Talent Attraction and Retention in Middle East Workforces

Introduction

Middle Eastern countries are presently facing new challenges in attracting and retaining talented employees due to the many changes wrought by globalization and a talent shortage in the workforce — both in present and future terms. Research reveals that the looming shortage of talent in the modern workforce is viewed as vital as battle logistics in any war, and this is evidenced by the titles assigned to articles and reports reviewing this subject.

The purpose of this study is to ascertain the processes and methods that Human Resources professionals will be required to utilize in attracting and retaining top talent in today's Middle Eastern organizations.

Purpose of the Study and Research Questions

The study is guided by the following research questions:

1) Are organizations in the Middle East prepared to deal with the present and coming shortage of talent in the workforce?
2) What has been done to address the talent shortage in the Middle East?
3) What may be done by organizations to address the talent shortage in the Middle East?
4) Are there structural barriers present in Middle Eastern organizations that worsen the talent shortage problem?

The importance of this study lies in the knowledge that the research will contribute to this area of study, given the critical nature of talent attraction and retention in Middle Eastern organizations at this time and in the near future. The methodology will be qualitative in nature, conducted through an extensive review of current peer-reviewed academic literature as well as through a survey and questionnaire instrument designed to inform the researcher about what is most important to individuals considered "top talent" in today's workforce. Participants will be a sampling of college graduates or those nearing the completion of their college degrees.

Literature Review: The Global War for Talent

A recent article entitled "The War for Talent" states that with the economies of the Persian Gulf growing at such a fast rate, "a war is being waged throughout the region's corporate corridors for attracting suitable candidates seeking employment and retaining current employees with jaw-dropping compensation packages" (Iran International, 2007). The situation was said to have been created by the "stunning pace of economic growth," which effectively produced "a situation in which all companies are vying to maintain their valued employees who have valuable knowledge and functional sophistication" (Iran International, 2007). This has resulted in what is termed "an alarming upsurge in salary levels" (Iran International, 2007). These salary increases, however, are primarily at the lower skill levels — particularly in the 25 to 50% range — while higher-level skilled employee salaries have grown within the normal 10 to 12% range over the past decade. Competition for skilled labor is described as "intense as countries push ahead with ambitious economic development plans," and this represents a time of great opportunity for executives "to shape company decisions and have a tangible impact as compared to larger firms" (Iran International, 2007). One factor noted in this report is what is termed "the sub-continental pull." The report concludes that if companies are to retain employees, they must join the movement of offering "timely career opportunities" and become "much more responsive with their policies towards remuneration and reward in order to attract and retain the most talented professionals" (Iran International, 2007). Companies must place talent management and employee development at the top of their corporate priorities. Problems are expected to arise "as expatriates decide to move out of the Persian Gulf region or as local talent fails to increase talent supply" (Iran International, 2007).

The report entitled Preparing for the Next Battle in the War for Talent states that "data indicate that the demand for workers soon will dwarf the available supply; within a few short years, experts predict a global talent gap of nearly 23 million as a result of a 'perfect storm' of converging factors. This conundrum will encompass all levels of talent regardless of industry or location" (Kelly, Marquez, and Russell, 2006). These authors identify four major trends reshaping the global workforce:

1) Aging populations;
2) Widening skills gap;
3) Increasing diversity; and
4) Changing priorities. (Kelly, Marquez, and Russell, 2006)

Several factors are identified as contributing to the developing skills gap in the United States and Europe:

1) Efficiency "purges" of the 1990s and the dot-com boom/bust era that dislocated layers of middle managers;
2) Increased international competition;
3) Decreased visa issuance — once the largest importer of talent, the United States now issues only 65,000 visas annually, down from 195,000;
4) Lower math and science scores — the United States continues to lag behind the rest of the world in science and math education, meaning the skills shortage among engineers, scientists, and information technologists will be felt most strongly there. (Kelly, Marquez, and Russell, 2005)

