Managing the Unemployment Tsunami: Education and Workforce Development

Transcription

1 Managing the Unemployment Tsunami: Education and Workforce Development Richard J. Braxton, Ph.D., Director, Innovation Center Index Shared Services, Index Holding FLZ ABSTRACT The aim of this paper is to analyze and understand the problem of youth unemployment in the Gulf Cooperation Council (GCC) region and how policymakers can develop an education and workforce policy that addresses this critical problem. This paper provides five solutions to solve the unemployment tsunami. The problem of youth unemployment is expected to continue if the government fails to address the education development of its youth as well as narrowing the skills gap. INTRODUCTION GCC countries must embark on a holistic approach to solving the youth unemployment problem. When workers are unemployed, they affect the economy because they don t spend, and that lack of spending affects businesses. Furthermore, the government employs too many GCC nationals and too many young people expect the government to take care of them. Given the current unemployment of GCC countries, policymakers and business leaders must come together to solve the unemployment tsunami overwhelming the region. Adding fuel to the fire is the massive skills deficit of its youth. According to Al-Qudsi (pg, 8, 2005): GCC unemployment statistics feature an impressive age differential, with more than 75 percent of the unemployed as young workers, under thirty years of age. Data gleaned from Bahrain s population census suggest that unemployment incidence among cohorts aged 15 to 29 years of age represents 76 percent of the country s total. In Kuwait, the unemployed in this cohort represents 86 percent of total unemployment. The corresponding proportion in Oman and Saudi Arabia are 75 and 90 respectively. Thus the heart of the unemployment problem in the GCC countries is that the new entrants into the labor force cannot be absorbed by economic activity, which entails long-term unemployment. According to the Booz & Company study Forty-eight percent of Saudis between the ages of 20 and 24 are unemployed, as are 31 percent of Saudis ages 25 to 29. In Bahrain, 32 percent of those ages 20 to 27 are unemployed, as are 33 percent of those, ages 25 to 29. A similar situation prevails in Qatar, where 40 percent of the unemployed are in the 20 to 24 age group, as are 22 percent of those ages 25 to 29 (p. 3-4). Coupled with the high rates of unemployment in the GCC countries, and the dependence on skilled foreign workers, the actual rate of unemployment may be even higher than reported. To address this unemployment tsunami, the GCC countries need to adopt aggressive training and development programs to equip the unemployed youth with the knowledge, skills, and abilities to 66

2 compete for the job vacancies. However, training will not be enough because most of the GCC governments pursued open border policies to foreign workers, ensuring sufficient supply of labor at competitive wages at all skill levels (pg. Al-Qudsi, 2005). The true nature of unemployment is also determined by the declaration of respondents who report their employment status (Al-Qudsi, 2005). This paper is not a reflection of government action or inaction. Rather, it analyzes the current state of youth unemployment within the GCC countries and provides a framework for addressing the problem. The paper is organized into two distinct parts. First, it examines the youth unemployment tsunami facing GCC countries. Secondly, the paper offers suggestions on how government can respond to the looming challenge. The Unemployment Tsunami What is the unemployment tsunami? An unemployment tsunami is a large body of unemployed. The proposition is often put that unemployment in the GCC is voluntary in nature because of two reasons. The first is the high non-wage income of Gulf households, which enables job seekers to live off their own families. The second is related to the structure of a labor market that provides a persistent disadvantage to low-wage Gulf nationals who are competing for jobs. Thus Bolbol (2002) remarks that the argument of voluntary unemployment could be true for nationals in the Gulf countries--the so-called bourgeois or luxury unemployment... Similarly, in their study of Saudi private-sector productivity, AL- Qudsi and Abu-Dahesh (2004) remark that the entrenched welfare economy and rising aspirations of new Saudi labor market entrants have caused dramatic changes in job preferences, reflected in the refusal of new entrants to accept dead-end jobs that are dirty, dangerous, and difficult (p.14). A field study covering UAE nationals in micro-, small-, and medium enterprises found that by far the most difficult issue in employing nationals lies in their higher salary demands (37% of all reasons given). The study also found that under twenty percent of business owners who try to were successful in attracting UAE nationals in their business (Haan, 2002). The study indicated that GCC nationals became discouraged if not offered relatively high salaries. And when their salary demands were not met, they chose to remain unemployed (Al-Qudsi, 15). Or to borrow the euphemism: to continue searching. This mismatch between the expectations of nationals and the conditions of employment needs to be addressed. One of the ways the UAE has approached this issue is through nationalization programs. Although these programs increase the number of UAE nationals in the workplace, it has not confronted the growing skills gap between nationals and highly skilled foreigners. In dealing with this issue, Human Relations specialist Lisa Calicchio suggests several steps that HR people need to implement, including: (1) revamping workforce strategy; (2) improving existing recruiting and training and development; and (3) developing relationships with educational institutions, government agencies and other training organizations (HR Magazine June 2011, 70). According to a recent Booz & Company report (2010), unemployment, overstaffing, and the mismatch of skills are major issues facing the Gulf Cooperating Council region. Booze & Company identified the root cause of the GCC s challenges, which include (1) an education system that is not competitive in math and science, (2) citizens expectations that the government take care of them, and (3) ineffective immigration and retirement policies. The report presents a gloomy employment outlook for GCC citizens. The authors contend that: The unemployed represent the segment of the active population most at risk. 67

