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riding the gulf tide
gulf arab companies are on the prowl for talent to
fill managerial positions in some of their most dynamic corporations.
egyptian executives lured by attractive salaries and the opportunity
for advancement are responding to the call. but why now and what
does it all mean?
by rehab el-bakry
it came as something of a surprise when mobinil ceo osman sultan
announced in october that, after eight years with the cairo-based
telecommunications giant, he would be leaving to join a new mobile
operator in dubai. sultan, however, was not alone. in fact, his
move was just one of many examples of a wave of management professionals
leaving egypt for the gulf.
“[gulf countries] are seeking egyptians to fill management
positions that were previously filled by people from the us and
europe,” explains samir younis, a partner at top business,
a business consulting firm. “the typical recruits today are
young professionals in their mid-30s who have an excellent education
and several years of working experience in the egyptian market at
the management level.”
but step back 30 years. in the 1970s and 1980s, the gulf was a big
lure for egyptian unskilled labor, fresh university graduates and
low- to mid-level professionals. by the mid-1980s, an estimated
3 million egyptians were working in the gulf in all sectors, earning
salaries that dwarfed what their counterparts back home earned.
remittances reached as high as $18 billion per year and were a major
source of hard currency for the country.
hany mahmoud, vodafone egypt’s hr and legal affairs director,
recalls just how big the salary discrepancy became. “i remember
very clearly when i first graduated and joined xerox egypt. at the
time it was everyone’s dream to join a multinational company
because they paid well,” he said. “i was getting paid
£e 258 a month, whereas someone with the same qualifications
working in the gulf was making between £e 2,000 and £e
3,000.”
it all came to a crashing halt in the early 1990s. the eight-year
iran-iraq war ended and egyptians headed home as iraqi soldiers
returned to reclaim their jobs. the remainder of the 2 million egyptians
working in iraq were forced to return home following iraq’s
invasion of kuwait in august 2000 and the buildup to the first us-led
gulf war. egyptians working in saudi arabia also found themselves
on homeward flights as the kingdom’s employers, enforcing a
nationalization policy, did not renew their contracts.
meanwhile, the egyptian economy was picking up. the switch from
a socialist regime dominated by public sector companies to a market
economy with a vibrant private sector created new opportunities.
bright, talented executives were in high demand.
“a number of big local companies were established with good-quality
products and services. these companies quickly realized the importance
of hiring people with the right qualifications even if they had
to pay them more because it would help meet business objectives.
many of these companies recruited egyptians who had worked in the
gulf and gained experience and exposure,” explains mahmoud.
changing tides
the economic slowdown of the late 1990s and the collapse of the
egyptian pound at the start of the 2000s set the stage for a fresh
exodus of egyptian professionals. once again, gulf salaries became
highly attractive.
“about three years ago, the exchange rate went from £e
3.48 to the dollar to £e 4 to £e 5 to £e 6 and [briefly]
settled at £e 7,” recalls samaa sabry, a partner at people
plus recruitment agency. “this meant that the [foreign] packages
that were previously similar to what people were being offered in
egypt doubled because of the exchange rate. this made a lot of people
reconsider the idea of going to the gulf, an idea which five years
earlier they refused to consider.”
ahmed shaheen, chairman and managing director of premiere egypt recruitment
agency, says egyptians trying to advance their careers face a bottleneck
at the managerial level. “the fact is, the higher you make it
up the corporate ladder, the harder it becomes to find packages that
offer both good salaries and a [further] step up the ladder. today,
people who have good positions in good companies are holding on to
them with all their might. this means that people have limited opportunities
to move up the corporate ladder because chances are their bosses are
facing the same predicament.”
this has left ambitious egyptian executives with few options other
than to seek opportunities in other markets. as luck would have it,
just as egyptians began reconsidering the gulf, the gulf began reconsidering
egyptians.
in the past, the biggest recruiting countries in the region were saudi
arabia, kuwait and iraq. today it is the smaller gulf states of uae,
qatar and oman that are headhunting for foreign talent. saudi arabia,
which has begun to diversify its oil-based economy, has resumed its
traditional role as a leading recruiter, offering some of the most
attractive salaries and benefits in the region.
“nowadays, everyone wants to go to dubai followed by abu dhabi
and lately qatar,” explains sabry. “these states don’t
only offer good financial compensation, they give people the chance
to have a life in the sense that there are things to do and places
go. saudi arabia, on the other hand, is not always popular with people
because of the social constraints. often their wives don’t want
to go there. on the other hand, saudi arabia offers the most generous
packages by far.”
but the sectors that are recruiting have also changed. previously,
doctors, engineers and oil workers were in high demand. with crude
oil prices still hovering in record territory, the petroleum sector
continues to draw labor from egypt. yet since the 1990s, gulf countries
have worked to diversify their economies, investing heavily in the
telecommunications and it sectors, as well as banking and financial
institutions. their corporate headhunters are always on the prowl.
“it’s not that the other sectors no longer recruit, they
just don’t recruit as heavily as they used to,” explains
shaheen. “countries in the gulf have experienced a shift in sectors
just as we have in egypt with several new sectors such as telecoms,
it and finance gaining a higher significance in the market over other
traditional sectors such as engineering and medicine.”
the telecoms sector in particular has experienced enormous growth
since the late 1990s and has become the region’s most active,
if not competitive, recruiter. “in the past year alone, there
have been new [gsm] operators in saudi arabia, bahrain, qatar, oman,
sudan and dubai,” says mahmoud. “all these operators need
highly qualified people and they simply don’t have the population
base to fill all the openings domestically, nor can they afford
to fill them all with [western] foreigners. that’s why egyptians
are a great option right now not only for the operators, but also
for companies providing support services such as content and programming.”
skimming the cream
companies in the gulf usually have the financial clout to pick
the people they want, says younis. “one thing that distinguishes
the recruitment pattern in the gulf is that they know exactly what
they are looking for and they are willing to pay generously to acquire
it. they are not going to recruit a mediocre performer from the
egyptian market when they can recruit a highly qualified one.”
the fact that as of late gulf companies have been recruiting from
egypt speaks volumes about the quality of the egyptian labor pool.
