ACCESS TO TALENT FORMENA'S ENTREPRENEURS

A2TIn collaboration with

July, 2016In partnership with

2

Authors: Teeb Assaf, Habib Haddad, Jamil Wyne, and Katerina d.

Contributors: Elias Boustani, Evan Bulman, Kevin Guh, Estee Ward, Rachel Burns, Chris Godshall, and Allison Kammert.

Acknowledgements: A large thanks is due to Maya Rahal, Reine Farhat, Lucy Knight

, Aline Mayard, and Jeremy Paduano for their support in editing this publication and for their support in translating the surveys.

The WRL team would like to thank the following people for their time and support in developing and implementing the study. Their contribution was critical to ensuring that the survey was designed and carried out effectively and we are grateful for their involvement. Specifically, we would like to thank Roba Al Assi (Bayt.com) for her support and guidance, Sara Kadoui (NUMA) for her expertise in surveying Moroccan entrepreneurs and Pankaj Paul (Knowledge@ Wharton) for his assistance and generosity in accessing the Knowledge@Wharton network for the survey. Additionally, our team would like to thank the many entrepreneurs, investors, incubators, academics, lawyers and other experts who donated time to this study, your contributions were invaluable and we thank you all in the acknowledgments section of this report.

d

d d

Bayt.com is the number one job site in the Middle East, offering a complete range of end-to-end employment solutions and career planning tools. Founded in 2000, Bayt.com is fully functional in English, Arabic and French, and offers the fastest, easiest, most effective and cost-efficient methods for employers to find quality candidates, and for job seekers to find top jobs, in the Middle East and North Africa.

Partners:The Wamda Research Lab (WRL) is Wamda’s research program that produces studies on entrepreneurship in the Middle East and North Africa (MENA) and seeks to foster thought leadership in this field. Its agenda is to inform investors, policymakers and other stakeholders on the challenges faced by entrepreneurs in the MENA region and the potential solutions for over-coming them.

Beirut Digital District (BDD) is a hub for the digital and creative industries in Lebanon. BDD providesa state of the art business environment, value-added services and infrastructure so that companiescan increase their productivity and grow.

International Finance Corporation(IFC) is a member of the World Bank Group and is the largest globaldevelopment institution focused exclusively on the private sector. Working with private enterprises in about 100 countries, the IFC uses its capital, expertise, and influence to help eliminate extreme poverty and boost shared prosperity.

TABLE OF CONTENTSEXECUTIVE SUMMARY 04

INTRODUCTION 07

HIRING METHODS AND TRENDS 09

Recruitment channels 14

Geography of hiring 18

Satisfaction with talent 23

Incentives and compensation 26

Cultural mindset 36

CHALLENGES TO HIRING ANDRETAINING TALENT 39

Challenges to identifying candidates 41

Demand for soft and hard skills 45

Challenges to recruiting and retaining employees 50

Explaining the gaps 59

CONCLUSION AND RECOMMENDATIONS 61

APPENDIX 65

4

EXECUTIVE SUMMARY In 2015, unemployment in the Middle East and North Africa (MENA) stood at 12%, the highest regional unemployment rate in the world.1 Estimates suggest that the region must create 85 million jobs by 2023 to be on par with global average unemployment rates.2

Governments and private sector institutions are pointing to entrepreneurship as a way to create jobs, spur innovation and diversify economies regionally. Investing in entrepreneurship could have a substantial impact on job creation if ecosystem provided conditions for startups to scale and therefore recruit more talent.

mproving access to and retentionof talent must

in these efforts. To havea long-term impact on MENA’s entrepreneurship ecosystem, stakeholders must ensure that entrepreneurs can find the necessary skills and mindsets needed to grow their companies.

In this report, based on a survey of 963 entrepreneurs and 1,697 workforce participants, the Wamda Research Lab (WRL) aims to shed light on the trends and challenges of talent acquisition within MENA’s startup ecosystem as well as offer recommendations addressed to ecosystem stakeholders on how to overcome these challenges.

