Labour Fund – Strategic Plan

1. 2007 Kingdom of Bahrain Labour Fund – Strategic Plan

2. 1. Situation & Aspiration 2. Labour Market Behaviour 3. Strategic Intent 4. Proposed Initiatives

3. 1. Situation & Aspiration 2. Labour Market Behaviour 3. Strategic Intent 4. Proposed Initiatives - Quality of Life Index - Measuring our success

4. Quality of life index 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. Ireland High Targeted Position USA Cyprus Kuwait Quality of Life Index Bahrain Qatar UAE Low Low High GDP US$ (PPP) Source: Economic Intelligence Unit – Quality of Life Index 2005

5. Measuring our success 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 capital • Position Bahrainis in higher level jobs. 2010 Executive Management 2007 2010 Middle Management 2007 Job Opportunities 2010 Supervisory Level 2007 2010 2007 Subordinate Level 0 200 500 800 1100 1400 4000 5000 Average Wages (BD per Month)

6. 1. Situation & Aspiration 2. Labour Market Behaviour 3. Strategic Intent 4. Proposed Initiatives - Labour Market Driving Forces • Labour Market Policies • Talent Pool • Market/Business Performance

7. Labour Market Driving forces Understanding the challenge of the labour market driving forces is the key to derive the Labour Fund’s strategic plan. In order to comprehend the labour market dynamics and challenges, a thorough assessment and analysis must be considered in: 1- Labour Market Policies 2- Talent Pool 3- Market conditions & performance Value Added Jobs Talent Pool Market Performance Labour Market Policies

8. Labour Market Driving Forces 1 – Labour Market Policies 2 – Talent Pool 3 – Market/Business Performance

9. Labour Market Policies Improving the labour market policies would require setting skill standards and enforcement mechanisms. Symptoms Conditions Strategic Thrust • Current market behaviour indicates lack of: • Defined skill standards • Deficiencies in labour law implementation and enforcement • Absence of formalised skill • standards Improve Labour Market Policies Insufficient enforcement and standardisation within the labour system • Recruitment process not • linked to competencies • Improper implementation of • Labour Law - Absence of enforcement Source: 1st Consultative Labour Fund Strategy Forum (December 2006); Labour Market Survey LF (2006)

10. Labour Market Driving Forces 1 – Labour Market Policies 2 – Talent Pool 3 – Market/Business Performance

11. talent pool Enhancing current low Bahraini penetration in vital sectors through upscaling talent, defining standards, and would result in positioning Bahrainis in value-added jobs. 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 planning • Quality • Defined skill standards • have a negative impact as well. - Limited career progression - Low wages / benefits - Low work ethics / discipline Optimise Talent Pool Skill Gap Deficiencies • Absence of formalised skill • standards • Absence of career development / • planning culture - Talent pool low skills • Training infrastructure • deficiencies Source: 1st Consultative Labour Fund Strategy Forum (December 2006); Labour Market Survey LF (2006)

12. talent pool Providing career counselling, awareness, and channelling are of significance in order to resolve career path and placement challenges. Symptoms Conditions Strategic Thrust • Bahrain faces structural labour market issues due to lack of: • Job channelling • Career counselling • Resulting in ambiguities in employment opportunities for Bahrainis in higher level value-added jobs. Optimise Talent Pool Limited Career Awareness • Ineffective employment • channelling - Long periods of job search - Absence of career guidance Source: 1st Consultative Labour Fund Strategy Forum (December 2006); Labour Market Survey LF (2006)

13. talent pool An intensive awareness campaign to correct cultural issues is of essence in order to increase penetration in low attractive jobs. Symptoms Conditions Strategic Thrust • Low job penetration is due to: • Cultural resistance • Gender disparity • Is resulting in missing opportunities to place Bahrainis in value-added jobs. Low Bahraini Penetration - Gender Disparity Optimise Talent Pool - Cultural resistance Source: 1st Consultative Labour Fund Strategy Forum (December 2006); Labour Market Survey LF (2006)

14. Labour Market Driving Forces 1 – Labour Market Policies 2 – Talent Pool 3 – Market/Business Performance

15. Market performance Supporting the private sector to overcome growth challenges will help in fuelling business and employment opportunities. Symptoms Conditions Strategic Thrust • Enterprise growth is hindered by challenges related to: • Limited business growth and opportunities • Government promotional and investment strategies • Limited market access • Slow privatisation / under- • utilisation of infrastructure Stagnating Business / Employment Opportunities - Slow development of sectors • Under-utilisation of foreign • trade agreements Enable Enterprise Growth - Limited promotion of sectors - Limited marketing efforts - Unclear investment guidance • Undefined direction for sector • development External Issues - Limited market access - Minimal cross-sector linkages - Limited access to financing Source: 1st Consultative Labour Fund Strategy Forum (December 2006); Labour Market Survey LF (2006)

16. Market performance Resolving corporate structural bottlenecks would ensure sustainable and robust business environment which would result in supplying solid value added job opportunities. Symptoms Conditions Strategic Thrust • Corporations in Bahrain are faced by structural challenges related to performance excellences key issues include; • Leadership • Strategic direction • customer focus • Technology infusion • Which are resulting in low competitiveness. - Low technology infusion - Low competitiveness Low Business Performance - Absence of R&D Enable Enterprise Growth - Limited e-commerce - Deficiency in service quality Internal Issues - Low corporate leadership - Absence of market leader - Few large players Source: 1st Consultative Labour Fund Strategy Forum (December 2006); Labour Market Survey LF (2006)

