The Gulf countries have the highest proportion of migrant workers in the world, and the immigrants send a large amount of remittances back home.1
The huge changes that have taken place in the Gulf Cooperation Council (GCC) in the past few decades have made the business world there unique. Even managers with wide experience in multinational corporations (MNCs) may be unfamiliar with the nature of the GCC workforces and business practices. In this chapter, we examine features of the Gulf workforce that have a significant impact on workplace communication. Our review will provide a background to some of the complexities of the region’s work environment.
Historic Reliance on Imported Labor
The dramatic economic changes in the Arabian Gulf following the oil boom are well known. Evolving from a region of desert tribes and small port towns with limited formal schooling opportunities for its citizens, the Gulf has undergone exponential socioeconomic change in recent decades. As the economy surged, ample funding was directed to building much-needed infrastructures. However, the region’s small and poorly educated population could not supply the labor needed to satisfy the expanding workforce. The response was to import labor from all over the globe, but most especially from the nearby Indian subcontinent. Salaries were made as tempting as needed, resulting in considerable variation determined by potential home-country earnings. These foreign workers soon outnumbered the local populations, and currently the region has the highest rate of migrant workers in the world.2 The result is a group of countries in which the local populations represent a minority within a workforce comprised of as many as 220 different nationalities.
Since the 1970s, numerous metropolises have sprung up in the region. Millions of young Gulf nationals have graduated from educational establishments into which vast sums of money are poured as governments endeavor to develop educated populations in keeping with their countries’ economic and social advancement. Many MNCs have established operations in the region, lured by the abundance of cheap imported labor from Asia, the absence of corporate or personal taxation, the unrestricted movement of capital, and the high-quality infrastructures.
Local Workforces
Over the past 50 years, mandatory school attendance and funding for further studies both locally and overseas have resulted in the various countries in the region producing a large number of local high school and university graduates. However, the natural process by which these educated locals might have been expected to replace imported labor has not occurred. Government sector positions are frequently preferred by the local populations and regarded as a suitable way for them to contribute to their countries’ development, and the private sector continues to be dominated by expatriate workers.
As the stream of local graduates increases and available public sector positions are filled, unemployment among locals has become an issue for some GCC governments. Growing populations and increasing youth unemployment in much of the Gulf have set the stage for social concerns that challenge governments in the region.3 The dual needs to provide employment to locals and to allow them to take a central role in building up their countries’ economies have been addressed by workforce localization policies directed largely at the private sectors.4 These policies, set in place throughout the GCC, have seen varying degrees of success. However, foreign labor continues to dominate to a greater or lesser degree and the issue of demographic imbalance remains under close scrutiny.5 The following sections provide a brief snapshot of localization by country.
Localization Policies
Bahrain: Bahrainization
The Kingdom of Bahrain, with a population of 1.2 million of which just over half are citizens,6 implemented its localization policy in 1989. This required private sector companies to employ a certain quota of locals and also offer them higher salaries to help ensure that private sector positions would be as attractive to locals as public sector ones. In 2006, the Crown Prince developed further labor and economic reforms, the aim of which was to curtail the continuing preference of companies to employ cheaper foreign labor and to encourage the recruitment of local workers. To enhance the competitiveness of nationals in the labor market, a training authority called Tamkeen was established as part of Bahrain’s Economic Vision.7
These reforms, however, were unpopular with business since they increased staffing costs and resulted in an increase in illegal workers within the Kingdom.8 Nonetheless, before the political turmoil of 2011, Bahrain was heralded as one of the most successful of the Gulf countries in terms of integrating its locals into the private sector.9 Following the political unrest of 2011 with its large-scale protests and strikes organized by the General Federation of Bahrain Trade Unions (GFBTU) and the subsequent declaration of a state of national security, labor reforms were modified to win support for government efforts from the influential business community. The government has also attempted to destabilize the power of the opposition-supporting GFBTU by permitting the establishment of more than one union per company. Given that these amendments to the localization policy reduce the cost of employing foreign workers and lower the minimum quotas of local hires, there is concern that they will further contribute to the mounting local youth unemployment and the country’s labor problems.10
Kuwait: Kuwaitization
