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Low labor productivity hinders economic growth
July 7, 2018, 3:21 pm
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Labor productivity growth in Kuwait dropped to minus 2.74 percent in December 2017 from the minus 2.62 in 2016. Figures from the CEIC global database that provides data on over 195 economies around the world also show that in the 25-year-period from 1992 to 2017 labor productivity in the country has averaged a dismal minus 1.97 percent — ranging from a low of minus 13.97 percent in 2009 to a high of 4.05 percent in 2011.

Growth in labor productivity, which is calculated from annual GDP per person employed, is inextricably linked to the increase in productivity that is critical to economic development of a country. In general, if one were to use the Return on Investment (ROI) as a metric for labor productivity, it is worth asking whether the KD12 billion that the government spends annually on salaries and wages of public-sector employees is generating the expected returns, and helping with the productivity growth that Kuwait needs to go forward.

Among the reasons for poor productivity at public-sector organizations and paltry performance of workers in this sector, are the lack of any meaningful employee engagement and the lackadaisical attitude to work prevalent among many in the national workforce. With little or no worthwhile monitoring, measuring and managing of employee productivity or engagement, it is no wonder that performance of many public-sector employees is at such low levels.

Employee engagement in the workplace, which is often manifested through subtle signs such as creativity, energy and enthusiasm, and is critical to maximizing productivity, efficiency and profitability of the organization, is obvious by its absence in most government entities. On most weekdays it is only normal to find many vacant desks in government offices; this absenteeism reaches a peak in the days leading up to or following major holidays such as Eid or National and Liberation Days.

Besides prevalent truancy, impersonating absent personnel by signing attendance for them is also quite common in many offices. Several years back, an investigation team from Kuwait’s Civil Service Commission (CSC) reportedly discovered an expatriate employee in the public sector punching the daily attendance cards of several nationals. When confronted, the expatriate apparently said, “What can you do to me; report me to the manager? But I am the one who punches his card every day?”

Unearned paid-time-off has bedeviled authorities for ages. Various methods to monitor and prevent absenteeism in the workplace have been tried, from manual time sheet markings to automated attendance-stamping machines, from CCTV camera recorders to more advanced biometric devices such as fingerprint and facial recognition scanners, the government has tried it all. But at each stage these initiatives have been thwarted by disingenuous employees who have discovered innovative ways to continue their skiving.

In a bid to improve workplace performance and overall productivity of the economy, the government tabled a strategic public-sector payroll bill reform in parliament. However, the ‘strategic alternative’ bill, which was the result of over a decade of research and deliberation by Kuwait CSC in association with the Kuwait Fund, the Kuwait Investment Authority and international consultants, with international partners, has so far failed to win approval from lawmakers.

A government job remains the preferred career choice of most nationals as this entails higher salaries, job-security and generous fringe benefits, including shorter working hours, longer holidays and attractive health and pension schemes. For instance, while their counterparts in the private-sector work for eight or more hours per day, a public-sector employee works for seven hours. In addition, a new law passed in 2006 gives government workers a 30-minute leeway in arriving for work, while women employees have the privilege of leaving 15-minutes early due to the ‘pressures of family obligation’.

Moreover, a national hired in the public-sector cannot be fired unless under extreme circumstances, and there are hardly any instances where a worker has been terminated because of incompetency or dereliction of duty. The plethora of privileges without any correlated performance evaluation has meant that government employees often tend to take their job for granted, with absenteeism and poor performance being accepted as the norm in public-sector.

According to data from the Pubic Authority for Civil Information (PACI), at the start of 2018 the government sector employed over 84 percent of the total national workforce of around 384,000. In contrast, Kuwaitis accounted for less than 4 percent of the 1,599,400 workers employed in private-sector. Finding suitable government employment for the thousands of young citizens who enter the workforce each year is not only becoming difficult for the government, but it will soon become unfeasible as well.