1. Middle East and North Africa Overview, the World Bank, 2015

2. Addressing the 100 Million Youth Challenge Perspectives on Youth Employment in the Arab World in 2012, World Economic Forum, 2012

5

Startups are hiring, yet few workforce respondents consider a career at a startup: 90% of surveyed entrepreneurs plan to hire in the next year; 64% of workforce respondents think that working for a startup is a good career move, though only 12% of the workforce would like to work for a startup

The workforce prefers corporate or government jobs: 64% and 41% of the workforce finds working for a corporation and the government, respectively, more appealing than working for a startup

Hiring channels are not diversified: 35% of surveyed entrepreneurs rely on their professional network to recruit employees while only 7% indicated that they used universities to find recruits

Entrepreneurs tend to hire locally but recognize that talented employees are available in other countries: with the exception of the UAE, 94% of entrepreneurs hire locally though they are aware there is talent in other countries; the most qualified regional workforce is thought to be located in Jordan, Lebanon and Egypt

60% of entrepreneurs are satisfied with the quality of the local hires:the highest level of satisfaction is found in Levant and North Africa, while entrepreneurs in the Gulf countries are the least satisfied and tend to hire candidates from abroad

There is a gap between salary expectations and salaries offered: 52% of entrepreneurs across MENA offer salaries ranging from USD 250 to USD 1000 per month, while only 1 % of the workforce is willing to workfor less than D per month

Entrepreneurs are willing to exchange salary for equity: 56% of thesurveyed workforce is willing to work for a lower salary if their employer provides the opportunity to learn new skills, and 53% if theiremployer provides equity

Hiring methods and trends:

Challenges to hiring and retaining talent:

Top challenges to hiring are skills and commitment-related: 44% of entrepreneurs say that identifying the right skills or expertise is the top challenge they face in the hiring process followed by 35% who expressed difficulties finding committed employees

Top soft skills: surveyed entrepreneurs have difficulty finding employees that are motivated (42%), independent (39%), and with a high aptitude (37%)

6

Top hard skills: entrepreneurs have difficulty finding sales (28%), business development (27%), and management (24%) skills

Corporate competition: 50% of entrepreneurs said they face competition for talent from corporations. Moreover, 64% of the workforce said they prefer to work at large corporations

The workforce cites several risks to working for a startup: 31% of the workforce associate a career at a startup with lack of job stability, 27% think a job at a startup lacks professional development prospects, and 22% believe startups offer low salary

Competitive market salaries are a hurdle to attracting talent: 43% of entrepreneurs state that the main reason why employees left their company was because they wanted higher salaries; 26% of the workforce named salary as the main reason for leaving a job at a startup

Conclusion and recommendations:

The report reveals that although entrepreneurs are creating jobs in the region, their access to talent remains limited. The surveyed workforce in our sample deems working for established corporations as more attractive than working for a startup.

Access to specific skills, a better aligned academic and private sector, and a culture more interested in working for a startup are needed for MENA’s entrepreneurs.

Recommendations: The issue of talent acquisition and development is of critical importance in MENA’s entrepreneurship ecosystem. Cultural trends, hiring methods, educational challenges and the allure of stable work at large, established corporations all complicate the team building process for MENA’s entrepreneurs. We recommend that multiple players in the ecosystem need to play a role in improving access to talent conditions, including entrepreneurs themselves. Universities, media, government and incubators and accelerators all have a role to play in this process.

Specific efforts include promoting the concept of work ng at a startup tot e general o ulat on, creating a legal framework that is supportive ofemployee stock options, helping entrepreneurs access new recruitment channels and enabling more engagement between universities and entrepreneurs. These measures are not a prescription for success, but can help ecosystem stakeholders and entrepreneurs identify good practices for tackling the talent access equation in the region.

