Labour Fund – Strategic Plan

Kingdom of Bahrain

2007

1. Situation & Aspiration

2. Labour Market Behaviour

3. Strategic Intent4. Proposed Initiatives

- Quality of Life Index

- Measuring our success

1. Situation & Aspiration

2. Labour Market Behaviour

3. Strategic Intent4. Proposed Initiatives

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The quality of life (the living standards) in Bahrain has scored moderate in comparison to similar economies. Accordingly, the Labour Fund’s key aspiration is to elevate Bahrainis standards of living.

Currently, Bahrain’s Quality of Life Index falls within the lowest quartile when compared to similar economies.

Therefore, the target is to enhance living standards beyond its current standing and to be among the best in the world.

Low

Low

High

Hig

h

Qua

lity

of L

ife In

dex

GDP US$ (PPP)

USA

Qatar

UAE

Bahrain

Targeted Position

Ireland

Cyprus

Kuwait

4Source: Economic Intelligence Unit – Quality of Life Index 2005

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Average Wages (BD per Month)

Job

Opp

ortu

nitie

s

To raise Bahrainis standard of living, it is important that value added jobs are being occupied by Bahraini Human Capital.

Raising Bahrainis standard of living would require:

Improving the skills set of Bahraini human capitalPosition Bahrainis in higher level jobs.

Executive Management

Middle Management

Supervisory Level

Subordinate Level

0 200 500 800 1100 1400 4000 5000

2007

2007

2007

2007

2010

2010

2010

2010

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- Labour Market Driving Forces-Labour Market Policies

-Talent Pool-Market/Business Performance

1. Situation & Aspiration

2. Labour Market Behaviour

3. Strategic Intent4. Proposed Initiatives

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ValueAdded Jobs

Talent

PoolMarket

Performance

Labour MarketPolicies

In order to comprehend the labour market dynamics and challenges, a thorough assessment and analysis must be considered in:

1- Labour Market Policies2- Talent Pool3- Market conditions & performance

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Understanding the challenge of the labour market driving forces is the key to derive the Labour Fund’s strategic plan.

Labour Market Driving Forces

1 – Labour Market Policies

2 – Talent Pool

3 – Market/Business Performance

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Improving the labour market policies would require setting skill standards and enforcement mechanisms.

Current market behaviour indicates lack of:

Defined skill standardsDeficiencies in labour law implementation and enforcement

- Recruitment process not linked to competencies

- Absence of formalised skill standards

- Absence of enforcement

- Improper implementation of Labour Law

Insufficient enforcement

and standardisation

within the labour system

Symptoms Conditions Strategic Thrust

Improve Labour Market

Policies

9Source: 1st Consultative Labour Fund Strategy Forum (December 2006); Labour Market Survey LF (2006)

1 – Labour Market Policies

2 – Talent Pool

3 – Market/Business Performance

Labour Market Driving Forces

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Enhancing current low Bahraini penetration in vital sectors through upscaling talent, defining standards, and would result in positioning Bahrainis in value-added jobs.

- Limited career progression

- Low wages / benefits

- Low work ethics / discipline

- Absence of formalised skill standards

- Absence of career development / planning culture

- Training infrastructure deficiencies

- Talent pool low skills

Skill Gap Deficiencies

Symptoms Conditions Strategic Thrust Talent pool assessment indicates Bahrainis are performing low due to low skills and low work ethics and a lack of other factors such as:

Growth planningQualityDefined skill standards

have a negative impact as well.

Optimise Talent Pool

11Source: 1st Consultative Labour Fund Strategy Forum (December 2006); Labour Market Survey LF (2006)

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) Bahrain faces structural labour market issues due to lack of:

Job channellingCareer counselling

Resulting in ambiguities in employment opportunities for Bahrainis in higher level value-added jobs.

- Ineffective employment channelling

- Long periods of job search

- Absence of career guidance

Limited Career

Awareness

Symptoms Conditions Strategic Thrust

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Optimise Talent Pool

Providing career counselling, awareness, and channelling are of significance in order to resolve career path and placement challenges.

Source: 1st Consultative Labour Fund Strategy Forum (December 2006); Labour Market Survey LF (2006)

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) Low job penetration is due to:

Cultural resistanceGender disparity

Is resulting in missing opportunities to place Bahrainis in value-added jobs.

- Gender Disparity

- Cultural resistance

Low Bahraini Penetration

Symptoms Conditions Strategic Thrust

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Optimise Talent Pool

An intensive awareness campaign to correct cultural issues is of essence in order to increase penetration in low attractive jobs.

Source: 1st Consultative Labour Fund Strategy Forum (December 2006); Labour Market Survey LF (2006)

1 – Labour Market Policies

2 – Talent Pool

3 – Market/Business Performance

Labour Market Driving Forces

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Supporting the private sector to overcome growth challenges will help in fuelling business and employment opportunities.

