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UAE youth unemployment

The Youth Unemployment Problem: Why it Matters & What You Can Do

Unemployment is not fun.

“It was a whole year from when I graduated to when I landed my first opportunity and that unemployment period was great as a break but after a few months, it got to me.”

Not for one person and not for the average 92 million unemployed youths in the Middle East at any given time.

“After I graduated from university, I applied for, probably, hundreds of jobs. 

I felt the pressure when someone asked me, “what have you been up to?“ and I kinda had to be like “hahaha… uuhhhh… nothing…”. I felt discouraged, demotivated, and just wondered, ‘why wasn’t anybody taking a chance on me?’ I knew I had the right skills, I could contribute… But I felt purposeless. You always need some sort of direction in your life and during that time, it was extremely hard for me to figure out who to even approach for a single interview, let alone get hired!”

– Fatima*, B.A. in English Literature, American University of Sharjah 

* * *

At Oliv, we measure all of our success against our North Star metric, that is, ‘the number of people getting hired’.

Our North Star metric is the figure we strive to bump up, little by little, every day.

And on the other hand, we have a figure that we try to nudge down, with every hire: the 27.2% youth unemployment rate in the Middle East.

While the 27.2% youth unemployment rate spans across entire region, a number that sits closer to home for us is 11.4%: the youth unemployment rate in the UAE.

UAE youth unemployment graph

We should consider ourselves lucky for an average that is almost three times lower than the regional statistic, that too without some of the major political, structural, and social issues of our neighbouring countries.

However, according to the World Economic Forum, the region’s 27.2% youth unemployment rate is the highest in the world, and does not include the 40 million individuals who are underemployed, the 27 million individuals not participating in any sort of training or education, or the one quarter youth population in GCC countries actively engaged in the labour market.

That’s around 92 million young people unemployed, underemployed, or not participating in any sort of education or professional development program; more than the entire population of Egypt.

What’s the greater problem?

At first glance, the problem seems to be limited to the 27% youth unemployment rate. However, an unpopular private sector, rising social unrest, low quality of education, slow economic growth, and dependence on the public sector all play a significant push and pull role in driving employment down. It is difficult to say whether the staggering levels of youth unemployment have been a result of the above factors, or a cause.

The International Labour Organisation’s World Employment Social Outlook Trends report from 2016, shows that youth unemployment affects not just the youth themselves but also regional peace, gender disparities, and overall economic prosperity.

Studies have found a positive relationship between youth unemployment rates and incidences of political or social unrest in the region. While political and democratic factors are the root cause of such unrest, the lack of career opportunities and opportunities for positive, social engagement often lead to extremely high levels of social discord. As a direct result of the increasing levels of youth unemployment, the economic growth in the region has also suffered.

These high unemployment rates affect people on a personal level, but also socially, culturally, and economically. Unemployed youth enter into a vicious cycle of outdated education, stagnating skillsets, and dwindling confidence levels, which means even when they are able to find employment, they’re not able to benefit 100%.

Where is the problem coming from & why does it matter?

Youth unemployment is a waste of human potential

Today’s youth will be the one to sustain the economy, pensioners, and infrastructure of the future. They’ll be the ones behind any and all new developments in art, medicine, and technology. They are the creatives, healers, and investors of tomorrow.

A significant amount of human potential goes wasted because of unemployment, and with each day, young people stagnate in their skillset, become increasingly hopeless and lacking in confidence.

Labor laws around the region, and up until recently in the UAE, are very confusing, as they lack a guided framework for employers/employees to use. This is especially confusing for young workers. People without experience have a difficult time demonstrating why they should be hired instead of an seasoned professional. However, what youth talent lacks in experience, they more than make up for in drive, skill, and adaptability.

The popularity of the public sector is ever-rising

The public sectors of the Middle East are struggling to keep up with the employment demands of its citizens in a two-part struggle:

1) An oversaturated public sector with a surplus of talent

By 2020, over 2 million GCC nationals will be joining the workforce, between 1.2 to 1.6 million by 2018 alone, and the International Monetary Fund expects over half a million job seekers to be unemployed, excluding the existing unemployed force of 1 million. Most, if not all of them, with a preference to work in the public sector.

As the region stands to face unemployment problems with the surge of early-stage startups, visa and hiring regulations, talent acquisition struggles, and high cost of living, both the public and private sector need to prepare to absorb the increasing demand.

It goes without saying that the Arab world is going through a rapid population surge and by 2025, the population of youth workers, between the ages of 15 and 24, will be 58 million, which means many more millions of unemployed youth.

These outstanding numbers cost the Middle East region around $40 billion a year in wasted talent and underutilized opportunities. But that’s not the only financial kick from unemployment…

2) Dependence on public sector stipends and subsidies

Stipends and subsidized employment or localization programs have long supported GCC youth personally and professionally, something that the youth have been able to transfer into successful entrepreneurship experiences and career development. However, while this form of support has overwhelmingly helped the youth, it has recently begun to influence unemployment levels. This is something we come across a lot, whether it’s because the salary expectations are higher than average or because smaller companies are hiring more cautiously due to rising expenses.

The youth is unsatisfied with the quality of their education

According to the Arab Youth Survey, 41% of GCC youth said they were “very concerned” about the quality of education they were receiving in their country and 50% of the youth felt that the educational system did not prepare them for the future or the job market. These are staggering figures and one of the reasons why the youth feel concerned is because the education they’re receiving is over 50 years old, unchanged, and under-managed by the government.