17. Growth Sectors An assessment of sectors based on GDP contribution, labour intensity, wages, acceptance, and sustainability has revealed that transport & communication, manufacturing, trade… • Selected sectors have shown: • High GDP contribution • Labour intensity • Average wages • Acceptance; and • Sustainability • However, the finance sector has not been considered due to its maturity and continued sustainable growth.  Finance Transport & Communication - 0 + - 0 + GDP Labour Wage Acceptance Sustainability GDP Labour Wage Acceptance Sustainability   Manufacturing Trade - 0 + - 0 + GDP Labour Wage Acceptance Sustainability GDP Labour Wage Acceptance Sustainability Source: Labour Fund Analysis - 2006

18. Growth Sectors … social & personal services … 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.  Social & Personal Services Real Estate & Business - 0 + - 0 + GDP Labour Wage Acceptance Sustainability GDP Labour Wage Acceptance Sustainability Electricity & Water Construction - 0 + - 0 + GDP Labour Wage Acceptance Sustainability GDP Labour Wage Acceptance Sustainability Source: Labour Fund Analysis - 2006

19. Growth Sectors …as well as tourism have the greatest potential for growth. 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.  Tourism Agriculture & Fishing - 0 + - 0 + GDP Labour Wage Acceptance Sustainability GDP Labour Wage Acceptance Sustainability Source: Labour Fund Analysis - 2006

20. Major Projects 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) Planned Projects up to the year 2011 45 40 35 30 25 20 15 10 5 0 Transport & Communication Trade Social & Personal Services Tourism Manufacturing Number of planned projects 0 500 1000 1500 2000 2500 3000 3500 4000 4500 Investment ($ Million) Source: Labour Fund Analysis, Zawya and MEED (2006)

21. Wage analysis Large-scaled firms are potential employment channels for value-added jobs, hence, enlarging smaller firms is a key strategic direction for the Labour Fund The wage analysis indicated that Bahrainis tend to earn higher wages as the size of the firm increases. 2501 - 3000 550 470 2001 - 2500 1501 - 2000 410 Size of Company (Number of Employees) 1001 - 1500 350 290 501 - 1000 0 - 500 250 Average Wages (BD per month ) Source: Labour Fund Analysis, General Organisation for Social Insurance (2005)

22. High wage occupation categories 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. High Wage Occupation Categories (Targeted High-end Wages in BD) Manufacturing Maintenance Transport Plant Operations Pilots Aviation Engineers Inventory Control Engineers Air Hosts Production Procurement Technician Telecoms Telecom Engineers Health Systems Administrator Surgeons Software & Network Engineers GPs Data Managers Nutritionists Operators Physical Therapists Nursing Pharmacists Trade Retail Operations Tourism & Lifestyle Recreation Logistics Management Facilities Management Source: Labour Fund Analysis, General Organisation for Social Insurance (2005)

23. CROSS – SECTOR OCCUPATIONS 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 Occupation Clusters Executive Management Human Resource Management Distribution & Customer Support Engineering Finance 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 Source: Labour Fund Analysis, General Organisation for Social Insurance (2005)

24. 1. Situation & Aspiration 2. Labour Market Behaviour 3. Strategic Intent 4. Proposed Initiatives - Problem Definition & Ethos - Guiding Principals

25. PROBLEM DEFINITION & 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 LABOUR FUND 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

26. GUIDING PRINCIPALS VISION A Distinguished Career for Prosperous Living To be anenabler 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 MISSION

27. OBJECTIVES & STRATEGIES • Optimising talent • Enabling enterprise growth • Improving labour market policies OBJECTIVES • Capitalise & develop value-added Bahraini talent & skills in rewarding careers • Support, develop & attract new industries • Enhance & leverage existing industries STRATEGIES

28. 1. Situation & Aspiration 2. Labour Market Behaviour 3. Strategic Intent 4. Proposed Initiatives - Initiatives

29. INITIATIVES Improving, standardising and enforcing labour market policies would assist in resolving the existing challenges Strategic Thrust Objectives Initiatives • Two initiatives were developed to assist in improving labour market policies: • National skills standardisation program; and • Employment standards index National Skills Standardization Program - Systems Standardization Improve Labour Market Policies - Policy Enforcement and Utilization Employment Standards Index - Information Preparedness

30. INITIATIVES In order to resolve the challenges, the talent pool can be optimised by tackling skill gaps, career awareness and low Bahraini penetration Strategic Thrust Objectives Initiatives 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 Pool Optimization • Work Ethics Training & • Awareness • Talent Management • Training Skill Standards Enforcement • International apprenticeship program • Work ethics training & awareness • Talent management training • Specialised training for skill gaps • Training for career progression • Career market acceptance & awareness campaign Talent Pool • Specialised Training for • Skill Gaps - Human Capital Program Development • Training for Career • Progression - Talent Resource Utilization • Career Market • Acceptance & • Awareness Campaign - Knowledge Enforcement

31. INITIATIVES In order to resolve the challenges, enterprise growth can be nurtured by tackling the lack of business and employment opportunities Strategic Thrust Objectives Initiatives • 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 Market/Resource Optimization - Diversifying Businesses Enterprise External Issues • Attracting Investment • & Sourcing Talent Sector Profiling - B2B e-Marketplace Venture Proliferation • Venture Capital • Investment

32. INITIATIVES In order to resolve the challenges, enterprise growth can be nurtured by tackling the lack of business and employment opportunities Strategic Thrust Objectives Initiatives • 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 Competitiveness Enterprise Internal Issues • Enterprise Growth • Management Program Enterprise Management