In the early 1980s, the Kuwaiti government introduced the Kuwaitization policy with the aim of equalizing the national and expatriate labor forces by the year 2000.11 The 1985 Employment Bill required companies working under government contracts to employ 15 percent Kuwaitis in management and technical roles and 30 percent in other positions.12 The relatively low educational level of many locals limits their competitiveness in the job market,13 but the public sector continues to expand to accommodate Kuwaitis entering the job market. As a result, 75 percent of working Kuwaitis in 2013 were employed by the government.14
Despite over-employment in the public sector, now calculated at 50 percent, the government’s capacity to continue to employ locals mitigates the need to foster private sector employment opportunities for them. Moreover, although 40 percent of Kuwaiti public sector employees do not have high school certificates, their salaries remain attractive. Kuwaitis make up only 2.3 percent of the private sector workforce, though almost half (0.9 percent) of this figure is comprised of females, which reflects gender equity not seen in other Gulf countries.15
Oman: Omanization
Oman also implemented an exhaustive effort to localize its workforce.16 In 1996, the government launched its Vision 2020 that consisted of a threefold policy: (1) diversification away from oil revenues, (2) privatization to reduce the prominence of the state, and (3) localization of its workforce. At that time, Omanis made up 44.7 percent of the total workforce with the highest rate (52.1 percent) in unskilled positions. However, with a young population and increasing numbers of graduates entering the job market, the skills level of locals improved, and by 2001, the banking sector, for example, had reached 90 percent Omanization.17 As of 2014, Omanis made up 61 percent of the total workforce but are outnumbered six to one by expatriates in the private sector,18 a trend which is likely to continue given that in the period from December 2012 to June 2014, the private sector hired twelve expatriates for every one Omani hired.19
Qatar: Qatarization
Qatar has the highest per capita gross domestic product (GDP) in the region and the smallest proportion of nationals within its total population of 2.1 million. Despite the 1997 decree mandating that Qataris constitute 20 percent of the private sector workforce, their participation now stands at only 0.3 percent.20 It is the only country in the region in which expatriates outnumber local workers in the public sector, and localization efforts can still focus on this sector since it has the capacity to offer employment to all nationals wishing to work rather than having to involve the private sector in the employment of nationals. Qatari participation in the workforce is estimated to include 64.7 percent males and 34.6 percent females.21 In 2014, the Ministry of Labor and Social Affairs established a committee to ensure a minimum of 20 percent localization within the private sector by 2019.22
Saudi Arabia: Saudization/Nitaqat
The 2007 census calculated the population of Saudi Arabia at 17.7 million, of whom 10.5 million were of working age. The government sector employs 760,000 Saudis, while the private sector employs 550,000 Saudis and 5.06 million foreigners.23 An imperfectly developed education system has been identified as the reason for the poor preparedness of many nationals, and the localization policy has come under attack for forcing companies to employ unsuitably skilled locals who become a burden to the business community.24 Cronyism in recruitment has also been cited as a major factor in the failure to match skills with positions.25 A common view is that the country is too welfare-oriented to encourage the majority of nationals into the workforce,26 and the government has been criticized for seeming to work against the private sector instead of with it in the localization initiative.27
United Arab Emirates: Emiratization
The United Arab Emirates (UAE) represents an appealing destination for MNCs, and in terms of ease of conducting business, it currently ranks 12th out of the 144 countries surveyed in the Global Competitiveness Report.28 The country has made great strides in improving its educational systems, and its higher education system ranks 6th among the 144 countries surveyed for the report. However, its localization policies introduced in the 1990s have made little headway in increasing recruitment of locals to the private sector that is dominated by 98 percent expatriate workers. Unlike in other GCC countries, the public sector has reached saturation point; and this fact, coupled with the private sector’s preference for foreign workers, has resulted in high unemployment among locals. The government unemployment figure is 15 percent,29 but figures as high as 28 percent have been cited.30
Women in the Gulf Workforce
Interestingly, in much of the Gulf region, women frequently attain higher educational qualifications than do males and are hence seen as more desirable in the workforce. For example, of the total number of university graduates in Kuwait, Saudi Arabia, and Qatar, females represent 67 percent, 57 percent, and 56 percent, respectively. Nonetheless, largely due to cultural trends which prioritize the roles of mother and wife, the percentage of women in the GCC labor force is less than in other countries. In Qatar, 35 percent of women are in the workforce, with 28 percent in the UAE, and 12 percent in Saudi Arabia. These are low figures compared to the 79 percent of females who participate in the workforce in countries such as Norway and Switzerland.31 Another significant issue for women in the Gulf workplace is the Islamic prohibition of interactions between unrelated men and women, which means that more conservative females will avoid applying for jobs in which they may be required to deal with male colleagues or customers.