Political compulsions to employ more nationals in public-sector has led the government in recent months to embark on a ‘Kuwaitization’ drive that aims to eventually replace most expatriates in government jobs with citizens. According to the CSC, a total of 1628 expatriates were terminated from public-sector jobs in the first-quarter of 2018, an increase of 144 percent from the 666 foreigners reported to have been terminated in 2017.

The CSC figures also show that during the first-quarter of 2018, a total of 2,478 nationals were hired in the public-sector. This reveals the challenges that authorities face in finding suitable nationals to replace retrenched expatriates. Many of the jobs held by expatriates in public-sector, such as low-level technicians, teachers or nurses, have no applicants from among nationals, either because that particular work is deemed as being too demeaning for a Kuwaiti, or simply because they are not qualified for those posts.

Attempts to encourage the private sector to employ more young nationals has so far proven to be less than successful. Quotas aimed at forcing private sector firms to hire more locals has not taken off as many firms have found creative measures to circumvent the regulations. Also, despite the country having one of the most extensive private sector employment support programs that provides substantial incentives to nationals working in private-sector, the uptake so far has been less than desirable.

In a competitive business environment that values productivity, many private sector employers prefer the cost-effectiveness of hiring expatriate labor. The complexities of recruiting and managing nationals who often lack the job skills desired by the marketplace has deterred private sector employers from hiring them. For their part, many young citizens would rather sit around unemployed in the hope of obtaining a government placement than take up employment in the private-sector.

Low labor productivity hinders economic growth

Labor productivity growth in Kuwait dropped to minus 2.74 percent in December 2017 from the minus 2.62 in 2016. Figures from the CEIC global database that provides data on over 195 economies around the world also show that in the 25-year-period from 1992 to 2017 labor productivity in the country has averaged a dismal minus 1.97 percent — ranging from a low of minus 13.97 percent in 2009 to a high of 4.05 percent in 2011.

Growth in labor productivity, which is calculated from annual GDP per person employed, is inextricably linked to the increase in productivity that is critical to economic development of a country. In general, if one were to use the Return on Investment (ROI) as a metric for labor productivity, it is worth asking whether the KD12 billion that the government spends annually on salaries and wages of public-sector employees is generating the expected returns, and helping with the productivity growth that Kuwait needs to go forward.

Among the reasons for poor productivity at public-sector organizations and paltry performance of workers in this sector, are the lack of any meaningful employee engagement and the lackadaisical attitude to work prevalent among many in the national workforce. With little or no worthwhile monitoring, measuring and managing of employee productivity or engagement, it is no wonder that performance of many public-sector employees is at such low levels.

Employee engagement in the workplace, which is often manifested through subtle signs such as creativity, energy and enthusiasm, and is critical to maximizing productivity, efficiency and profitability of the organization, is obvious by its absence in most government entities. On most weekdays it is only normal to find many vacant desks in government offices; this absenteeism reaches a peak in the days leading up to or following major holidays such as Eid or National and Liberation Days.

Besides prevalent truancy, impersonating absent personnel by signing attendance for them is also quite common in many offices. Several years back, an investigation team from Kuwait’s Civil Service Commission (CSC) reportedly discovered an expatriate employee in the public sector punching the daily attendance cards of several nationals. When confronted, the expatriate apparently said, “What can you do to me; report me to the manager? But I am the one who punches his card every day?”

Unearned paid-time-off has bedeviled authorities for ages. Various methods to monitor and prevent absenteeism in the workplace have been tried, from manual time sheet markings to automated attendance-stamping machines, from CCTV camera recorders to more advanced biometric devices such as fingerprint and facial recognition scanners, the government has tried it all. But at each stage these initiatives have been thwarted by disingenuous employees who have discovered innovative ways to continue their skiving.

In a bid to improve workplace performance and overall productivity of the economy, the government tabled a strategic public-sector payroll bill reform in parliament. However, the ‘strategic alternative’ bill, which was the result of over a decade of research and deliberation by Kuwait CSC in association with the Kuwait Fund, the Kuwait Investment Authority and international consultants, with international partners, has so far failed to win approval from lawmakers.

