“The Role of HR in Family-Owned Businesses: Challenges and Solutions” Samer can discuss the unique challenges and opportunities in managing HR for family-owned businesses in the GCC, drawing from his time as Group HR Director at Al Fardan Group in Qatar.
The 2nd oldest industry in the world is finding itself arguably at the forefront in enabling many of the national economic visions across the GCC region. Many residents or visitors can attest to this after seeing the significant number of cranes erected across the skyline to support the myriad of projects ranging from:
- Oil & Gas, industrial, infrastructure in Basrah,
- Residential & hospitality in Dubai,
- Residential & industrial in Abu Dhabi,
- Residential, hospitality, infrastructure, and FIFA World Cup stadiums in Doha,
- (10x all of the above) in Saudi Arabia with Vision 2030.
Against this backdrop you might think that Construction companies operating in the region might get a pass from governments on nationalization and talent development. Drawing from my personal experience as CHRO for a leading construction business in Saudi Arabia and Shell’s lead HR secondeee for a newly formed Joint Venture tasked with developing large-scale Industrial Brownfield and Greenfield projects in the south of Iraq I can tell you that this thinking would be flawed.
In Iraq, the ability to absorb 5,000 nationals was a license to operate – These nationals were not selected by the private joint venture but rather they were seconded to the newly formed joint venture that had a multi-billion dollar scope in construction projects and was limited to 10% expatriates to deliver on the business plan which of course included developing the nationals who spoke little to no English. This of course meant that Talent & Development was critical to business success so we needed to establish a training academy to immediately assess and upskill their competencies, starting with English. Looking back, the venture has been a success and many of the nationals have developed their knowledge, skills, and confidence to replace many of the expatriate workforce and has become a beacon of success as the 1ststate privatization in Iraq in over 50 years. Without the ability to attract and retain the nationals early on the venture would have never gotten off the ground to commence operations and today see a significant reduction in gas flaring and record profits for the sovereign nation as it rebuilds it’s country following years of war and carnage.
In Saudi Arabia, it was a similar license to operate context and I learned this first-hand when I was personally unable to obtain my residence permit for 3 months because of a ‘Red’ Nitiqat company status for failure to meet the nationalization quota and so my family was unable to accompany me on the assignment by the start of the school term. Setting aside my own personal circumstances, this adversely impacted on the ability of the company to operate as we could not mobilize the required capabilities to deliver our core projects on time and within budget.
Additionally, the commercial terms were lump sum versus cost-plus, so the company shouldered the risk in terms of labor cost estimation which of course does not take into account development roles needed to ‘Build’ your national workforce.
The efforts around Talent & Development certainly helped elevate the Nitiqat status of the company and allowed us to deliver on various large scale projects across the kingdom in support of Vision 2030. I bare witness to this after a 5-year hiatus from Saudi Arabia and recently come back on a separate consulting assignment with the Saudi government and was impressed at the level of development that has taken place as a result of construction activity since I left – Truly remarkable to witness the before and after growth of this sovereign nation which has now paved the way to enable other ambitions (i.e., Tourism).
Insights to develop a sustainable national workforce strategy in the construction industry in the GCC:
- Develop a workforce, nationalization, & resourcing plan with a ‘Buy-Build-Borrow’ designation against each role that will facilitate the achievement of the required Nitiqat status (~12%) to operate the business.
- Create a sense of urgency and buy-in amongst the leadership brass on the plans so that the organization will get behind the mandate and work closely with the Recruitment and Training teams on efforts to attract, develop, and retain the nationals needed to achieve the elevation required.
- Create opportunities for nationals by demobilizing expatriates that are occupying roles with a robust national supply available in the local market (i.e., Admin, HR, professional).
- Encourage the formation of Talent Network Groups (i.e., National Female, National Engineers, National Foreman/Superintendents) to enhance affiliation, networking, and a sense of community.
- Implement a formal coaching & mentoring program to guide nationals in navigating their career in a sustainable way.
- Implement secondment agreements with affiliate companies to broaden exposure and development in multi-disciplinary teams.
- Implement a Talent assessment program every few years to identify future leaders and then grow them through targeted training opportunities.
- Implement regular Talent reviews to assess the health of the talent pipeline, ensure feedstock is robust, and set new graduate targets based on the employee churn and organization’s opportunity funnel.
- Implement assignment windows to ensure that talent is transitioned into new roles within a 3-5 year window) that offer growth and development opportunities that is in line with their IDP, future potential, and the enterprise.
- Implement a job-shadowing program to allow experienced expatriates to develop nationals and incentivize them in doing so with 360-degree feedback and KPIs linked to variable pay elements when national readiness is enhanced.
- Leverage talent and development strategies & tools (i.e., IDP, Talent Profiles, Talent Book, leadership development programs) to allow the organization to have a healthy pipeline of talent feeder pools being readied for progression opportunities and reviewed at each new project resourcing stage.
Challenges in developing a sustainable national workforce strategy in the construction industry in the GCC:
- Be prepared for pushback. Up to 90% of the workforce can be categorized as skilled labor with limited national supply.
- The Employee Value Proposition needs to be compelling. To attract & retain skilled nationals that are in limited supply and high demand there will need to be a compelling value proposition with Health & Safety, competitive remuneration & benefits, training, and structured career path/growth opportunities.
- The career path needs to be well defined. Within construction, the vast majority of roles at project sites are organized by discipline (i.e., Civil, Mechanical) and with a combination of skilled and unskilled labor reporting into a foreman. To attract nationals into these teams and retain them, there needs to be a hybrid training program of both classroom (i.e., lingual, supervisory, professional skills) and on the job training to develop them on a path towards Foreman, General Foreman, and Superintendent roles.
- Appointing nationals in critical Engineering and Project Management roles within the project teams to enhance affiliation amongst national workers in the site project teams and who understand the cultural nuances prevalent across the region (i.e., Najran, Jizan, Riyadh, Jeddah).
Does any of the above strategies, insights, and challenges resonate with your own experiences and what have you seen leveraged with success in your organization(s)?
About Author
Samer Khatib is an accomplished Real Estate Investor, Board Member, and CHRO with 15+ years of experience leading HR transformation change programs across multiple industries & countries to bolster talent acquisition, engagement, development, performance, and retention.
After a sabbatical to focus on establishing a Real Estate investment business in base country, returned to the region to continue working with C-suite stakeholders on efforts to lead large scale HR transformational initiatives, implement ERP systems & processes, and build & motivate high performing teams.
Currently, steering a confidential national entity in Saudi Arabia, guiding the full cycle of human resources and organizational design while also holding board member advisory roles within multiple organizations including own investment business that is focused on acquiring & redeveloping real estate with upside from a more efficient management structure.