some specific fields such as engineering, they are strictly adhered-to in shared services such as HR.

Secondly, pay scale can be a challenge as government agencies in many countries typically pay 40% more than private industry. Obviously, with nationals preferred for these roles, this disparity in pay can create a talent drain that increases the challenge of Nationalisation.

And finally, achieving mandatory hiring goals for nationals may slow proportionate hiring for expat talent. Because it’s mandatory to maintain these 40% ratios, the ability to hire the three expat managers needed to lead a team may be held up by the requirement of finding the two local team leaders. Therefore, it’s mandatory to have a smart recruiting plan for growing teams in this region.

Strategic Importance of Talent Management

A primary tactic in winning the battle for local talent is an outstanding training and development program. “This is a key initiative that companies can drive to ensure local talent are trained up to embrace the global MNC corporate culture,” says Rhona Moodly, previously head of Talent Management for an Investment organisation in Abu Dhabi.

An MNC’s ability to bring in local talent and develop them to meet the standards of the MNC creates a win-win for both the corporation and the talent. Local candidates receive the top-flight training needed to compete in the global marketplace, and to perhaps even move into leadership positions. The MNC also wins through attracting a pipeline of local talent, not only improving their ability to meet the 40% standard but attracting those keen to pursue a higher degree of knowledge in HR practice. A side benefit of an appropriately-resourced training and development program extends to senior management as well. Moodly believes that “international companies also need to develop initiatives to keep their expat talent, particularly at the senior level where they are often disillusioned with the availability of good local talent in order to drive global strategy.” By ensuring a solid pipeline of local talent, senior management remain motivated around achievable hiring goals.

We see Talent Management, organisational development, and learning and development as areas of the HR spectrum attracting increased interest from MNCs in the region. The ability to deliver in these specialties will take on increased importance as the Middle East attracts increased investment and strategic focus in the short term.