3 Discouraged youngsters don t become members of society. Their long unemployment stints are another problem, increasing the amount of training and education needed to return them to the workforce (pg. 3). Government Intervention GCC policymakers must take bold steps towards developing comprehensive policies and programs that eradicates youth unemployment. This section outlines the following five steps for developing human capital: (1) developing a workforce strategy; (2) developing and establishing relationships with educational institutions; (3) strengthening community based programs; (4) collaborating with business and industry; and, (5) treating training as an investment. One of the first steps is to develop a comprehensive workforce strategy. Workforce strategy GCC government officials and policymakers can adopt a comprehensive school-to-work programs aimed at providing: [i] qualitative and quantitative research; [ii] program evaluation; [iii] professional development; and [iv] career resources to schools, teachers, business leaders, career counselors and youth and adults. Through a series of seminars and workshops, the government can bring all of the key stakeholders together and begin the process of developing a comprehensive GCC workforce strategy. One of the mechanisms that has worked in the United States is a School-to-Work program. The School-to- Work Opportunities Act was adopted as a federal initiative in1994. According to the American Youth Policy Forum and the Center for Workforce Development (Institute of Educational Leadership), the STWOA program was designed to support and extend both state and local education reform, coupled with workforce economic development. STW programs developed and adopted the ten essential principles for improving the school experience, expanding and improving work-based learning opportunities, and building sustaining public/private partnerships. Establish Relationships with Educational Institutions Although these challenges are great, they are not insurmountable. In order to create a competitive education system, the GCC countries can adopt several cost-effective measures that will improve the overall quality of education. The first method is to adopt a standardized curriculum for kindergarten and primary students. The curriculum must stress critical thinking and problem-solving skills that would be taught by teams of teachers (one national and one foreigner). Through the use of team teaching, students will learn the importance of cooperation and teamwork. Having students work in small teams will encourage students to improve their communication and relational skills. Such skills are necessary in today s competitive economy. Finally, parents should be encouraged to visit schools frequently and establish a parent-teacher relationship that focuses on the intellectual- and skill development of the child. This sort of human capital investments is cost effective and easy to implement. Citizens have the expectation that government should take care of them, and education is the first place where government can have a positive and immediate impact. In addition to developing students, local educators must improve the quality of teachers and teacher training. Policymakers should provide a platform for nationals who are interested in education, to have access to the best teacher education programs in the world. By investing in teacher training and teacher education, the GCC will in effect begin to take the necessary steps towards improving the quality of education to its youth. 68

4 Strengthen Community-Based Organizations By promoting citizenship education, the GCC governments can take strengthen their unique role in society. They can foster greater cooperation with the unemployed youth by offering a series of civic activities and classes. Youth can join volunteer programs like keep my city clean campaigns that teaches respect for the environment as well as personal responsibility. Governments can partner with NGOs who have the capacity to reduce costs and who may have the necessary resources and manpower to develop such programs. Collaborate with Business and Industry In modern economies, the investment in human capital is often done through training. Companies that understand how to develop people s skills and talents will be the winners. With this realization, both public and private employers need to see this process of development, not as an expense, but as an investment; an investment that can pay endless dividends. Policymakers can take advantage of the large population of expatriates, by recruiting skilled tradesman who can teach crafts such as carpentry, welding, plumbing, and electronics. These tradesmen can be mentors to their apprentices. Policymakers can develop a system that emphasizes hiring skilled foreign craftsman who can teach these skills to the unemployed. Companies who participate in the program can receive financial compensation from the government, in exchange for its employees who choose to become volunteer mentors. Treat Training as an Investment Investing in people is always a good thing. Both Singapore and India have put tremendous emphasis on employee training and development. Infosys, for example, has developed a campus-connect program designed to increase the employability of university students, by aligning their engineering and technical coursework with industry standards. Infosys has also implemented a faculty development program with over 5,000 educators and more than 400 colleges. As a result, over 100,000 students have been prepared, to meet the industry demands. GCC businesses can adopt similar programs and therefore take a more active role in developing the region s human capital. By investing in training and partnering with educational institutions, the business community can help reduce the skills gap and increase young people s participation in the labor market. In order to address the unemployment tsunami, the public and private sectors must act. And act with a sense of urgency. There is little time to waste. Summary The Gulf Cooperation Council region is confronting an unemployment tsunami. If this wave is not turned back, it can overwhelm the GCC economies. This paper has urged upon policymakers five bold steps to reduce the critical issue of youth unemployment. They include: (1) developing school-to-work programs, (2) adopting a workforce strategy, (3) establishing educational partnerships, (4)strengthening community-based organizations, and (5) investing in human capital development. REFERENCES 69

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