Enterprise growth is hindered by challenges related to:

Limited business growth and opportunitiesGovernment promotional and investment strategiesLimited market access

- Slow privatisation / under- utilisation of infrastructure

- Slow development of sectors

- Under-utilisation of foreign trade agreements

- Limited promotion of sectors

-Undefined direction for sector development

- Unclear investment guidance

- Limited marketing efforts

- Limited access to financing

- Limited market access

- Minimal cross-sector linkages

Stagnating Business /

Employment Opportunities

External Issues

Symptoms Conditions Strategic Thrust

Enable Enterprise

Growth

15Source: 1st Consultative Labour Fund Strategy Forum (December 2006); Labour Market Survey LF (2006)

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- Low technology infusion

- Absence of R&D

- Limited e-commerce

- Deficiency in service quality

- Low competitiveness

- Low corporate leadership

- Few large players

- Absence of market leader

Low Business

Performance

Internal Issues

Symptoms Conditions Strategic Thrust

Enable Enterprise

Growth

Corporations in Bahrain are faced by structural challenges related to performance excellences key issues include;

LeadershipStrategic directioncustomer focusTechnology infusion

Which are resulting in low competitiveness.

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Resolving corporate structural bottlenecks would ensure sustainable and robust business environment which would result in supplying solid value added job opportunities.

Source: 1st Consultative Labour Fund Strategy Forum (December 2006); Labour Market Survey LF (2006)

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GDP

Labour

Wage

Acceptance

Sustainabilit

y

GDP

Labour

Wage

Acceptance

Sustainabilit

y

GDP

Labour

Wage

Acceptance

Sustainabilit

y

GDP

Labour

Wage

Acceptance

Sustainabilit

y

Finance Transport & Communication

Manufacturing Trade

- 0 + - 0 +

- 0 + - 0 +

Selected sectors have shown:High GDP contributionLabour intensityAverage wagesAcceptance; andSustainability

However, the finance sector has not been considered due to its maturity and continued sustainable growth.

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An assessment of sectors based on GDP contribution, labour intensity, wages, acceptance, and sustainability has revealed that transport & communication, manufacturing, trade…

Source: Labour Fund Analysis - 2006

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GDP

Labour

Wage

Acceptance

Sustainabilit

y

GDP

Labour

Wage

Acceptance

Sustainabilit

y

GDP

Labour

Wage

Acceptance

Sustainabilit

y

GDP

Labour

Wage

Acceptance

Sustainabilit

y

Social & Personal Services Real Estate & Business

Electricity & Water Construction

- 0 + - 0 +

- 0 + - 0 +

Only health care of the social and personal services has been selected for its potential to growth due to government intentions to privatize the sector.

Real estate, electricity & water, and construction have not been selected due to their low performance.

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… social & personal services …

Source: Labour Fund Analysis - 2006

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GDP

Labour

Wage

Acceptance

Sustainabilit

y

GDP

Labour

Wage

Acceptance

Sustainabilit

y

Tourism Agriculture & Fishing- 0 + - 0 +

Tourism has been selected due to its high potential for growth regardless of its low GDP contribution.

While on the other hand, the agriculture and fishing sector has been eliminated to its insignificant GDP contribution and limited potential for growth.

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…as well as tourism have the greatest potential for growth.

Source: Labour Fund Analysis - 2006

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Planned Projects up to the year 2011

Bahrain has been experiencing an economic boost mainly fuelled by major projects in key economic sectors. As a result, the Labour Fund should focus on developing talent and establishing strategic links with the upcoming projects.

By 2011, a total of 108 projects , with an estimated value of BD 9.2 billion* (US$ 24.4 billion) are expected to be launched in Bahrain.

These projects are expected to create approximately 44,000 new jobs over the next 5 years.

* MEED estimates total investment size at BD 10.7 billion (US$ 28.5 billion)

Num

ber

of

plan

ned

proj

ects

45

40

35

30

25

20

15

10

5

0

0 500 1000 1500 2000 2500 3000 3500 4000 4500

Investment ($ Million)

Transport &

Communication

Trade

Social & Personal

Services

Tourism

Manufacturing

20Source: Labour Fund Analysis, Zawya and MEED (2006)

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0 - 500

501 - 1000

1001 - 1500

1501 - 2000

2001 - 2500

2501 - 3000

Size of Company

(Number of Employees)

Average Wages (BD per month )

250

350

410

470

550

21

The wage analysis indicated that Bahrainis tend to earn higher wages as the size of the firm increases.

290

Large-scaled firms are potential employment channels for value-added jobs, hence, enlarging smaller firms is a key strategic direction for the Labour Fund

Source: Labour Fund Analysis, General Organisation for Social Insurance (2005)

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Maintenance

High Wage Occupation Categories (Targeted High-end Wages in BD)

Plant Operations

Inventory ControlEngineers

Production

Procurement

Technician

ManufacturingTransport

Health

Telecoms

Tourism & LifestyleTrade

Surgeons

GPs

Nutritionists

Physical Therapists

Nursing

Pharmacists

Recreation

Facilities Management

PilotsAviation Engineers

Air Hosts

Telecom Engineers

Systems Administrator

Software & Network Engineers

Data Managers

Operators

Retail Operations

Logistics Management

The Labour Fund should ensure that employment pushes are being driven towards value added and financially rewarding jobs.

