Business leaders and HR professionals are raising increasing concerns on the difficulty of finding job applicants with the necessary experience, skills and educational qualifications to perform specific roles. Given that a diverse, quality and skilled workforce is significant for business success, these issues can directly influence the growth and competitiveness of present and future companies.
Talent mobility is a factor
For many organisations, one of the key drivers of a globally integrated HR strategies is talent mobility. This is increasingly vital for companies looking to expand abroad, who must source the right talent to open and run their new premises.
For HR teams, deciding on the best-suited recruitment strategy for international expansion can be a challenge. The average expat costs a company three times what they would in the same position back home, mostly due to relocation benefits, transportation and training costs. Choosing to employ an expat is, therefore, a significant investment, particularly considering that a large proportion of expats return early or leave for a competitor a year after repatriation.
Hiring local talent as a solution
A more practical option is to hire local talent who come at a fraction of the cost of expats. This is often overlooked out of fear that local professionals lack the required skills. Well-Trained local staff offer a massive amount to a company in terms of cultural knowledge, language skills, and economic stability. As natives to the region, their community ties are also well developed – enabling them to navigate possible problems with greater ease.
Local talent also has a statistically higher retention rate in developing regions. This is because HR teams are engaging a workforce with limited opportunities in life and are grateful to those who have economically invested in them. As such, these employees tend to stay loyal to a company for a large proportion of their career, saving businesses hundreds of thousands of pounds in recruitment costs.
Investing in training and education can pay
By investing in education and training, companies also create a younger pool of ‘wider talent’ to reduce pressure on existing trained resources. This focus on local talent is hugely beneficial for developing regions such as the Middle East and North Africa (MENA), where over half of the world’s unemployed youth and “working poor” are concentrated.
A large fraction of these individuals have completed tertiary education but lack training in 21st-century skills, particularly digital skills, needed for infrastructure and economic development. By tapping into and upskilling these populations, businesses can expand their talent pool and help with regional development.
Morocco is a prime example. As renewable energy, aeronautics and automotive companies like Renault settled in the country, economic growth grew to 3.1% in 2018, making it the sixth-largest African economy. In partnership with the Moroccan government and specialist organisations, these companies have been developing local training programmes and employing local staff to upskill workers.
These efforts have had the additional benefit of raising brand reputation and of gaining positive media traction. Sixty-six per cent of consumers are also willing to pay a higher price for products from socially responsible companies, meaning training local staff can aid sales and form part of a company’s CSR initiatives.
Final thoughts on building a local talent pipeline
Overall, many companies expanding abroad are actively looking for a way to maximise profits while keeping production costs down. However, until businesses increase domestic hiring levels, they will continue to rely on the unsustainable and expensive method of expatriating staff. By creating an inclusive, flexible corporate culture that encourages the development and integration of nationals into the workforce, companies may positively increase profits, reputation and make a reliable, stable workforce, while tackling skills shortages in developing regions like MENA.
By Salvatore Nigro, Global Vice President and CEO in Europe of Education for Employment (EFE), an international network dedicated to unlocking economic opportunities for MENA youth. EFE is leading network of non-profits that trains young people and links them to jobs across the Middle East and North Africa (MENA). EFE operates in nine countries across the region to boost youth employment.