A report sponsored by the International Financial Corporation, a member of the World Bank Group, and conducted by the Wamda Research Lab specialising in small- and medium-sized enterprises in the region, has found that although entrepreneurs are creating jobs in the Middle East and North Africa, they often struggle to find and retain talented employees.
The report, done in partnership with Bayt and Beirut Digital District, found that just 12% of people want to work for a startup. Of the interviewed workforce, 64% said they would be more interested in employment with a large corporation, while 51% stated they would be content in a governmental job.
This diversion of qualified labour often limits startups’ growth potential, despite startups being an increasingly important source of employment in a region plagued by unemployment where youth unemployment stands at 51.4% in Egypt, 34% in Lebanon, and 24.1% in Jordan.
To reverse the trend, the report recommended that perspective employers offer more incentives to employees, including stock options, and look for talent in new places, such as universities.
“Startups have to tap into a pool of talented workers in order to be able to scale, create jobs, and drive the kind of economic growth this region so badly needs,” says Elias Boustani, head of operations at Wamda. The report, titled Access to Talent for MENA’s Entrepreneurs, surveyed 963 entrepreneurs and 1,697 workers.
In another key result, it found that while startups have openings, they often struggle to find employees with the right technical and life skills employers look for now, with 42% of employers complaining about employee motivation, 39% citing lack of personal independence, and 37% desiring employees with high aptitude.
“MENA, more than most regions, faces the acute challenge of generating a large number of jobs very quickly,” said Mouayed Makhlouf, IFC Director for the Middle East and North Africa.
Skill development leaves something to be desired as entrepreneurs have difficulty finding hires with sales, business development, and management skills.
Entrepreneurs and startups are committed to the region. Outside of the UAE, 94% of hires at startups come locally, not from abroad. Egypt, Lebanon, and Jordan also have some of the most developed labour forces in the region.
However, there remains a gap between salary expectations and offerings as just over 50% of entrepreneurs in MENA offer salaries ranging from $250 to $1,000 per month, but only 13% of the workforce is willing to work for less than $1,000 per month.