The economic outlook might not inspire much joy, but the idea of happiness has never mattered more. In February, the UAE appointed its first minister of happiness to prioritise the topic at a national level. And across the GCC, businesses are waking up to the idea that staff who come to work with a smile on their faces are not just more satisfied – they’re more productive too.

Few people know more about the topic than Radhika Punshi. As the first person in the Middle East to be awarded a degree in positive psychology, she is at the forefront of helping organisations change the way they think about employees in her role as managing director of The Talent Enterprise in Dubai. Previously head of applied research for Aon Hewitt MENA, she is an expert on nationalisation and helping young people into the workforce and has co-authored four books on HR in the region. People Management asked her what she sees happening inside local organisations, and why happiness is far deeper than its dictionary definition.

How would you characterise the state of nationalisation across the GCC? Are local nationals better prepared for work than they used to be?

In the past, we depended on expatriates because there wasn’t the available talent among the local population. That situation is changing very quickly – there are a lot more young nationals coming into the workplace with better levels of education. A lot of ‘old school’, traditional employers – and HR people too – aren’t necessarily ready. They’re not thinking about how to attract, engage or retain that younger generation. They’re too busy following the rule book or al-kitab.

At the same time, young people still lack motivation and crucial employability skills. And there’s a misalignment in expectations between employers and local national employees. Young nationals come to work with high expectations and yet the 25-34 age group reports some of the lowest levels of employee engagement in the region. They’re not prepared for the world of work, and at times, yes, they do have a sense of entitlement. They also lack critical workplace skills such as grit, resilience, a growth mindset, self-confidence and social skills.

Where do those misalignments come from?

This is a complex issue and is affected by our education systems as well as the fragmented structure of our labour markets. Young people don’t feel prepared for work. Six out of 10 students don’t believe their education is relevant and even more end up working in areas different from their academic specialisations.

When it comes to work, companies often haven’t fully thought through their employer brand and working culture for millennials. Young people end up working in organisations that, to them, must look like Jurassic Park – they’re not allowed to access social media, they need to work fixed hours in the office and some may end up with old-fashioned managers who don’t know how to deal with younger people.

The role of the public sector is also interesting because not only is it the largest employer in most GCC countries, it’s also the regulator. At times, it can distort the balance within the labour market because of the level of salary, benefits and incentives it offers, often competing for national talent.

How are more progressive private sector employers approaching nationalisation?

It’s nice to see more and more employers taking a long-term view of the skills issue; some are working with universities to design courses that develop the skills they need, and they’re starting to offer their own traineeships and apprenticeship programmes that recognise the gaps in education.

People talk a lot about nationalisation, but it’s not the same old discussion any more. This is Nationalisation 2.0. It’s not about what percentage of nationals you have in your organisation. In the long run, nationalisation strategies need to be sustainable to truly build knowledge-based economies. It might be that you have fewer nationals, for example, but you have a better quality. A lot of businesses will struggle with that shift.

How would you sum up the concept of positive psychology?

All of the positive social sciences are quite new and it’s amazing that they’re fundamentally shifting how we make the most of human potential – how do we get average people to be their best selves, and get organisations to thrive? It’s not ‘happiology’ or self-help or big yellow smiley faces. It is a science, linking aspects such as neuroscience and physiology to outcomes of happiness.

A lot of research talks about three types of happiness. One is the pleasurable type of happiness. The other two are deeper and longer term, centred on meaning and purpose, and accomplishment and achievement. Organisations can learn to focus on longer-term wellbeing and happiness, shifting their orientation from the momentary pleasure that might come from a rise in your salary to something much more meaningful such as an alignment to the purpose of the company, or a deep sense of empowerment and achievement.

We are beginning to understand the link between happiness and the sort of outcomes that really matter to businesses, such as elevated productivity and performance, higher levels of creativity, better decision-making, positive health outcomes and employee wellbeing. HR can start to understand the organisational, environmental and psychological factors that lead to high performance and begin to apply them elsewhere.

What does that mean for the notion of employee engagement?

Our research shows that close to 40 per cent of variance in engagement is down to the individual – their personal strengths, motives and values – and has nothing to do with the organisation. There has also been a significant shift away from a standard once-a-year survey to more ongoing weekly, monthly or even daily measures of motivation – engagement is a ‘state’ of being and an annual survey runs the risk of becoming outdated as soon as it gets completed.

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At the CIPD, we champion better work and working lives. We help organisations to thrive by focusing on their people, supporting economies and society for the future. We lead debate as the voice for everyone wanting a better world of work.