“egyptians are no longer being recruited for the junior positions,
but instead are occupying strategic positions within the companies
they are joining,” notes mahmoud. “instead of them taking
the lead from foreigners, they are now expected to be the ones showing
others the ropes.”
younis explains that expatriates are hired for the experience they
can bring to the company. “these recruits are then expected
to set the basis for the work flow and teach nationals how to do
the job. unlike the case in the past, they are there for a limited
number of years and it’s expected that they will then be replaced
by nationals.”
increasingly, gulf states are implementing nationalization policies
designed to protect the jobs of their citizens. saudi arabia and
oman, for instance, require top-level positions such as chief executive
officer and chief financial officer to be filled by nationals.
“most of the gulf countries are required by law to seek out
locals to do the job before they recruit from abroad,” explains
younis. “this means you have a large number of potential recruits
from egypt and other markets in the region competing for fewer jobs.”
it’s not as bad as it sounds, assures sabry. egyptians have
two major advantages over european and american competition. for
one thing, it is still more economical for companies in the gulf
to recruit from egypt than it is to recruit from other markets.
“simply put, egyptians are better value for money,” she
says. “even with the very generous offers employers are making,
they are aware that if they were to try to recruit foreigners for
these jobs, they’d have to pay a lot more than they are paying
egyptians.”
the second edge egyptians have over their counterparts from north
america and europe is the arabic language. mahmoud says this advantage
is not to be underestimated. “the arabic language is a great
added value to our people because they can communicate with the
locals easily.”
native arabic speakers are able to adapt quicker to the working
conditions in the gulf and relate better to their colleagues and
clients. “when you have a foreigner, they will obviously have
a much harder time communicating with their team if they don’t
speak arabic,” he explains. “while the culture of the
gulf is different from that of egypt, it’s easier to break
this cultural barrier when you speak the same language.”
retaining employees
for individual egyptians, it might be a feather in their hat to
enter the gulf market as managers rather than junior employees or
laborers, but the exodus of egypt’s best managers could have
serious implications for the domestic market.
“since these companies are offering very competitive packages,
they can afford to recruit the best in the market,” says shaheen.
“there are things however that companies in the market can do
in order to retain their employees and minimize the loss of their
investment.” for starters, he says, companies must recognize
that employees are their most valuable asset and should be included
in the company planning process.
according to vodafone’s mahmoud, the key to retaining talented
executives is to invest heavily in their training. the irony doesn’t
escape him. after all, a high level of training is what makes gulf
companies most interested in egyptian recruits in the first place.
but he points out that many egyptians would be willing to forgo
the short-term gain of a job in the gulf for the long-term benefits
of career development.
“when employees know they will receive on-the-job training and
skills development, with potential for climbing the corporate ladder,
they weigh this option against having a short-term contract in the
gulf with little or no development potential,” he says. “for
the amount of money companies in the gulf pay, it should not be expected
that they will pay more money for skills development. they are paying
this money in order to get employees that will hit the ground running.”
vodafone egypt spends about £e 15 million per year on managerial
and supervisor training, mahmoud estimates, explaining that the company’s
training package is one reason it is able to attract, and keep, talented
individuals. he says it is important that employers clarify to their
staff the extra benefits they receive by remaining in egypt. many
gulf companies, despite their attractive salaries, do not invest in
the long-term careers of their employees.
it is also important for companies to identify high-potential cadres
early on and work on giving them the tools they need in order to do
their jobs better, and develop the skills they need to move up the
corporate ladder. mahmoud elaborates that an employer’s list
of high potentials should include the names of people that can carry
the company forward in the future. the key, he says, is “to let
them know now.”
in addition, companies should develop a second line of management
to ensure that the work flow is not disrupted if key people within
the organization leave the company. “the idea of always having
one or two backups for each key position within the organization is
essential to make sure that work is not disrupted when an individual
leaves,” says shaheen. “these backups should constantly
be appraised and executives should be aware of the ‘ready status’
that is, whether [the backups] are fully ready to take over the job
or will be ready within one or two years.”
while no company likes to lose its best managers, sabry puts a positive
spin on it. “for one thing, the egyptians taking jobs in the
gulf are there as managers, senior managers and executives –
which is not something we had before,” she says. “the
other is that their departure creates movement within the organizations
they leave behind, allowing fresh blood to make its way to the management
level of these companies. this new blood could usher in new creativity
and dynamics within these organizations that could help them excel
and find new opportunities in the market. so it’s not all bad
news.”
predicting tides
the flow of egyptian managers to the gulf might be a positive note
for the time being, but the question that remains is what effect their
return to the egyptian market will have. since most of the executives
exiting the market are on one- or two-year contracts, it seems likely
they will attempt to re-enter the market in the coming years –
only to find their former posts occupied.
sabry says it is too soon to say what effect this will have on the
market. “the changes that have taken place in the market over
the past five years ushered in sectors that simply didn’t exist
before and the collapse of sectors that were once among the most lucrative.
because of this pattern, it’s hard to predict whether the re-entry
of these egyptians into the market in a couple of years will mean
good news or bad news.”
shifting tides have always been hard to predict, but one thing is
certain, the return of these seasoned managers will bring fresh
perspectives and diverse experiences to the egyptian market.
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