Career Exploration and Perceived Employability within an Emerging Economy Contextby Ingo Forstenlechner, Hassan Selim, Yehuda Baruch, Mohamed Madi

Human Resource Management

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CAREER EXPLORATION AND

PERCEIVED EMPLOYABILITY

WITHIN AN EMERGING

ECONOMY CONTEXT

I N G O F O R S T E N L E C H N E R , H A S S A N S E L I M , Y E H U D A

B A R U C H , A N D M O H A M E D M A D I

Following four decades of unprecedented economic, social, and cultural change, the United Arab Emirates (UAE) labor market is highly segmented:

The native population is almost exclusively employed in the government sector, while the private sector is effectively outsourced to foreigners. This has created an unsustainable situation with growing numbers of young citizens reaching working age and with a public sector that has reached the saturation point. Policymakers repeatedly try to legislate to encourage private-sector employers to hire citizens. These policies have had limited success. We explored the career attitudes of 2,267 United Arab Emirates citizens prior to their entry into the labor market. Using structural equation modeling, we found that the social contract and resulting expectations toward state employment have strong implications for willingness to work in the private sector. © 2014 Wiley Periodicals, Inc.

Keywords: Arab Gulf labor markets, career theory, social contract, employability, structural equation modeling

Correspondence to: Ingo Forstenlechner, Federal Demographic Council, P.O. Box 605, Abu Dhabi, United Arab

Emirates, E-mail: ingo@forstenlechner.org.

Human Resource Management, January–February 2014, Vol. 53, No. 1. Pp. 45–66 © 2014 Wiley Periodicals, Inc.

Published online in Wiley Online Library (wileyonlinelibrary.com).

DOI:10.1002/hrm.21553

Introduction

I n this article, we employ contemporary career concepts in the cultural context of the Arab Gulf to evaluate willingness and interest to include the private sector as a possible target when seeking employment. We do so within Fishbein and

Ajzen’s (1975) behavioral approach model, assuming that the general culture of contemporary Gulf society has a strong impact on such willingness. The Arab Gulf is an interesting and relevant environment in which to apply contemporary career concepts. It is a rapidly changing society, where up until very recently, citizens were all but guaranteed overpaid and under-demanding public-sector employment as part of the dominant social contract (Forstenlechner & Rutledge, 2010).

This has created a labor market highly segmented along lines of nationality, with 46 HUMAN RESOURCE MANAGEMENT, JANUARY–FEBRUARY 2014

Human Resource Management DOI: 10.1002/hrm

In this study we aim to explore what drives career choices under these very particular circumstances. earning potential largely predictable by nationality (Abdalla, Al Waqfi, Harb, Hijazi, &

Zoubeidi, 2010) and a private sector effectively outsourced to foreigners. More recently, however, demographic pressures, the increasing share of the budget going into public-sector salaries, and rapid transformation of wider society are challenging the transfer mechanism of public-sector employment:

Both UAE and Qatar doubled their populations; mostly through migration, taking five years and one, respectively (Forstenlechner &

Rutledge, 2011). The three largest expatriate labor markets (Saudi Arabia, Qatar, and the

UAE) rank among the 10 most desired destinations for globally mobile professionals in a recent expatriate survey (HSBC, 2012), when ranked by earning potential and career impact.

In many ways, this inward labor migration has further worsened labor market segmentation, not least by creating a need for more public-sector jobs to manage the inflow (Forstenlechner &

Rutledge, 2011), but also by further putting downward pressure on wage levels in the private sector.

Understanding this segmentation, and its sociocultural implications, is important for multinational firms (Forstenlechner & Mellahi, 2011; Harry, 2007). Multinational corporations in the Arab Gulf are under increasing pressure to support job-localization efforts. One example is the successful bid of a South Korean consortium for the biggest nuclear power deal to date in the Middle East (Stanton, 2009): The consortium won against stiff American and French competition. Their bid had a very well-developed plan for training and incorporating Emiratis at all stages and all levels, a workforce nationalization that was instrumental for the outcome.

In this study we aim to explore what drives career choices under these very particular circumstances. We do so by introducing a causal structural research model in an attempt to explore these relationships among the critical factors that influence people entering a saturated labor market to choose alternative paths. Our study deals with the willingness of young, educated Emiratis to work in the private sector. The proposed research model attempts to answer the following questions: • What are the effects of a person’s selfperceived employability, self-efficacy, career exploration, and his/her expectations toward state employment on his/her willingness to work in the private sector? • How are expectations toward state employment and self-perceived employability affected by career exploration and self-efficacy? • Is self-efficacy affected by career exploration?

There has been little research that has examined the effects of career attitudes and their relevance in non-Western, collective societies. A key practical contribution of this study lies in offering decision makers at both organizational and governmental levels ideas and advice about encouraging people to widen their employment perspectives. Such action would help the national economy to avoid the dual hazard of unemployment and underemployment, keep key roles in the economy within the influence of citizens, and decrease the necessity for policymakers to intervene through regulation. Our study contributes to the literature by demonstrating the relevance of applying contemporary career and work attitudes in a collectivist society. It also evaluates intentions to explore private-sector career opportunities; not a natural choice for Arab Gulf citizens. The study also examines the effects of local culture and the social contract on this intention. It thereby adds to knowledge about factors relevant to transitional labor markets.