Arthur D. Little: Expat skill transfer has not delivered

Forty years on and the Middle East’s oil and gas sector still relies on a highly paid, short-term, expatriate workforce to exploit development and exploration opportunities in the region, according to a new report released today by global management consultancy Arthur D. Little.  Despite the region’s original intention of developing a local talent pool through a gradual and systemic knowledge and skills transfer, today the Middle East’s national oil companies (NOCs) continue to rely on expatriate talent.  The report, “Expat Games,” warns that as NOCs seek to expand their presence in the global energy market against the background of an ageing expatriate workforce, the pressure is now greater than ever before to develop local capability and local opportunities. According to Arthur D. Little’s report, major changes within the oil and gas sector are driving Middle Eastern governments and NOCs to be more committed than ever to ensuring a successful skill transfer from expatriate to local talent.  These changes include:

  • NOCs’ aspirations to move into the global energy market
  • Increasing local unemployment
  • Need to retain local graduate talent
  • Maturing oil and gas assets require more proactive and expert management
In its latest report, Arthur D. Little claims that the ‘unwritten rules of the game’ and systemic lack of follow through have caused the major stumbling blocks to a successful skills transfer in the Middle East oil and gas market. The report goes on to identify five of these specific ‘unwritten rules’ that Middle East governments, NOCs, and the local industry must address in order to deliver on the promise of a locally-based workforce for the region’s oil and gas sector:
  • Government targets must be enforced through regulation and fines
  • Local employees need opportunities to master new skills “in the field”
  • Drive to complete short-term milestones leads to a lack of emphasis on learning objectives
  • “Doubling up” of local and expatriate staff  
  • Hierarchical, centralized, and slow-moving corporate business models
"Unless the Middle East energy sector begins to address the ‘unwritten rules of the game’ now, ultimately the lack of effective skills transfer will slow progress and prevent the NOCs from growing into truly global players," said Tony Court, Director and Service Leader within Arthur D. Little’s Operations Management practice. “However, for the first time ever, now there is a catalyst for change – pressure is on local governments to increase localization and cash in on the development dividend from its years of heavy expatriate investment."

According to the report, the current skills gap cannot be solved with a single line of attack. Given the urgency and severity of some local labor shortages, it is vital the industry begin to find robust ways of accelerating local staff development, gain greater leverage from expatriate staff, and align the need of all stakeholders to effectively deliver results.

The Expat Game report is now available for download at www.adl.com/expatgames.

Notes for Editors

About Arthur D. Little
Arthur D. Little (ADL), founded in 1886, is a leading global management consulting firm that links strategy, innovation and technology to master complex business challenges while delivering sustainable results to our clients. Arthur D. Little has a collaborative client engagement style, exceptional people and a firm-wide commitment to quality and integrity.  ADL is proud to serve many of the Fortune 100 companies globally in addition to many other leading firms and public sector organizations.

Further Information

Further information from: Tony Court
Arthur D. Little
Tel: +44 (0) 7884 188 061
court.tony@adlittle.com Sue Glanville/Maita Soukup
Say Communications
Tel: +44 (0)208 971 6423/6421
sglanville@saycomms.co.uk
msoukup@saycomms.co.uk