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INTRODUCTIONUnemployment in MENA is a longstanding obstacle for the region’s economic and social development. In 2015, unemployment in the Middle East and North Africa (MENA) stood ata 12%, the highest regional unemployment rate in the world.3 According to the World Bank, the region’s youth unemployment rates are also the highest in the world, with over 25% of the youth currently unemployed. In Saudi Arabia and Jordan, youth unemployment rates reached 30% in 2012, and this figure was over 40% in Palestine and Tunisia. Estimates suggest that the region must create 85 million jobs by 2023 to be on par with global average unemployment rates.4

Entrepreneurs can play a critical role in creating jobs in MENA. In seeking solutions to this challenge, governments and private sector institutions are pointing to entrepreneurship as a way to create jobs, spur innovation and diversify resource dependency. Recently, the region has witnessed an upswing in the establishment of institutions supporting entrepreneurship. In the past years alone, Jordan established more entrepreneurship supporting institutionsthan it has in the past decade. In the period between 2000-2010, the number of entities created to support entrepreneurs in Jordan was 10, and between 2010-2014, this figure was 14. Similarly, in the UAE, the number of institutions created post 2010 is more than double those established between 2000 and 2010.5

Scaling enterprises in particular can have a significant impact on this process. Scalable companies can have a substantial impact on job creation. Globally, a small percentage of scale-up companies contribute the majority of new jobs created. For instance, Endeavor Insight has found that while 8% of the businesses in Columbia were scale-ups, they account for nearly 45% of the country’s new jobs.6 In Southeast Asia, scale-ups represent 14% of total companies but create 77% net new jobs.7 Similar trends can be found in MENA. In Jordan, 9% of the country’s total firms accounted for over 50% of net new jobs in past three years.8

Talent and access to it is critical within the scaling process. The transition from a groupof founders and early-stage employees to scaling a team across borders with a widening range of skill sets requires both qualified and invested employees. Finding talent is critical to the enterprise scaling process. In a Wamda Research Lab (WRL) survey, in partnership with Endeavor Insight, of over 700 entrepreneurs in the region, building a team was one of the top challenges faced by entrepreneurs when scaling into new markets. More specifically, over 60% of entrepreneurs cited finding talent as a barrier to building their team and pointedto challenges with retaining talent and paying salaries.9 Without a strong team, entrepreneurs’ chances of successfully scaling are diminished.

3. Middle East and North Africa Overview, the World Bank, 20154. Addressing the 100 Million Youth Challenge Perspectives on Youth Employment in the Arab World in 2012, World Economic Forum, 20125. Four-country report, Wamda Research Lab, 20156. The 8-45 Report, Endeavor Insight, 20137. The Impact of Entrepreneurs at Scaleup Companies in Southeast Asia, 20148. The Critical 9 Percent, Endeavor Insight, 20159. The Next Step: Breaking barriers to scale for MENA’s entrepreneurs, Wamda Research Lab, 2014

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About this report: If MENA’s entrepreneurship ecosystem wants to improve conditions for finding talent and scaling companies in the region as a method to solve unemployment, there must be increased focus on and understanding of skills and processes that affect talent acquisition and retention. To date, quantitative research regarding the challenges MENA entrepreneurs face when building and retaining their team is limited while insights on MENA’s workforce opinions regarding working for entrepreneurial enterprises is minimal as well.

Through this report, WRL aims to shed light on the processes, strategies and barriers to talent recruitment and retention facing MENA’s entrepreneurs. The study examines the workforces’ interest and willingness to work for a startup, and the incentives they seek in professional opportunities. This report consolidates data and insights collected from MENA’s entrepreneurs and the workforce to gain a better understanding of the main trend and challenges shaping the team building process for MENA’s entrepreneurs. It is based on a survey of over 900 entrepreneurs, most of which plan to hire in the near future, and over 1600 members of the region’s workforce. It is also supported by over 100 individual interviews with entrepreneurs, investors, incubators and other entrepreneurship experts in MENA.

HIRING METHODS AND TRENDS

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KEY TAKEAWAYS

Startups are hiring: 90% of entrepreneurs are planning to hire in the next two years

Startup jobs are not deemed attractive by the workforce: only 12% of said that they themselves would liketo work for a startup

Corporate and government positions are preferred over startups: 64% d

41 d

Entrepreneurs are hiring locally, but they also acknowledge that talented employees could lie elsewhere in MENA:

d from the UAE, 94% of entrepreneurs hire locally

ajority of entrepreneurs are satisfied with their local talent pool: 60% of entrepreneurs are satisfied with the quality of the local employees, the highest dissatisfaction levels are observed in the Gulf countries

11

Hiring channels are not diversified: more than one third (35%) of entrepreneurs rely on their professional networks to hire, 15% use online recruiting sites, 14% use online networking resources or friends, and 7% use universities

There is a gap between salary expectations of the workforce and salaries offered by startups: 52% of entrepreneurs across MENA offer ranges between USD 250 to USD 1000, while only 15% of the workforce is willing to work for less than D per month

Entrepreneurs are willing to trade-off salary for equity: 41% of employees value non-wage benefits; 53% is willing to work for a lower salary if their employer offers equity and 56% if their employer provides the opportunity to learn new skills

There is a mismatch between non-wage benefits offered by startups versus benefits valued by the workforce:60% of entrepreneurs offer opportunities to innovate within the company yet only 15% of the workforce cited that opportunities to innovate are important in the job they seek

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of workforce respondents said that they themselves would like to work for a startup

MENA’S ENTREPRENEURS ARE LOOKING TO GROW THEIR TEAMS, BUT STARTUP CULTURE HAS NOT YET DIFFUSED INTO MENA’S POPULATION MINDSET

Of the 963 surveyed entrepreneurs, nearly 90% plan to hire employees in the near future, which indicates that the majority of startups in the region are creating job opportunities. Additionally, 64% of the workforce respondents perceive working for a startup is a good career move. However, when asked whether they themselves would like to work for a startup, only 12% said they would like to work for one.

90% 64% 12%

of surveyed entrepreneurs plan to hire in the next year

of workforce respondents think that working for a startup is a good career move

Figure 2Do you consider working for a startup as a good career choice?

BASE: N=1658

64%

14%

22%

Yes No Undecided

Entrepreneurs: BASE: N=963

Figure 1

Workforce: BASE: N=1658

13

While the region’s ecosystem has developed over the past several years and public interest in entrepreneurship has grown in parallel, working for a startup is not yet considered a viable career choice. There is a mismatch between the workforces’ perception of working for a startup and their willingness to actually do so.

Figure 3Workforce career preference

32%

Large corporation

25%

No preference

12%

Startup or SME

9%

Government

7%

7%

4%

4%

Other

Intergovernmental organization

Non-profit/NGO

Don't know

BASE: N=1697

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As companies scale in MENA and seek to move into new markets they will need to explore multiple channels for hiring and building their teams. Within our sample, more than one-third of entrepreneurs rely on their professional networks to find new hires as shown in Figure 4 below. The second most used hiring channel is online recruiting sites (15%), friends (14%), and social networking sites (14%).

Though the findings suggest that more entrepreneurs in Kuwait and Lebanon (15% and 13%, respectively) in our sample use universities sparingly to find new hires, very few in other countries pointed to universities as useful channels for hiring talent. While using professional network is one tool to find and hire talent, universities should not be underestimated as theyhave access to a large talent pool of educated candidates.