Over the next decade, projections indicate that Europe and North America will produce and educate only 3% of the world's entering labor force, while Asia will account for approximately 75% (Kelly, Marquez, and Russell, 2006). The younger generation of talent is said to place "greater importance on trust, respect, pride, and ethics, while blind company loyalty is part of a bygone era. In the search for higher meaning, many talented workers are more inclined to join smaller companies or enter into entrepreneurial situations" (Kelly, Marquez, and Russell, 2006). According to these authors, "best-in-class organizations support retention programs that range from knowledge-based training — including cognitive, creative, reasoning, problem solving, communication, and collaboration — and alternative work arrangements to positive work environments that can attract both the younger and older generations of talent" (Kelly, Marquez, and Russell, 2006).

Key to organizational success is the presence of Human Resources executives who are "cross-culturally competent" (Kelly, Marquez, and Russell, 2006). The HR executive of the next decade is described as having the following characteristics:

1) Strong business acumen — able to speak the language of business;
2) Strategic problem-solving skills — creative;
3) Cross-culturally competent;
4) Capable of influencing top decision makers;
5) Credible and trustworthy across all levels of the organization;
6) Far-sighted and proactive talent development expertise;
7) Top leadership skills — unafraid of leading change;
8) Unassailable judgment. (Kelly, Marquez, and Russell, 2006)

Petro and Petty (2007), in the work entitled "The Looming Leadership Talent Wars and What Organizations Need to Do to Secure Their Future," state that "the recruitment, retention and development of talented workers are significant issues for all organizations in this increasingly global and knowledge-based economy." They identify four implications of a leadership talent shortage for organizations:

1) The ability to execute complex strategies in a fast-moving global marketplace will be compromised by a shortage of knowledge workers and experienced leaders;
2) An investment in the retention of talented leaders will become table stakes in this emerging sellers' market for experienced professionals;
3) Younger, less-experienced workers will assume leadership responsibilities earlier in their careers, often without the benefit of a veteran mentor to guide them and help prevent costly mistakes;
4) Attracting, developing, and retaining leadership talent will define a new competitive battleground where the stakes include organizational survival. (Petro and Petty, 2007)

The stated challenge for the Human Resources executive is to "establish leadership development as a core competency" (Petro and Petty, 2007). These authors report that an interview process was conducted and information derived from over 1,000 responses included the following findings:

• The identification and development of new, first-time leaders is often ad hoc, with no formal structure or approach to improve success and weed out potentially poor choices. Additionally, early-career leaders often report a lack of mentoring and support during their start-up phase — a point at which they would clearly benefit from appropriate guidance.
• Formal career planning as a means of developing and retaining talent is not widely practiced.
• The general perception among early-career professionals is that leadership is a means to an end or a normal part of "climbing the ladder," with little perspective on leadership as a distinct career choice.
• In many organizations, leadership development has not achieved a level of strategic significance. (Petro and Petty, 2007)

Suggested actions include: (1) identifying leadership development as a strategic priority; (2) ensuring that leadership development is everyone's business; (3) facilitating new leader identification and development; (4) institutionalizing career planning; and (5) treating leadership as a distinct career choice (Petro and Petty, 2007).

Leadership must be developed with the capacity to take on new responsibilities for attracting and retaining the best talent. Jonathan Otterstatter, Executive Vice President and Chief Technology Officer at SPSS, Inc., is noted as having stated: "The single biggest influence on employee development is the desire of the current company leaders to develop more leaders. Although most managers understand that one of their responsibilities is to develop employees and leaders, few are genuinely interested and sincerely engaged in developing a subordinate to the point of displacing themselves" (Petro and Petty, 2007). The benefit of organically building leadership within the organization is a "readily available pool of future leaders" (Petro and Petty, 2007). These individuals are taught the business from the ground up, have a thorough understanding of the firm's culture and values, and are experts in both products and services, with deeply rooted "institutional knowledge" (Petro and Petty, 2007). A four-step model stated to assist new leadership development in achieving success is as follows: