Critical Success Factors for an Effective Nationalization Strategy

GCC countries have long recognized that dependence on a large expatriate workforce has serious long-term political, economic and social consequences. However, little has been achieved in the private sector. So far, the private sector’s response to nationalization has usually been to resist and if pushed hard, by government, it will be with small-scale programs as quotas system. However, recently, very few leading private sector companies recognized its role in the national labor market, and hence nationalization for its economic, political and social consequences.

The top critical success factors for an effective nationalization strategy

Generally speaking, success stories indicates that such factors should emphasizes leadership’s commitment and faith, company’s HR policy and procedures to be adapted and adopted to nationals’ need, government economic and administrative support, society awareness and support.

The private sector has established the objectives of the nationalization plan in three ways

1. Economic: Maximize resource utilization, utilizing nationals for such jobs as tourism.

2. Social: more obligations, part of their CSR. CSR can be defined in many terms, however, for the sake of nationalization, it can be viewed as a business company’s intention, beyond economic obligations, to do the right thing and act in ways that are beneficial for society

3. Political: The private sector is, just as any other economic sector, expected to support the government polices, and nationalization is just one of these policies. It is important to their business as it will lead the whole society into a clear road map for one-way vision for the country . Businesses can also have some benefits from such support as exemption from tax, etc.

What works and what doesn’t

The following do NOT work when it comes to revealing progress on existing strategies:

1. Meeting quotas.

2. Recruiting: Some private sectors as Banks recruit nationals for easy roles that does need long-term investment and T&D for employees such as cashiers or tellers. Such methodology is not sustainable and what happens is that these banks lose nationals, who become bored of their routine tasks.

3. Career fairs.

4. Targeting graduates.

What DOES work:

1. Maximizing strategic value of nationals.
This is to target talents regardless their gender or age or educational level. Current practices focus only on attracting fresh graduates, younger nationals & university graduates, ignoring elderly, high-school or university drop out and women in general. Additionally, when it comes to private sector, education doesn't matter a lot. What matters are their competencies and market skills.

2. Developing strategic value of nationals. This is basically through training and development programs (as career plan/succession plan, etc.). Nationals have to go through long-term investment in building their operational and technical skills as required by each company. Ultimately, such talent management policy will assist in retaining more nationals within the sector

The public sector can help the private sector with nationalization

Economic solutions:

  1. Setting Minimum wages for nationals
  2. Providing Wages subsidies for nationals (as national allowance)
  3. Merit & bonus system for A+ companies in nationalization efforts (e.g. tax exemption, free-interest loan, public recognition...)

Accordingly, they restructured their vision towards nationalization to be integral part of their business success.