RECRUITMENT CHANNELS

"The lack of intern culture stems from the fact that kids in many MENA countries remain dependent on their parents for a very long time, so there’s very little incentive to start working until after graduation. To change this mentality, it’s important to work with universities to express to students the profession/life advantages that interning before graduation can offer."- Ahmed Aduib, cofounder, Abaya Addict

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35% OF ENTREPRENEURS IN THE SAMPLE RELY ON PROFESSIONAL NETWORKS TO HIRE, 15% USE ONLINE RECRUITING, AND 7% RELY ON UNIVERSITIES

Figure 4Preferred hiring channels

Professionalnetworks

Social networking

sites

Online recruiting

sites

UniversitiesFriends Career fairs

"There is very little guidance for university students during the process of transitioning from school to work, and many students wind up in positions that perhaps don’t fit their interests, skill sets, or personalities. It would be helpful if there was more professional guidance offered at universities that supported startups, and that encouraged adventurous, unconventional students to look into working for people like us."- Tarek Bakkar, managing partner, IMS Medical

BASE: N=853

35% 15% 14% 14% 7% 4% 11%

t er

16

Interviews with entrepreneurs point to difficulties in developing relationships with regional universities. Entrepreneurs discussed how few universities re open to collaborating withstartups or how most lacked commitment to forming long-term partnerships. These issues potentially explain why relatively fewer entrepreneurs have turned to universities to build their teams.

Regarding specialized recruitment websites and social networks, entrepreneurs said that these resources re typically most useful when trying to fill entry-level positions, whileprofessional network websites re better for filling positions that required more workexperience.

"Diversifying the sources of a company's talent pool is essential. For years now, we have been working with start-ups in the Middle East to assist them with their sourcing strategies, designing various tools to help them tap into their own networks and specialist networks as well, like Bayt.com Specialties."- u a l asr , P em loyer solutons, ayt com

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CASE Study:

BBerryPin.comWorking with universities to source talent

Bashir Osman founded BBerryPin, in 2011 and sold it to Blackberry for USD 300 in 2013. Osman credits the successful acquisition in part tobuilding and scaling a strong team. He started BBerryPin with two friends, one programmer and the other a business developer. After securing seed investment the team decided to hire six more people, leveraging social media and freelancer websites to find employees.

The founders offered higher than average salaries, which, coupled with paid vacations, telephone allowance, flexible schedules and a trendy “Google-like” office all helped to attract a flow of applicants. After going through a daunting task of filtering irrelevant resumes and making a few hires Bashir realised that they were not committed to the company and their work ethic was sub-par. The new hires’ hard skills were also weak.

Osman and his team had to revise their screening process of employees. The founders then devised the idea to hold a series of skills based competitions at nearby universities. They advertised for a graphic design and coding project, and the applicant who delivered the best project would be hired. Forty-five applicants submitted projects, and Osman hired two of them. The competitions allowed people to demonstrate their technical skills as well as their creative thinking. By watching this process, Osman also measured qualities like self-confidence, passion and perseverance.

Key insights: Working with universities can help entrepreneurs identify potential hires. While students may not think that startups provide attractive work opportunities, competitions and more thoughtful engagement with universities can help entrepreneurs find talent.

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GEOGRAPHICHIRING TRENDS

surveyed entrepreneurs hire from the country their main office is located in (Figure 5).Although most entrepreneurs hire locally, there is a perception that talent is also available outside their home country. Hiring from abroad can include limited access to recruitment channels beyond home country, burdensome paperwork, relocation and associated logistical costs.

Additionally, political instability and restrictive labor regulations in several MENA countries can affect the ability of startups in these countries to hire from other geographical locations. As a result, the findings presented may imply that talent is not moving across borders.

The UAE, globally ranked d for its capacity to attract talent, where more than 50%entrepreneurs reported they resort to sourcing talent from abroad, represents an exception to the rule. d

"Hiring and retaining talent in Jordan is very challenging. Talent is available, but startups are facing a lot of competition and they are getting priced out."- Khalil Shadid, founder, Reserveout

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Figure 6Where do entrepreneurs in the UAE and KSA think the most talented employees are located?

