Nationalization Succession Strategies

Nationalization  policies are an attempt by governments to increase utilization of nationals and reduce reliance on expatriate labour. Whether, Yemenization, Qatarization, or Kuwaitization, all have one thing in common – a quota-based approach to increasing the number of nationals in employment  while reducing the reliance on foreign labour.

Expatriate Exodus

Economic growth in the Arab region over the past decade has exposed a deficiency in the supply of qualified national labour and inadequate approaches to human resource development which necessitates a heavy reliance on the recruitment of expatriates.

The rising unemployment rates amongst nationals and the need to increase the human capital contribution of the national workforce encouraged many Arab governments to embark on labour nationalization policies

Nationals benefitted from job security and large scale layoffs of nationals was never envisaged. In fact organisations juggled with tough nationalization targets and high attrition rates among nationals and therefore retention of nationals was a greater concern.

After years of incredible growth, few could have foreseen the financial crisis that was to hit the Gulf region in 2009. With the business community accustomed to making plans for expansion, the suddenness of the downturn took many by surprise. As oil prices collapsed banks stopped lending, companies across the region found themselves amending business plans and replace growth programs with cost-cutting initiatives and this meant downsizing.

While reluctant to replace expatriate workers with nationals, organisations were forced to comply with the nationalization policies of the region which prevented them from terminating the employment of nationals, except for gross misconduct.

Organisations had little choice but to cut expatriate expertise and with Arab ministries in dogged pursuit of nationalization quotas it became increasingly difficult to obtain visas secure expatriate expertise.

Competency Based Approach to Succession and  Nationalization

The requirement for key competencies shifts during the cycle of a project. The construction phase offers peak employment opportunities for national employees when this phase is completed the organisation demands a competent technically trained workforce to ensure sustainability of the operation.   

Succession planning requires identification of the competencies needed to run the business. As an expatriate expert I am well aware of my responsibility to transfer skills and knowledge that develop host country nationals, and acutely aware of the demographic trends, skill shortages and educational deficiencies that drive nationalization policies, however, this requirement has never been formally communicated to me.

A planned approach to workforce development structures the expectations of all involved, the development of a competent workforce requires both formal structured on the job training and the ability to identify the opportunity to maximize the transfer of that learning during informal interactions as opportunity presents on a daily basis. It is critical that contractors are aware of their responsibility to develop the specific competencies of their national colleagues whether the duration of their employment is limited to the construction phase or expected to contribute to the future of the operation, in both situations that individual is developing transferrable skills. The quota approach to nationalization has encouraged an either/or situation of quota versus quality and often forces the private sector into hiring and developing unsuitable individuals just to meet a target. The provision of a measurable succession and development plan indicating the competency requirements of each role and the provision for developing that competence is essential to ensuring the success of nationalization initiatives.

Read about competency framework development here: http://www.spectrain.co.uk/Managing-Performance

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2 responses to “Nationalization Succession Strategies

  1. Pingback: Our Knowledge Pipeline is Leaking! | Spectrain.Co.Uk Blog

  2. Pingback: Our Knowledge Pipeline is Leaking! | isnowready.com

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