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60% workers in Kuwait labor market ‘lack competencies’

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Difference cited of 31.3% between wages, benefits

KUWAIT CITY, Jan 18: A recent economic report issued by Procapita Management Consulting shows the employment market in Kuwait in 2021 faced great challenges during the past two years, the most prominent of which was the lack of the required competencies in the Kuwaiti market which was 59.7% largely due to a big gap in supply and demand in addition to the instability of the market and the local economy which shrank to 38.8 percent because of the effect of the coronavirus pandemic. The report pointed out that there is a difference of 31.3% between wages and benefits offered due to the structural imbalance in the labor market. The CEO of Procapita Management Consulting and founder of ZENITHR for smart solutions for human resources, Muhammad Abu Al-Rub, confirmed that the participation rate was very high, as more than 220 companies from 12 economic sectors in Kuwait and Saudi Arabia participated in the report, and the report included talent management practices because of it is extremely important to business leaders.

He added that the report provides a broad view of the trends of the local market and the business sector, and shows a reflection of the structural imbalance in the labor market on the wages offered to talents and rare specializations, and the extent to which businesses are affected by it and its repercussions. He explained that the results of the questionnaire were collected, analyzed and compared with the results of 2020 and the results of the semi-annual report for 2021 on scientific and accurate grounds, in addition to comparing them with global practices.

According to the analysis of Procapita’s Employment Management database, showed only 146 applicants were averaged for each vacancy (ranging from 285 for fresh graduate jobs, to high-supply jobs that are highly available in the labor market, and up to only 7 applicants for leadership and executive positions and specialized skills that suffers from a significant shortage and scarcity in the labor market). Despite the increase in job applications, the extent of compatibility between job applicants and the requirements of vacant jobs (matching score) is still low, recording only 15%, and this is explained by the lack of qualifications and experience required in the labor market in the various disciplines required by employers and the high percentage of researchers out of business, which reinforces the structural imbalance in the market.

The results of the survey showed that the job turnover rate for the participating companies in 2021 is 12.3%, which represents a relative decrease compared to the job turnover rate recorded in December 2020 by 15.1%, and a significant decrease from the peak turnover rate recorded in the first half of 2021 by 18.2%, which is considered top lately. There was a remarkable improvement in the second half of 2021 which led to a decrease in the rate of job turnover, especially the rate of involuntary job turnover (termination of services), which recorded 3.6%.

On the other hand, the rate of voluntary job turnover (resignations) witnessed a remarkable increase in the second half by 8.7%, which indicates the improvement of the business environment and the return of many companies to hiring and attracting employees again. The results of the questionnaire showed that the average years of employee service in the Kuwaiti labor market ranged between 5 and 10 years for 36.7% of the participating companies, and this indicates a high level of satisfaction, job stability and employee compatibility with the work culture, while the average employee service for only 2% of the participating companies Participating companies are less than one year old. Abu Al-Rub explained it is necessary to implement effective strategies to retain highly qualified employees because of their significant role in accomplishing business and achieving business goals. Please note that replacing these competencies may not be as easy as expected and costly at the same time.

Training programs, he said, are considered one of the most important pillars that contribute to the development and maintenance of employees and thus raising their productivity, with the importance of training plans and reducing budgets related to training in many companies. The results of the survey showed that 31.2% of the participating companies provided training programs for employees in 2021. As for identifying training needs, 69.2% of companies rely mainly on the direct manager’s recommendation, followed by individual development plans/performance evaluation results at 50%.

According to the results of the survey, 17.8% of the participating companies provide their employees with transportation allowance, while 55.3% of them provide transportation allowance annually as a fixed and specified amount according to job grades, while the survey indicated that 31.9% of the participating companies give their employees long-term incentives to maintain talent and leaders. The survey revealed that 61.4% of the participating companies provide their employees with cash compensation (bonuses and annual salary increases) as part of employee motivation and talent retention plans, while 42% of them offer non-cash compensation (such as flexible working hours, medical insurance, etc.), while it was Rewarding talents and leaders is a percentage of profits as the least strategy used to preserve talent, as it represented only 7.7%.

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