A government job remains the preferred career choice of most nationals as this entails higher salaries, job-security and generous fringe benefits, including shorter working hours, longer holidays and attractive health and pension schemes. For instance, while their counterparts in the private-sector work for eight or more hours per day, a public-sector employee works for seven hours. In addition, a new law passed in 2006 gives government workers a 30-minute leeway in arriving for work, while women employees have the privilege of leaving 15-minutes early due to the ‘pressures of family obligation’.

Moreover, a national hired in the public-sector cannot be fired unless under extreme circumstances, and there are hardly any instances where a worker has been terminated because of incompetency or dereliction of duty. The plethora of privileges without any correlated performance evaluation has meant that government employees often tend to take their job for granted, with absenteeism and poor performance being accepted as the norm in public-sector.

According to data from the Pubic Authority for Civil Information (PACI), at the start of 2018 the government sector employed over 84 percent of the total national workforce of around 384,000. In contrast, Kuwaitis accounted for less than 4 percent of the 1,599,400 workers employed in private-sector. Finding suitable government employment for the thousands of young citizens who enter the workforce each year is not only becoming difficult for the government, but it will soon become unfeasible as well.

Political compulsions to employ more nationals in public-sector has led the government in recent months to embark on a ‘Kuwaitization’ drive that aims to eventually replace most expatriates in government jobs with citizens. According to the CSC, a total of 1628 expatriates were terminated from public-sector jobs in the first-quarter of 2018, an increase of 144 percent from the 666 foreigners reported to have been terminated in 2017.

The CSC figures also show that during the first-quarter of 2018, a total of 2,478 nationals were hired in the public-sector. This reveals the challenges that authorities face in finding suitable nationals to replace retrenched expatriates. Many of the jobs held by expatriates in public-sector, such as low-level technicians, teachers or nurses, have no applicants from among nationals, either because that particular work is deemed as being too demeaning for a Kuwaiti, or simply because they are not qualified for those posts.

Attempts to encourage the private sector to employ more young nationals has so far proven to be less than successful. Quotas aimed at forcing private sector firms to hire more locals has not taken off as many firms have found creative measures to circumvent the regulations. Also, despite the country having one of the most extensive private sector employment support programs that provides substantial incentives to nationals working in private-sector, the uptake so far has been less than desirable.

In a competitive business environment that values productivity, many private sector employers prefer the cost-effectiveness of hiring expatriate labor. The complexities of recruiting and managing nationals who often lack the job skills desired by the marketplace has deterred private sector employers from hiring them. For their part, many young citizens would rather sit around unemployed in the hope of obtaining a government placement than take up employment in the private-sector.

Low labor productivity hinders economic growth

Labor productivity growth in Kuwait dropped to minus 2.74 percent in December 2017 from the minus 2.62 in 2016. Figures from the CEIC global database that provides data on over 195 economies around the world also show that in the 25-year-period from 1992 to 2017 labor productivity in the country has averaged a dismal minus 1.97 percent — ranging from a low of minus 13.97 percent in 2009 to a high of 4.05 percent in 2011.

Growth in labor productivity, which is calculated from annual GDP per person employed, is inextricably linked to the increase in productivity that is critical to economic development of a country. In general, if one were to use the Return on Investment (ROI) as a metric for labor productivity, it is worth asking whether the KD12 billion that the government spends annually on salaries and wages of public-sector employees is generating the expected returns, and helping with the productivity growth that Kuwait needs to go forward.

Among the reasons for poor productivity at public-sector organizations and paltry performance of workers in this sector, are the lack of any meaningful employee engagement and the lackadaisical attitude to work prevalent among many in the national workforce. With little or no worthwhile monitoring, measuring and managing of employee productivity or engagement, it is no wonder that performance of many public-sector employees is at such low levels.

