Time to hire untraditionally
Should the GCC nations be looking beyond traditional borders to plug its widening skilled labour gap?
Jim Freeman, managing director of Freeman Consultants, examines whether the GCC should be looking beyond traditional borders to plug the skilled labour gap.
The skilled labour shortage is never far from industry headlines. What is driving it?
The skilled labour shortage is quite serious. In simple terms, the construction boom is the driving force. Labour companies in India, Pakistan, Bangladesh and Southeast Asia are continuing to churn out the workers, but they are also careful to keep a certain amount of skill at home because they have a growing construction boom there.
This leads to a situation where the remaining skilled labour is spread very thinly across the GCC countries.
Is any particular GCC country competing with the UAE for the skilled labour that is available?
Saudi Arabia is in a similar situation. In Saudi Arabia they are bringing huge projects online, which they are saving an awful lot of skilled labour for, in order to drive those projects over the coming years. In Qatar the situation is very similar.
The unfortunate part for the developers is that they are creating their own problems with regards to supply and demand. The more projects developers bring on line, it stands to reason that the worse the skilled labour shortage is going to get.
What other factors should be considered?
The skilled labour are now a lot smarter then they used to be. They move all around the GCC countries, or simply back home. This definitely exacerbates the situation.
With the restrictive labour practices in place, skilled labourers say, "I can go back to my home country because there is a boom there, I can do a year there and then come back to anywhere I choose in the Gulf because I have GCC experience." In such a case, a labourer will usually come back in at a higher salary than he was earning previously.
Have GCC countries taken cheap labour for granted in the past?
It is definitely fair to say that the GCC has been dependent for too long on cheap labour. Now that skilled labour is more intelligent as well, everybody is aware that he is in demand. It's no longer a case of countries wanting cheap labour. It has become a market of choice for the labour force.
Can a company do more to train its existing work force to fill the gap?
There is actually quite a lack of training facilities. Some international companies have set up training camps to try and improve the skill set of their workers. Other firms unfortunately just work on body numbers. Although this does contribute to massive growth, the firms in question are not getting the cream of the crop because they are not paying very well.
Which leads us to the minimum wage issue. Would it be a positive step?
It's a matter of incentivisation. For the companies which continue to pay a relatively low wage, the argument is that the wage is subsidised by three square meals a day plus accommodation plus transport and a uniform.
The unfortunate part is that sometimes that is not enough. But then how far do you go when you employ thousands of people? If you make their lifestyles too comfortable, you run of the risk of a substantial drop in productivity.
If GCC countries are forced to look beyond the traditional bases of the Indian sub-continent for labour, which nations should be considered?
It's very difficult. There is no real answer. The only other places you could look would be places like Cambodia and Laos. At present the UAE uses a certain amount of Thai labour and a certain amount of Vietnamese labour.
However, Vietnam is now picking up, so it's not that easy to attract its workforce to the GCC. Again, if labour is skilled it costs more, but if it is unskilled you are back in the same boat whereby you have got workers that you are putting in a labour camp, and hoping that you get a fair days work out of them.
Would a country like China, with a population in excess of a billion, hold potential?
In China there are a number of companies coming in and bringing their own labour.
Some major contractors employ their own Chinese labour. In the early days when Chinese labour came in there were a few problems. Some labourers had to pay people back in their own country for the privilege of getting a job.
They were told that their employer would make restitution for them upon arrival in their host country. Of course, a practice such as this is nothing to do with the employer.
So are we looking at a case of no quick solution?
It's certainly a problem that is not going to go away anytime soon, and something that the industry is going to have to live with. What it needs to be doing is trying to identify and train up more of the labour force that is has and trying to identify those who have a little bit of spark or willingness to learn another skill.
That means setting up trade schools and putting the more ambitious through their trade courses and incentivising them to up the medium.