Middle East & Africa

As market conditions continue to present relentless labor shortages across many regions, the Middle East and Africa have gained popularity among organizations exploring destinations for off-shore hiring.

Egypt

Egypt offers not only potential for more cost-effective labor, but also a skilled and diverse workforce – two key considerations for organizations considering business process outsourcing (BPO). The World Economic Forum notes that medium and high-skilled jobs make up 90% or more of the employment in Egypt, indicating the presence of skilled talent.

Egypt is a lower-middle income country with a population exceeding 111 million and a current labor force of 31 million. According to World Bank, the labor force has grown by 6% over the last decade and this trend is expected to continue. The birth rate has been on the rise since the mid-2000s and as this generation enters working age, the labor force will increase as a result – a stark contrast to many other regions that are facing aging, shrinking populations.

Employment comes in two forms in Egypt – formal and informal. The workforce prefers formal employment in the public sector; however, opportunities are scarce resulting in high underutilization of talent. The World Bank notes that among individuals with advanced education (bachelor’s degree or above), 2.9 million (15%) are unemployed. The Egyptian government recognizes the economic potential in outsourcing and, in 2022, launched the “Digital Egypt Strategy for the Offshoring Industry 2022-2026” with a goal to triple revenue generated from offshoring services through 2026.

Egypt is a highly sought-after destination for call centers, however, there are limited technology parks to adequately support the complexities of these operations. Organizations interested in pursuing Egypt for offshoring may have to carry more of the infrastructure burden but will ultimately benefit from the large pool of formally unemployed, young, well-educated talent waiting for an opportunity.

United Arab Emirates

The United Arab Emirates (UAE) is a dynamic market gaining traction among organizations seeking global expansion. Similar to Egypt, the UAE is an attractive market for BPO as the country offers a skilled and diverse workforce while remaining a cost-effective option. The UAE is a global leader in oil and gas production, a core component of the economy which accounts for 30% of annual GDP. The Organization of the Petroleum Exporting Countries (OPEC) recently extended cuts to the permitted levels of oil and gas production through 2024; however, non-oil industries, like construction and real estate, have been on an upward trend and are expected to stimulate the economy.

The Ministry of Human Resources & Emiratisation has implemented several initiatives to expand non-oil industries and increase participation among the local labor force – levels have been on a slow uptick since 2020 but remain below 50%. The same report from the Swiss Re Institute notes that unemployment insurance was introduced in January 2023 to provide a sense of financial security and entice more workers to join the labor force. And to further encourage participation, employees may work for two employers and temporary positions are now permitted.

Furthering the role of the manufacturing industry in the national economy is a primary focus of the UAE. “Operation 300bn” was launched in 2021 and outlines a 10-year plan to more than

double the industrial contribution to GDP. The strategy aims to upskill industrial workers, drive adoption of sustainable technology, foster healthy competition and attract foreign investment.

The UAE, like many other emerging markets, has limitations around offshoring engagements to protect local organizations. Becoming familiar with the nuanced tax and legal requirements of doing business in the UAE will be key for foreign organizations looking to benefit from the opportunities this market has to offer.

Nigeria

As organizations continue to navigate intense labor shortages, there is a growing interest in expanding operations into Africa. Population growth is booming and by 2050, it is projected that 25% of the global population, 2.5 billion, will be African.

By 2050, Nigeria’s population is expected to surpass 401 million, which will make it the third-most-populous country. Unprecedented growth is occurring among the working-age population but at the same time, emigration pressures are mounting due to misaligned skills and lack of available roles in Nigeria. From 2010 to 2018, the labor force grew by 25 million and simultaneously, the unemployment rate increased by 13%; in other words, there were no available opportunities for this influx of talent. To employ the projected working-age population by 2030, Nigeria needs to create 30 million jobs and is only on track to create 3 million.

Africa will emerge as a key piece of the global workforce. Many large global tech companies have deployed in Africa to capitalize on this talent surge. The question is: does the shift in how, what and where work gets done accelerate the growth of talent pools in the largest and possibly most influential continent?

Rob Marley, Executive Director in EMEA

Why Global Workforce Leaders Are Looking to Africa
With talent deficits across the world, global workforce leaders are setting their sights on Africa as the growing talent pool leads to opportunity.

For organizations seeking cost-effective strategies, Nigeria is an attractive market from a labor force perspective, however, there are some considerations. Education is not universally accessible in Nigeria and the quality of education is wide-ranging. A shortage of qualified educators and lack of training, facilities and equipment are all contributors to the growing desire of Nigerians to seek opportunities elsewhere. In 2018, over half of Nigerian youths planned to leave the country permanently with the highest rates among those educated and unemployed.

To combat emigration risk, some Nigerian states have committed to providing free training in STEM and software engineering in hopes of providing not only a meaningful career but a better quality of life. This furthers the appeal of Nigeria as an option for potential BPO needs within the IT sector; technology companies have received over $7 billion in funding by venture capitalist firms. Large global technology organizations typically carve the path forward and have already started tapping into the seemingly limitless potential Nigeria has to offer.

Botswana

Botswana is a smaller, upper-middle class country in Africa and another bright spot for future professional or technology business expansion. Benefitting from a well-functioning democracy, the economic landscape is relatively stable and follows global trends. In response to financial corruption in the 1990s, Botswana established legal controls to reduce corruption and the US and UK have since developed additional resources to ensure compliance.

The Botswana Labour Market Observatory was established in 2010 and serves as the country’s centralized online hiring platform and provider of labor market data. After registering for the website, employers upload vacancies and job seekers can upload resumes and submit applications. The site also collects demographic data, wage trends, employment and unemployment levels, and various additional economic factors.

The population has grown by more than 40% over the last two decades and educational attainment has followed a similar trend. College enrollment is up year over year since 2017 and the graduation rate is 82.1%, most recently updated in 2020. Formal unemployment is high, with unemployment sitting at 34.3% for 15- to 35-year-olds and overall employment at 26%. This presents an opportunity for organizations to take advantage of this untapped, educated workforce.

Going Global: Where, Why and How to Take Your Workforce Global

Knowing when and how to expand your business into the global market could be the key to successful growth. In a recent episode of the Subject to Talent podcast, Executive Director of Global Business Services Ayman Hamid examines the outsourcing market with Head of Global Client Development Naveen Mascreen. They examine several aspects of choosing which locations suit your business needs, including specializations, rates, competition and local laws and regulations. Tune in to hear how developing a global workforce strategy can benefit your business.

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Summary

In response to persistent talent shortages, the Middle East and Africa are gaining popularity for off-shore hiring. Egypt offers a cost-effective and skilled workforce for business outsourcing. The country’s formal and informal employment options, coupled with government initiatives, make it an attractive destination. The UAE presents a diverse workforce and is a dynamic market focused on growing non-oil industries with initiatives such as “Operation 300bn” which aim to boost the manufacturing sector. Nigeria is a cost-effective option for off-shore hiring and is on track to become one of the most populated countries globally. However, the country faces education disparities which contribute to emigration pressures. To combat this trend, some Nigerian states are offering free training in STEM fields to upskill the future workforce. Botswana is a potential hub for professional and technology expansion. The labor force is well educated, and market conditions are generally stable.