INSIGHT: Middle East could face crisis in workforce

19 December 2006 17:17  [Source: ICIS news]

By Matt Kovac

 

DUBAI (ICIS news)--Manpower was top of the agenda at the weekend's inaugural Gulf Petrochemicals and Chemicals Association (GCPA), as speakers warned that engineering and general labour requirements in the region were not being met.

 

Meeting at the five-star Habtoor Resort hotel in Dubai, executives from the region and elsewhere concentrated discussions on what types of skilled and manual labour would be needed to replace the greying brigade in attendance.

 

Statistics from UK-based Jacobs Consultancy show that among the oil, gas, chemical, infrastructure and power projects going on in the region, as many as 100,000 engineering and construction personnel and 600,000 general labourers are the industry requirement as of today. But that requirement is not being met.

 

This is of crucial importance for regional companies, such as SABIC, who are intent on conquering not only their own markets but those overseas.

 

“The biggest challenge we face as an industry is manpower and other related HR issues. If you do not pay attention to manpower, this will push costs higher and contribute to project over-runs,” said Mohammed Al Mady, chief executive of SABIC.

  

Projects costs have accelerated by as much as 50% to 60%, partly because of the HR shortfall said Andrew Spiers, Senior Vice President of Chemicals at consultants Nexant. He warned some projects will be delayed until the economics look better.

 

It has not helped that salaries of senior project managers and chemical engineers have risen by 30% a year over the last three years and skilled worker salaries in the GCC have been rising by 8%, Dubai-based market intelligence outfit Contax Group said. Pay cheques have been pushed higher by poaching of much-needed executives because of the shrinking talent pool.

 

This is a sizeable challenge. To maintain growth in the industry, it is essential to have the right people in your company.

 

“We have to be more visionary. Otherwise we will loose our strengths such as natural feedstock advantages.That means building more meaningful ties between government, business, research institutes and universities," said Khaled Al Falih, Senior VP at Saudi Aramco.

 

However, success is not just about tapping into those traditional methods. It is crucial to bring retired executives back into the fold to mentor those less experienced employees - already a factor at some companies.

 

This would go some way to helping the region broaden its chemical base into downstream plastics processing and developing new technologies that have been so important to many European and US chemical companies’ business models.

 

The call to build an integrated chain from oil and gas through to converters has been most prevalent in Saudi Arabia. But the lack of skilled people needed in production, sales and marketing, and even logistics could very well dent those ambitions.

 

“That’s why we need to attract the best and brightest talent and convince them that we are an industry worthy of working in. We will not stay in business unless we meet this challenge," said Fran Keeth, retiring executive VP of chemicals at Shell.

 

 

By: Matt Kovac
+65 6780 4359

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