Jordan

20%

Egypt

28%Egypt

21%

Jordan

18%

Other

50%

Lebanon

14%

Morocco

95%Tunisia

97%

UAE

51%

Palestine

98%

Egypt

99%Jordan

98%

Saudi

Arabia

82%

Lebanon

98%

Saudi Arabia UAE

Saudi

Arabia

82%UAE

51%

Palestine

13%

Other

18%

THE MAJORITY OF SURVEYED ENTREPRENEURS HIRE DOMESTICALLY, THOUGH THEY ACKNOWLEDGE THAT TALENT EXISTS IN NEIGHBORING COUNTRIES AS WELL

Figure 5Percentage of entrepreneurs hiring locally

BASE: N=96BASE: N=61

BASE: N=963

ult le es onse uest on

ult le es onse uest on

20

THE MOST QUALIFIED REGIONAL WORKFORCE THOUGHT TO BELOCATED IN JORDAN, LEBANON AND EGYPT

Figure 7Where entrepreneurs in MENA think the most talented employees are located

Lebanon

15%

UAE

11%

Palestine

8%

Jordan

17%

Egypt

15%

BASE: N=963

Though the capacity to attract talent does not always correlate with perception ofwhere the most talented workforce is located, surveyed MENA entrepreneurs point to Jordan, Lebanon and Egypt as countries with the highest concentration of qualified local

.

ra de cts most common answers c osen

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ENTREPRENEURS IN SOFTWARE DEVELOPMENT, ONLINE SERVICES AND ECOMMERCE CITED JORDAN AS HAVING THE MOST TALENTED EMPLOYEES;ENTREPRENEURS IN ARTS & CREATIVE, MARKETING PR BELIEVE THE MOST TALENTED EMPLOYEES ARE IN LEBANON

Figure 8Where entrepreneurs from selected industries think the most talented employees are located

BASE: N=419

Arts & creative industries

ommerce

Marketing d PR

Online serives

Software development & services

Egypt 23%

Jordan 21%

Lebanon 34%

Palestine 9%

UAE 19% Egypt 21%

Jordan 21%

Lebanon 36%

Palestine 9%

UAE 25%

Egypt 21%

Jordan 35%

Lebanon 20%

Palestine 9%

UAE 26%

Egypt 23%

Jordan 32%

Lebanon 28%

Palestine 4%

UAE 17%

Egypt 24%

Jordan 37%

Lebanon 18%

Palestine 20%

UAE 10% ult le es onse uest on

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Case Study:

Samih Darwazah Center For Innovation Management & Entrepreneurship at the American University of Beirut

Leveraging relationships between entrepreneurs and academia

The Center was established in 2011 to promote entrepreneurship and industry-academic collaboration through joint-instruction and startup acceleration, teaching and mentoring growth stage firms in MENA, focusing on the following programs:• Darwazah Student Innovation Contest: The event was launched in2013 for all AUB students and attracts around 100 applications annually.Participants attend three days of training in business developmentand present a business plan to a committee of ecosystem experts andentrepreneurs. One prize of USD 15,000 and one of USD 5,000 areawarded to the first and second-place winners, respectively.• Entrepreneurship and innovation practicum: The course is available toall AUB students and is considered one of the most sought after courses inthe university. Modeled after Steve Blank’s Lean Launch Pad, the courserequires that during 16 weeks students develop business idea, test prototype and pitch it to a committee of judges.• Case Studies a Research: This initiative focuses on finding regionalrole models and developing a set of business cases based on localsuccess stories.• Mentoring and acceleration of early stage entrepreneurs: Theprogram in collaboration with Speed, Bader and Endeavor Lebanonto provide direct support to entrepreneurs in Lebanon.

Key insights: Universities can play a significant role in supporting entrepreneurship in MENA. In addition to providing academic knowledge, they can encourage students to experiment with entrepreneurship and also build partnerships with ecosystem players.

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SATISFACTIONWITH TALENTThe majority (60%) of entrepreneurs in our sample stated that they were satisfied with the quality of talent in their countries (Figure 9).

