There is a need for more policies to foster the movement from the labour intensive to the capital intensive, thus increasing productivity and the reliance on unskilled labour, according to the recommendations of a latest study by the Dubai Economic Council, or DEC.

The Economic Policy and Research Centre, or EPRC, the operational arm of the DEC, conducted a study entitled “The Future of Talent in Dubai” that aims to provide policy recommendations.

It highlights the international mobility of foreign human capital in Dubai as most of the emirate’s labour force comes from abroad, and also demonstrates the best practices worldwide in labour migration strategy.

Gulf countries, exclusive of Saudi Arabia, are minorities in their own land, because a large portion the labour force are from foreign countries. The recruitment and retention of human talent is of the foremost importance to the development and growth of an economy. Technological innovation and the rapid growth of the emerging market have led to a surge in the demand of highly skilled workers thus intensifying the global competition for talent.

Moreover, that demand was coupled with weak domestic supply responses in the advanced countries due to demographic changes and the ageing of the population.

The GCC region, as exemplified by Dubai, has also been drawn into in this potential war for talent. Talent is increasingly harder to retain and attract in this region especially with the development of countries like

Human talent

Traditionally, the world was focused on the trade of goods and capital; however, since the 1960s, this focus have shifted towards the intangible factors such as creativity, ideas and innovation. Countries have evolved into knowledge-based economies and societies, and therefore, international mobility of skilled human capital has become essential to the economic development of a country.

The diverse set of skilled labour allows for the transfer of knowledge and technology thus increasing productivity and the international competitiveness of a country. It also encourages entrepreneurship and allows the nation to tap in to the international network more easily and develop business relationships with foreign organisations.

Selection effectiveness

Setting efficient selection criteria and being able to attract the right people who can contribute to the economic development of the country is extremely important. The selection criteria could be either government-driven such as the points system or employer-driven. In the points system, the government rates the individual according to specific and homogeneous criteria.

The employer-driven system allows the organisation to select the person by authorising it to sponsor its employees. Each system has its flaws and benefits. On one hand, the points system could distort people’s qualifications and make them look good on paper when in reality they are performing poorly in the labour market, while on the other hand, the employer system relies on the effectiveness of matching the employee with the employer.

Different countries adopt different criteria depending on their long term goals and their perception of the most efficient strategy in achieving those goals.

Policy recommendations

The study recommends short-, medium- and long-term solutions for recruitment and retention of skilled workers and important of training to make them more productive.

Short-, medium-term solutions

The government should encourage the influx of the skilled workforce by issuing different types of visas depending on the skill levels as measured by education and experience in a certain field.

Managers in Dubai and the UAE need to train employees within their organisations and increase their skill level and develop policies to retain them. Government employees should be provided with more incentives to acquire skills by increasing the skill premium in salaries.

Training should start at early ages. There should be training schemes for students enrolled in schools so that they have a better idea about the labour market before entering university.

There should be a public labour market information system which links the various sectors requirements to the educational system. There should be a cost-benefit analysis of all the admission regulations in order to relax those that are too costly and not adding any worth.

Long-term solutions

There should be more allocation of the private and public investment towards increasing the quality of higher education.

Policies should be adopted to foster the movement from the labour intensive to the capital intensive, thus increasing productivity and the reliance on unskilled labour. There is a large untapped pool of educated women in Dubai which should be encouraged to participate in the labour market.