While access to credit is becoming easier for some parts of the world, HR professionals and business leaders have for a while expressed concern that it is becoming increasingly hard to locate job applicants who have the educational qualifications, skills, and experience to perform certain roles. As a quality, skilled and diverse workforce is an important factor in determining the success of a business, these challenges can influence the growth and competitiveness of a business both today and in the future.

For many businesses, one of the key drivers of an integrated HR strategy is the requirement for talent mobility within the company. This is particularly vital for companies wishing to expand abroad, who must source the correct talent to run and open their new premises.

For HR teams, deciding on the most effective recruitment strategy for international expansion can be difficult. The average expat costs a company three times what they would in the same position back home, largely due to relocation benefits, transportation, and training costs. This is a weighty investment considering that a large proportion of expats return home early or join a competitor one year after repatriation.

The other option is to employ local staff, a strategy often overlooked out of fear that local talent pools lack the required skills. The irony is though those well-trained local professionals can provide a huge amount to a company in terms of cultural knowledge, language skills, and economic stability. As natives to the area, they have strong community ties, enabling them to navigate potential problems with greater ease. They also come at a fraction of the cost of expats.

Local staff also statistically have a higher retention rate, particularly in developing regions. This is because businesses are engaging a workforce that has had limited opportunities in life and is grateful to those who have invested in them. These employees, therefore, tend to stay with a company for a large part of their career, saving companies thousands of pounds per employee in recruitment costs.

By investing in education and employee training, businesses are creating a younger pool of ‘wider talent’ to reduce reliance on the existing trained resource. This strategy is notably beneficial in developing regions such as the Middle East and North Africa (MENA), which concentrates more than half of the world’s unemployed youth and ‘working poor’. A large number of these youth have a tertiary education but require training on 21st-century skills, especially the digital skills, required for infrastructure and economic development. By harnessing and upskilling this population, companies can widen their talent pool and aid the economic development of these regions.

Morocco is a key example. The entry of renewable, aeronautics or automotive corporates such as Renault pushed economic growth to 3.1% in 2018, making it the sixth-largest African economy. In partnership with specialist organizations and the Moroccan government, these businesses are employing local staff and developing local training programs to upskill workers. These efforts have had the additional benefit of enhancing brand recognition and gaining positive media traction. In addition, 66 percent of consumers are also willing to pay more for products from socially responsible companies, so training local staff can form part of a company’s CSR initiatives and aid company profits.

Overall, many businesses that are expanding abroad are in search of reduced production costs and higher profits.  However, until companies increase domestic hiring levels, they will continue to rely on the expensive and unsustainable method of expatriating staff. By adopting an inclusive and flexible corporate culture that supports the integration and development of nationals into the workforce, businesses can enhance profits, reputation and create a reliable workforce, whilst tackling skills shortages in areas such as MENA.

About the author: Salvatore Nigro, is the Global Vice President and CEO in Europe of Education For Employment (EFE), an international network dedicated to unlocking economic opportunities for MENA youth.

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