MOST ENTREPRENEURS ARE SATISFIED WITH THE LEVEL OF EMPLOYEE TALENT, AND A QUARTER OF THEM EXPRESSED DISSATISFACTION WITH THE QUALITY OF HIRES

Figure 9Entrepreneurs’ satisfaction levels with employees

Satisfied

Unsatisfied

Undecided

60%

16%

24%

BASE: N=963

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Analysis of relation between perceived talent location and entrepreneurs’ level of satisfaction with local talent (Figure 10) reveals two prevailing trends:

More than 90% of the companies located in Levant and North Africa hire locally, out of which more than 60% are satisfied with quality of the local talent. Entrepreneurs in Lebanon,Egypt, Tunisia and Palestine are the most satisfied with local talent.

Gulf countries, predominantly the UAE, Saudi Arabia, and Bahrain believe that the most talented employees are located outside their countries. ntre reneurs rom t ese countr es e ressed t e most d ssat s act on w t t e ual ty o local talent Consequently, our research finds that they heavily rely on recruiting from abroad.

BASE: N=909

ENTREPRENEURS IN LEVANT AND NORTH AFRICA ARE THE MOST SATISFIEDWITH LOCAL TALENT WHILE THE LEAST SATISFIED ENTREPRENEURS ARE IN THE GULF COUNTRIES

Figure 10Entrepreneurs’ satisfaction with local talent by selected countries

Morocco Tunisia

Egypt

Lebanon

KSA

UAE

Palestine

Jordan Bahrain

%

1 %

19% 73%

5 %

6 %

%

4 %

23%

%

27%

2 %1 %

13%7%

13%

20%

%

39%%

7 %

7%

%

2 %

13%

31%

23%Satisfied

Unsatisfied

Undecided

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Satisfaction levels of local talent may be associated with the proportion of population that pursued tertiary degrees. Average tertiary school enrollment in MENA stands at 26.3%, compared to 90.3% for OECD high-income countries. The World Economic Forum (WEF) conducted a survey demonstrating that tertiary school enrollment was highest in Lebanon, Jordan, Saudi Arabia, followed by Tunisia, Algeria, Bahrain and Egypt and the lowest in the UAE, Qatar and Morocco.10

Case Study:

Buzzeff, Morocco

Focusing on employee engagement and aligning employee and company goals

Buzzeff, a social video advertising platform with offices in Morocco and Dubai, currently employs 20 people and handles a portfolio of over 70 advertising campaigns in 15 MENA countries. From the start, Jerome Mouthon, the founder, and his executive team formed a company with an extensive employee-training program. Ali Naguib, Buzzeff’s managing director, credits the executive team’s tactics of mixing an entrepreneurial mindset with corporate strategies as the result of their experience working at multinational companies. Buzzeff established the program by prioritizing the following HR and team-building strategies:• Increasing face time with employees: Mouthon and Naguib conductedinterviews with every employee regarding their expectations and goalsabout their positions at Buzzeff, their strengths and weaknesses, and theskills they needed to excel at their jobs.• Aligning company and employee goals: Buzzeff’s executives identified acore set of skills they believed could be developed in their employees tomore expediently attain these objectives.• Soliciting external support: The executive team hired an external HRconsultant to create a 15-session training program on topics such as timemanagement, holding productive meetings and effectively conductingconference calls. Additionally, an English tutor comes to the office regularlyto help develop employees’ language skills.The resulting company culturenot only produces happy employees, but also encourages workers tocontinuously hone their skills to better serve both Buzzeff’s and their careergoals.

Key insights: The Buzzeff executive team leveraged their corporate experience in developing employees’ skillsets, but approached the process of doing so with an entrepreneurial mindset. They were open to innovative methods of training employees and leveraged input from employees, company’s executive strategy and an external HR expert to produce their training program.

10. The Global Competitiveness Report, World Economic Forum, 2015–2016

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Incentive packages are an important tool to attract and retain key employees as well as keep a continuous flow of hires at all stages of a company’s development. Though the actual dollar amounts differ significantly depending on industry and region, the main components of the incentives package should be fairly standard and aim to include: base salary and a variety of financial and non-financial incentives, such as stock options, health benefits, paid vacations, stimulating office environment, flexible working hours etc.