The educational content is still very much focused on older, out-dated, theory and disciplines as opposed to multidisciplinary, ‘cutting-edge’, experiential, and hands-on learning in classic disciplines as well as today’s booming industries such as digital marketing, AI, logistics, and web technology.

Fluctuating infrastructure and political unrest

The Arab Youth Survey also found that much of the young people surveyed linked the rise of ISIL/terrorism with rising youth unemployment. This is a self-fulfilling prophecy as the crumbling infrastructure and economy in some countries leaves thousands of young people hopeless and unemployed. The lack of opportunities to make societal contributions often give rise to radicalization or other social disruption. Not surprisingly, 13% of young people believe educational reform should be their government’s priority in battling ISIS, 12% believe it should be job-creation for young people, and another 13% believe military action is the only solution.

Private sector diversifying, but slowly

As the population of nationals is increasing across the GCC region, the expenses associated with hiring nationals in the public sector are following that trend as well. At this time, the shift away from a oil/resource-based economy towards a more technology and knowledge-based economy is crucial and well underway as the private sector begins to prepare to absorb these changes and a rising job seeker population.

The private sector is aiming to become a hub for job creation, however until that happens, the heavy dependence on the public sector for subsidized programs and government spending will work against the region’s youth employment efforts as the private sector continues to be overshadowed by the public sector.

The public sector remains the top choice of employment for nationals yet the availability is dwindling. As such, economic diversification is extremely important to help keep youth unemployment levels down. This diversification would support not just the growing number of talented, job-seeking youth, but also increase productivity and create sustainable growth that is not reliant on oil.

What we are doing

As part of our mission to reverse the increasing youth unemployment rate in the UAE, we nurture and train the youth in employability and soft skills, as well as connect them to career opportunities with thousands of employers in the UAE.

We support academic institutions with employment placements, highlight the unemployability problem to our employers, and help businesses set up the best internship programs and make hiring a seamless process.

We do our best to support candidates in their career journey, employers with their talent hunt, and academic institutions with their career coaching and placement efforts to help curb the unemployment rate from all angles.

What the UAE is doing

The UAE government presented the UAE Vision 2021 goals, which demonstrate a commitment to addressing the growing problem of youth unemployment alongside the overall goal to make the UAE one of the most competitive, knowledgeable, and innovative economies in the world.

UAE Vision 2021

One of the four areas of focus is:

“United in Knowledge” to:

  • Harness the full potential of human capital in the public and private sector
  • Build a sustainable and diversified economy
  • Nurture a knowledge-based and highly productive workforce

The goal is to achieve a 40% share of ‘knowledge workers’ in the labor force by 2021 (compared to the current rate of 24.55%).

Practical things businesses can do to solve their skills gap problem

Host more internships

Skills can only be taught at university to a certain extent. The ILO explains that certain skills cannot be fully understood until learned through an internship or training experience. Internships teach the youth job-hunting, networking, and communication skills that are often unrelated to, but just as important as, the role-related skills. They also provide students and graduates with a teaser of their first real job by helping them build a portfolio of experience, and are a sure fire way to equip potential employees with the exact skillset that businesses may be lacking.

Employers are also able to build fresh talent pipelines and keep up with the changing demands within their industry, all while saving on recruitment costs.

Structure on-the-job training

While this is something that happens naturally over the course of an internship experience, it is important for businesses to recognize the necessity of having a structured internship program that teaches interns the role-specific skills, like sales and BD, alongside general soft skills, such as high aptitude and time management. This type of training ensures candidates are set up for success within their current role and next.

Organize professional mentoring

Professional mentoring conducted from within an organization grants them the guidance they need to evolve and grow in the right direction within their role. Mentoring is an inexpensive way to provide surface level career guidance, expand horizons and networks, and teach important skills.

Practical things educational institutions/universities can do

Implement flexible curricula to keep up with market demands

One of the main concerns from the 2016 Arab Youth Survey was that the youth felt their education did not cater sufficiently to the direction and growth of the economy in the region, with 39% of the youth being “very concerned” about the quality of education in their country – a 7% increase from 2016.

Universities and other academic institutions should consider implementing more flexible curricula that focus on teaching students the skills and theory of evolving market demands and emerging technologies.

Increase experiential learning experiences

Practical experiences, like internships and traineeships, are the only way students are able to put into practise the theories they’ve learned in the classroom. It’s one of the only ways the youth can get a real feel for what working life is like – and thus are better prepared for when they secure their first role.

Mandating an internship or practicum experience into the curriculum of the course is an excellent way to ensure students are graduating with some experience, even at a foundational level.

Invest in nurturing students with career coaching

The transitions from student to professional is difficult even when a student is 100% sure of their career path. Universities and other academic institutions are in a great position to support their students with additional career development and coaching services, while simultaneously benefiting from high placement percentages.

Youth unemployment has long been, for the UAE, the region, and the world at large, an ever-fluctuating issue. What remains a constant is the fact that unemployed youth is a waste of human potential.

While we nurture and provide opportunities for the youth, the UAE government continues to develop strategies to propel the entirely of its unemployed populations, and the businesses around the region continuously innovate to open more doors to youth talent.

As all the different parties work together, in their own ways, to achieve the North Star metric, it is by harnessing the potential of our youth that we will ultimately progress into a better future for all.

PS. We’re sharing a lot more advice on curbing youth unemployment, get them straight to your inbox

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