The Gender Gap Report, prepared by the World Economic Forum since 2006, assesses the position of women across four subindexes, namely, economic participation and opportunity, educational attainment, health and survival, and political empowerment. Of the 142 countries surveyed for its 2014 report, Kuwait ranks 113th, the UAE, 115th, Qatar, 116th, Bahrain, 124th, Oman, 128th, and Saudi Arabia, 130th. In terms of the specific subindex of economic participation and opportunity, Qatar ranks 101st, Kuwait, 106th, Bahrain, 126th, Oman, 128th, the UAE, 123rd, and Saudi Arabia, 137th.32
However, the Gulf is not without some powerful female figures. The current UAE Minister for Foreign Trade, for example, Her Excellency Sheikha Lubna Bint Khalid Al Qasimi, was recently ranked 42nd in Forbes’ List of the World’s 100 Most Powerful Women. She expresses a commonly held view on Gulf women’s empowerment:
The benefits of having women as agents for social change through taking a more visible role in society is not limited to paid employment […]. These women, whether they are doctors or homemakers, are on the front lines of our community in transition.33
Kuwait has seen an increase in the presence of women-led nongovernmental organizations (NGOs) that focus on improving women’s situation and facilitating their access to decision-making positions, not in the form of independent women’s rights organizations, but as a part of the National Development Strategy. Qatar is also striving to empower women and increase their participation in leadership positions. Some efforts toward improving women’s development opportunities are currently underway in Bahrain through the Supreme Council for Women. In various ways, GCC women’s voices are now heard more than they have been in the past and their role in business is undoubtedly more prominent.
Common Concerns
While the GCC countries differ in terms of their workforce make-up and the opportunities and constraints that exist, some key factors relating to the local workforces apply across the GCC.
Entitlement?
Poor motivation on the part of Gulf locals has been the catch call of private sector organizations in their response to the criticism that they are doing little to recruit and retain local workers. Much attention is focused on the fact that locals from these countries with extremely high GDPs enjoy the luxury of a range of generous social welfare benefits. This “curse of entitlement,” it is argued, has led to the development of a certain mindset in terms of how much local workers are prepared to do and for what salary.34 The economic security they enjoy as citizens of high GDP countries makes it less attractive for them to enter the private sector or engage in entrepreneurship.35 However, there is increasing evidence that a new breed of motivated graduates has sprung up in the Gulf, and they have shown themselves to be both qualified and willing to take the reins of their countries’ economic development.36
False Implementation of Localization Requirements
The government directive to recruit a set percentage of locals in various sectors has led Gulf-based companies to find ways around this obligation. Many have developed fraudulent practices to allow them to continue operations as normal and avoid penalties for noncompliance while not, in fact, fulfilling the set quotas. The UAE, for example, has seen the advent of “ghost Emiratization” which refers to the practice of paying locals a monthly sum, usually about AED2,000 (US$545) to AED4,000 (US$1,090), to allow their names to appear on the company’s list of employees even though they have never worked for the company. A variation of this practice is to offer local university students bursaries of a similar sum and classify them as employees even though no employment will ever be offered to them.37
In Oman, “fake Omanization” occurs whereby locals are hired simply to fulfill the given quota and thereby allow the hiring company to obtain a visa for a new expatriate worker.38 In Saudi Arabia, private sector companies have been found to be fraudulently registering family members as employees.39 Speculation in Kuwait is that as many as 20,000 Kuwaiti citizens are paid KD250 (US$825) per month to allow their names to be falsely included on companies’ employee lists.