Employee engagement in the workplace, which is often manifested through subtle signs such as creativity, energy and enthusiasm, and is critical to maximizing productivity, efficiency and profitability of the organization, is obvious by its absence in most government entities. On most weekdays it is only normal to find many vacant desks in government offices; this absenteeism reaches a peak in the days leading up to or following major holidays such as Eid or National and Liberation Days.

Besides prevalent truancy, impersonating absent personnel by signing attendance for them is also quite common in many offices. Several years back, an investigation team from Kuwait’s Civil Service Commission (CSC) reportedly discovered an expatriate employee in the public sector punching the daily attendance cards of several nationals. When confronted, the expatriate apparently said, “What can you do to me; report me to the manager? But I am the one who punches his card every day?”

Unearned paid-time-off has bedeviled authorities for ages. Various methods to monitor and prevent absenteeism in the workplace have been tried, from manual time sheet markings to automated attendance-stamping machines, from CCTV camera recorders to more advanced biometric devices such as fingerprint and facial recognition scanners, the government has tried it all. But at each stage these initiatives have been thwarted by disingenuous employees who have discovered innovative ways to continue their skiving.

In a bid to improve workplace performance and overall productivity of the economy, the government tabled a strategic public-sector payroll bill reform in parliament. However, the ‘strategic alternative’ bill, which was the result of over a decade of research and deliberation by Kuwait CSC in association with the Kuwait Fund, the Kuwait Investment Authority and international consultants, with international partners, has so far failed to win approval from lawmakers.

A government job remains the preferred career choice of most nationals as this entails higher salaries, job-security and generous fringe benefits, including shorter working hours, longer holidays and attractive health and pension schemes. For instance, while their counterparts in the private-sector work for eight or more hours per day, a public-sector employee works for seven hours. In addition, a new law passed in 2006 gives government workers a 30-minute leeway in arriving for work, while women employees have the privilege of leaving 15-minutes early due to the ‘pressures of family obligation’.

Moreover, a national hired in the public-sector cannot be fired unless under extreme circumstances, and there are hardly any instances where a worker has been terminated because of incompetency or dereliction of duty. The plethora of privileges without any correlated performance evaluation has meant that government employees often tend to take their job for granted, with absenteeism and poor performance being accepted as the norm in public-sector.

According to data from the Pubic Authority for Civil Information (PACI), at the start of 2018 the government sector employed over 84 percent of the total national workforce of around 384,000. In contrast, Kuwaitis accounted for less than 4 percent of the 1,599,400 workers employed in private-sector. Finding suitable government employment for the thousands of young citizens who enter the workforce each year is not only becoming difficult for the government, but it will soon become unfeasible as well.

Political compulsions to employ more nationals in public-sector has led the government in recent months to embark on a ‘Kuwaitization’ drive that aims to eventually replace most expatriates in government jobs with citizens. According to the CSC, a total of 1628 expatriates were terminated from public-sector jobs in the first-quarter of 2018, an increase of 144 percent from the 666 foreigners reported to have been terminated in 2017.

The CSC figures also show that during the first-quarter of 2018, a total of 2,478 nationals were hired in the public-sector. This reveals the challenges that authorities face in finding suitable nationals to replace retrenched expatriates. Many of the jobs held by expatriates in public-sector, such as low-level technicians, teachers or nurses, have no applicants from among nationals, either because that particular work is deemed as being too demeaning for a Kuwaiti, or simply because they are not qualified for those posts.

Attempts to encourage the private sector to employ more young nationals has so far proven to be less than successful. Quotas aimed at forcing private sector firms to hire more locals has not taken off as many firms have found creative measures to circumvent the regulations. Also, despite the country having one of the most extensive private sector employment support programs that provides substantial incentives to nationals working in private-sector, the uptake so far has been less than desirable.

In a competitive business environment that values productivity, many private sector employers prefer the cost-effectiveness of hiring expatriate labor. The complexities of recruiting and managing nationals who often lack the job skills desired by the marketplace has deterred private sector employers from hiring them. For their part, many young citizens would rather sit around unemployed in the hope of obtaining a government placement than take up employment in the private-sector.

 

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