The principles of Emiratisation and Saudisation – the officially sponsored schemes to encourage greater private sector penetration of local workers – are well-known and much discussed across the GCC. But while Bahrain may not have a programme that trips off the tongue in quite the same way, the idea of diversifying the economy and finding work for youthful local nationals is every bit as crucial there.

One of the smallest of the Gulf economies, Bahrain has long punched above its weight thanks to its sophisticated oil and gas infrastructure. But it was also one of the first countries in the region to begin seriously considering sector diversification, signing a free trade agreement with the US and focusing on increasing the skills of the local workforce. Central to these efforts over the past decade has been Tamkeen, the government body responsible for directing funding towards businesses, supporting entrepreneurs, overseeing training both for jobseekers and local professionals, and taking an overview of how the national workforce’s capabilities match the country’s ambitions.

With the recent axing of the 4 per cent training levy, Tamkeen has taken on an even more visible role as the principle training provider to private companies. And as Amal Al Kooheji, the organisation’s COO, explained at its headquarters in the Sanabis region of Manama, it is determined to focus both on technology and sector-specific interventions in 2016. Tamkeen has created sector advisory boards comprised of senior professionals to oversee wage subsidies, training requirements and skills. People Management found out more about the organisation’s plans, and why the economic backdrop is focusing minds on how the next generation of Bahrainis will make its living.

How would you describe Tamkeen’s overall mission?
Tamkeen was born out of labour reforms, the basic premise of which was ‘let’s not force Bahrainis on the private sector by using the quota system. Let’s remove quotas and allow Bahrainis to become competitive enough to thrive in the private sector.’ That entailed a lot of hard work because at that point the expatriate workforce was competing with the local workforce and each had its own distinct features as a labour force. You had an unfair competitive advantage in each case. Wages of expats were determined externally, so Bahrainis were at a disadvantage because they’d never be able to live by expat wages, which were set at a very low level.

Tamkeen had to consider the question ‘how do we enthuse the private sector to employ Bahrainis?’ The heart of the matter is HR, naturally, because no matter how many training programmes I fund, or how many apprenticeship or internship schemes I introduce, I will not succeed unless I have employers of choice. You must have a private sector with good HR practices, good working conditions and good corporate cultures, which is able to absorb all those Bahrainis.

How well are the principles of good HR understood within Bahraini businesses?
I don’t think we’re anywhere near best practice. A good share of the market does understand HR, but predominantly we see that within larger firms because they are better funded and better structured, so they have the ability, capacity and resources to have systems in place. Only a handful of companies look at staff engagement and corporate culture more closely.

We have professional certification schemes for all sectors, including HR, and many people have taken CIPD qualifications. But now we’re looking at what happens beyond qualifications. What do we have to do to get the owners of these firms to believe in people management and people practices? We’re looking at executive coaching – non-training solutions to help people reap more benefits from the knowledge HR already has.

What was the thinking behind the abolition of Bahrain’s training levy?
The training levy began in the 1980s and was taken from companies with 50 employees and above, which would pay 4 per cent of their expat payroll. In general, only 40 per cent of the funding was used. It wasn’t being pushed much. The government felt there was an overlap, and that Tamkeen already had a budget to spend on grants and financing schemes, as well as training employees. The private sector already pays Tamkeen’s fees, so there was a chance to alleviate the overall pressure on the private sector [by taking on additional responsibilities]. And already there are some very good examples of larger, family businesses that decided when the levy went they would put up their training budgets.

Do you see much enthusiasm yet for more strategic training, such as executive coaching and leadership development, among private firms?
Certainly, and you see it not only among employees but employers too. As the younger generation begins to take over family businesses, you see a lot of enthusiasm. They are excited about coaching. There are a lot of younger SME owners too, and a lot of start-ups have been created in the last 10 years because Tamkeen provides a lot of financing and loans. All of these support systems from the government have encouraged a lot of young people to become entrepreneurs or become self-employed. The younger generation sees a lot of alternative routes and development solutions.

How would you characterise the Bahraini workforce, and its challenges?
The biggest barrier in the private sector, when it comes to the younger, lower-wage segment, is language. It’s not a barrier for those on higher wages. They have very good English skills in comparison to the rest of the Gulf. But those lower-wage workers, because they often haven’t gone on to higher education, tend to be lacking in basic skills. But it’s also a barrier for the existing workforce in the lower-wage segments, because to progress you need language – you need to go on training programmes or go online, and everything is in English. To crack the ceiling, they have to deal with their basic skills too, and we are working on that and trying to push wages upwards.

Why do skills matter so much for the economy?
We’ve reached a point where our economy doesn’t depend solely on oil. We have a financial sector that contributes a lot, and a trade sector. The IT industry is gaining momentum and we’re focusing accelerator programmes on it. We’re doing a lot with SMEs; for example, teaching them to use cloud computing. But we have to do more.

When do you believe you will have succeeded in your mission to diversify the economy?
When we don’t have quotas, and private sector employers come and say ‘we prefer Bahrainis’. It will take a lot of effort to achieve – we need help from policymakers, unitary authorities, the Ministry of Education and the Higher Education Council. We all have to work together to make that happen.