Every year, the Emiratisation quota imposed on banks increases, meaning they have to step up their efforts to encourage more locals into the sector. Yet, with such a limited talent pool available, is the government asking too much?

In the public sector, where the hours are short and the work arguably less taxing, Emiratisation has been incredibly successful. Both the Dubai Municipality and the Municipality of Abu Dhabi are approaching 70% nationals in the workforce.

In the banking sector, the Emiratisation target set by the Central Bank is 40%, but most firms are struggling to meet this.

One head of HR at a large bank in Abu Dhabi says that banking is a “third choice” career for Emiratis behind the public sector and oil and gas and that the quotas are overly ambitious when nationals make up around 20% of the UAE population.

“We increased Emiratisation to 39% by end of 2010 compared to 36% and 30% by end of 2009 and 2008 respectively. We aim to increase it to 40% by end of 2011,” adds Tim Knight, head of compensation & benefits at National Bank of Abu Dhabi.

In the past, international banks with large Middle Eastern operations have taken drastic measures to increase quotas. HSBC, for instance, laid off expat workers in order to create more jobs for nationals in 2006. Most firms, though, hiked up salaries for locals to compete with the lucrative packages on offer in the public sector.

These days, most financial services companies aim to recruit Emiratis early. A number of firms, including the Abu Dhabi Investment Authority, target high school students offering internships, sponsorship through university and eventually a job offer.

International banks, such as Standard Chartered, have stepped up their Emirati development programmes and aim to equip nationals with skills to work in areas like wholesale banking, where they’ve traditionally struggled to recruit.

The sad fact remains, though, that the majority of Emiratis entering the sector end up in a retail banking role.

“The traditional, easier elements of banking – retail and commercial – are where we recruit most Emiratis,” says one HR manager at a large regional bank who declined to be named. “Investment banking, fund management, private equity – all these areas are too intellectually challenging. This sounds derogatory, but the training and education still isn’t there.”

Side-stepping quotas

If a bank doesn’t hit its quotas, it risks the government increasing the cost of a working visa for expat employees or the number of visas issued becoming more restricted, according to Emiratisation experts.

Hiring an Emirati into the banking sector can be expensive, with some Emiratis able to command 30% more than their expat counterparts for the same role. As a result, some banks are simply willing to accept the hit on a visa for a more skilled expat, suggest recruitment sources.

Smaller firms – those with 20 or so employees – also tend to fall under the radar of Emiratisation targets.

Generally, though, Middle East localisation experts are reaching the conclusion that quota systems are flawed.

“More needs to be done to link business with academia and enthuse Emiratis about working in the private sector early on,” says Charles Wilson, a nationalisation expert and senior HR advisor to the Chartered Institute of Personnel and Development. “People don’t want to be told where they should work, it’s up to companies, universities and the government to unlock their ambition and alert them to exciting opportunities in the private sector.”