Value-added jobs have been selected on the basis of the highest financially rewarding job categories in the selected sectors.

22Source: Labour Fund Analysis, General Organisation for Social Insurance (2005)

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The Labour Fund would also focus on developing the most rewarding and demanded occupations across sectors

In addition to sector specific occupations, the Labour Fund would also focus on cross-sectoral occupations due to:

High demand Rewarding careers

23Source: Labour Fund Analysis, General Organisation for Social Insurance (2005)

Types of Occupations

• Project Supervisory• Program Manager• Administration

• Recruitment• Performance Management• Training• Staff Development

• Electric & Electronic Engineering• Maintenance Engineering• Mechanical Engineering• Civil Engineering• Network & Software Engineering• Process Engineering

• Financial Controlling• Accountancy• Internal Auditing

• CRM• Communications• Sales• Product Marketing• Branding

Occupation Clusters

Distribution &

Customer Support

Executive

Management

Human Resource

ManagementEngineering Finance

- Problem Definition & Ethos

- Guiding Principals

1. Situation & Aspiration

2. Labour Market Behaviour

3. Strategic Intent4. Proposed Initiatives

PROBLEM DEFINITION & ETHOS

The Labour Fund aspires to improve living standards for

Bahrainis

through three key pillars: optimising talent, enabling

enterprise growth, and improving labour market policies

LABOUR

FUND

ETHOS

Stagnating wages are fuelling the expansion of the

lower class and diminishing standards of living due

to low skill development, low business

performance, and poor policy enforcement and

standardisation

PROBLEM

DEFINITION

STATEMENT

GUIDING PRINCIPALS

To be an enabler and driver in offering rewarding employment opportunities to attain prosperous living for Bahrainis

We will work towards developing talented Bahraini competencies, enabling enterprise growth, and improving policies and standards

This will be achieved through investing in human capital, supporting growth and development of business activities, and collaborating with key policy and decision makers

A Distinguished Career for Prosperous Living

VISION

MISSION

OBJECTIVES & STRATEGIES

Capitalise & develop value-added Bahraini talent & skills in rewarding careers

Support, develop & attract new industries

Enhance & leverage existing industries

STRATEGIES

OBJECTIVES

Optimising talent

Enabling enterprise growth

Improving labour market policies

- Initiatives

1. Situation & Aspiration

2. Labour Market Behaviour

3. Strategic Intent4. Proposed Initiatives

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Improving, standardising and enforcing labour market policies would assist in resolving the existing challenges

Two initiatives were developed to assist in improving labour market policies:

•National skills standardisation program; and •Employment standards index

InitiativesObjectivesStrategic Thrust

National Skills Standardization

Program

Employment Standards

Index

Improve Labour Market

Policies

- Systems Standardization

- Policy Enforcement and Utilization

- Information Preparedness

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In order to resolve the challenges, the talent pool can be optimised by tackling skill gaps, career awareness and low Bahraini penetration

In order to meet the objectives required to improve & develop the talent pool, the Labour Fund has identified a number of initiatives that need to be successfully completed:

- International Apprenticeship Program

-Talent Management Training

- Specialised Training for Skill Gaps

- Work Ethics Training & Awareness

-Training for Career Progression

- Career Market Acceptance & Awareness Campaign

Talent Pool

Talent Pool Optimization

Skill StandardsEnforcement

- Human Capital Program Development

- Talent Resource Utilization

- Knowledge Enforcement

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• International apprenticeship program

• Work ethics training & awareness

• Talent management training

• Specialised training for skill gaps

• Training for career progression

• Career market acceptance & awareness campaign

InitiativesObjectivesStrategic Thrust

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In order to resolve the challenges, enterprise growth can be nurtured by tackling the lack of business and employment opportunities

The following initiatives have been identified to over come the issue of stagnating business and employment opportunities:

•Diversifying Businesses operating in Bahrain•Attracting Investment in various sectors •Developing local talent•Improving services provided to businesses operating in Bahrain•Setting up a venture capital fund to promote start up businesses or assist existing businesses to expand and mature

- Diversifying Businesses

- B2B e-Marketplace

-Venture Capital Investment

- Attracting Investment & Sourcing Talent

Enterprise External Issues

Market/ResourceOptimization

Venture Proliferation

Sector Profiling

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InitiativesObjectivesStrategic Thrust

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) The following initiatives have been identified to over come internal issues facing enterprises:

•Improve business competitiveness

•Improve the performance of companies and generate extra revenue that can be used for training of employees

•Allow companies to develop and mature

- Corporate Performance Excellence (QualityCorp)

- Enterprise Growth Management Program

Enterprise Internal Issues

EnterpriseManagement

EnterpriseCompetitiveness

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In order to resolve the challenges, enterprise growth can be nurtured by tackling the lack of business and employment opportunities

InitiativesObjectivesStrategic Thrust