Two-Tier Workforce
Localization has established a particular workplace reality that managers have to cope with, namely, a two-tier workforce consisting of expatriates who are employed within the realm of a free labor market and locals who are often employed primarily to fulfill the quotas set by governments. The imbalance between expatriate workers from countries with low income potential and local workers whose expectations are naturally higher given the considerable economic health of their countries, makes for a starkly heterogeneous workforce.
Another significant issue is that the GCC countries rarely offer citizenship to foreign residents, regardless of the length of their residence in the country; so expatriate workers have little sense of long-term security. For the majority of Asians and those of other nationalities from countries with poor economic health and adverse work conditions, the opportunity of a job in the Gulf is highly prized and represents an enormous financial advantage over work in their home countries. This sense of advantage is strongly felt, as workers in many of their home countries suffer from deteriorating conditions and rights.40 These facts make such members of the workforce highly compliant and keen to retain their positions at all costs.
On the other hand, locals are in a very different situation. As citizens, they have the right to residence regardless of their employment situation, they are often paid higher salaries as mandated by government regulation, they enjoy generous social welfare packages, and their dismissal is much more complicated than that of an expatriate worker. However, this does not mean that their experience in the workplace is more positive. In the private sector, they constitute a tiny minority within the expatriate-dominated workplace and often experience considerable alienation both from coworkers and from management.41 Many find they are snubbed and experience comments such as “What are you doing here? You don’t need the money.” Such attitudes on the part of expatriate workers reflect the concern of many of them that localization policies signal that their jobs are under threat from locals.
To further explain the ostracizing of local workers and attempts to prevent them from integrating within the organization, we can refer to Byrne’s Similarity Attraction Paradigm. This theory claims that people who see themselves as similar to each other will be more prone to like each other and become allies.42 Frequently, expatriate employees fail to identify with local coworkers since they view them as very different from themselves. Expatriate workers often engage in tactics of alienation such as withholding information, thus diminishing the integration of local workers into the workplace. For example, many locals describe experiences of their expatriate colleagues preferring to do a task rather than explaining how it is done to a new local recruit. Such behaviors make it difficult for locals to learn the job and develop a useful role within the company, thus allowing foreign workers to maintain a competitive edge and ensuring their own survival within the company. The resulting sense of alienation leads to a high number of locals resigning from private sector positions.43
Managerial Communication Within Diverse Workforces
In summary, we can identify the following two major communication challenges that managers in the Gulf face:
The enormous cultural diversity that is likely to exist within their workforce. Managers need be sensitive to the often vastly different communication styles preferred by the cultures from which their workers originate and strive to succeed in interacting effectively with these culturally diverse groups.
The frequent rift between expatriate and local workers. Managers must be responsive to the often negative attitudes and behaviors of expatriate workers toward local workers.
An additional complication managers deal with is the common practice of using communication as a carpet under which to sweep bad behavior. For example, problems deriving from employees failing to carry out instructions or performing tasks properly are often glossed over with the excuse that there has been a “communication” problem. Gross rudeness is often explained away as “some miscommunication” between the persons concerned. This tactic helps to save face, that is, to avoid embarrassment for everyone involved; as we will discuss in Chapter 3, saving face is extremely important in Arab and Asian cultures. However, ignoring such issues does not serve to eradicate poor communication behavior or to identify the issues underlying the conflict or inefficiency. Managers will need to probe further into these so-called miscommunications to identify the real causes.
For a company to be able to operate effectively, a framework of organizational communication must exist to which all employees are able to adapt. That is, there must be a communication system in place that can accommodate differences and allow each employee to interact in a supportive and effective manner. The chapters that follow explore workplace communication and offer strategies for developing and implementing effective cross-cultural communication, including real-world business cases to help managers to develop the skills they need to navigate the communication conundrum that is inherent in the Gulf workplace.