INCENTIVES AND COMPENSATION

"Management is more important than the money and a flat organization is essential. A flat organizational structure gets everyone engaged and promotes a sense of ownership. Having people listen to each other makes them feel like they count. Invest in people, listen to them, make sure they feel like they drive the change ”- Sherif Kamel, VP information management, AmericanUniversity in Cairo

MOST ENTREPRENEURS IN OUR SAMPLE OFFER SALARIES THAT ARE BELOW SURVEYED WORKFORCE’S EXPECTATIONS

Figure 11Monthly salary offered by entrepreneurs vs. monthly salary expected by the workforce

52% 15%

22%

17%

11%

10%

25%

29%

10%

4%

2%

3%

Offered PreferredBASE: N=979 BASE: N=1608

Below USD 1,000

USD 1,000- below 2,000

USD 2,000- below 3,000

USD 3,000- below 4,000

USD 4,000- below 5,000

USD 5,000 or above

Based on our survey data, 52% of entrepreneurs pay salaries ranging between USD 250 to USD 1,000, while only 15% of the surveyed workforce expects to work for less than a USD 1,000 per month. Almost half of the workforce expects to earn USD 3,000 and more, while only 9% of entrepreneurs are meeting such standards. The discrepancy between the salaries offered versus expected is further reinforced by the fact that 29% of the workforce stated that they left startup jobs because the salary was not sufficient.

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HIGHER THAN AVERAGE SALARIES ARE OBSERVED IN GULF COUNTRIES AND LEBANON, WHILE NORTH AFRICA, PALESTINE AND JORDAN ARE ON THE LOWER END

Figure 12Average monthly salary offered by startups per selected countries, in US dollars

BASE: N=963

Palestine

MoroccoJordan

UAE

Lebanon

US dollars

1000 1500 2000 2500 3500 4500 4500+

27%

26%

12%

2%

11%

2%

US dollars

1000 1500 2000 2500 3500 4500 4500+

14%

11%

17%

14%

16%

15%

US dollars

250 500 750 1000

17%

21%

4%

21%

US dollars

250 500 750 1000

5%

16%

21%

22%

US dollars

250 500 750 1000

13%

22%

2%

23%

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ENTREPRENEURS IN THE SELECTED COUNTRIES ARE INDUSTRY STANDARDS

Figure 13Startups’ pay compared to the average and IT industry minimum pay11

19%

<MIN

AVG

AVG+

"Building a team is almost as important as the actual idea. An idea is only as good as the people who are going to execute it. You need passionate people committed to the vision. Staffing a startup is very hard and you won’t be able to pay them large salaries, they will work long hours, so how do you find them?” - Mona Ataya, founder and CEO, Mumzworld

40%

Lebanon

Egypt

Jordan

UAE

BASE: N=680

53% 28%

44% 16%

56% 34% 10%

14% 4% 82%

11. International Labout Organisation database; www.salaryexplorer.com database

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alaries offered by more than 80% of startups in Lebanon are abovethe IT industry minimum level, though only 28% of entrepreneurs offer above average salaries. The finding suggests that startups in Lebanon should not be facing problems filling entry level positions however they could find it difficult to attract experienced hires. Roughly 80% of entrepreneurs in Egypt and the UAE offer average or below average salaries with a high share of salaries below the minimum level. For Jordan specifically, 82% of the salaries offered are at or below the industry minimum.

The above findings show that offering competitive salaries is a common challenge for startups in MENA. Startups are known to operate limited financial resources, which could translate into smaller financial packages for potential employees. While financial packages are important in attracting employees, entrepreneurs should also focus on non-financial packages to retain talent and keep employees with their company for the long haul. However, our research finds that a number of incentives are being underutilized.

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THERE IS A MISMATCH BETWEEN NON-FINANCIAL BENEFITS OFFERED VERSUS BENEFITS VALUED

Figure 14Non-financial benefits offered to employees versus benefits valued by the workforce

Family allowance

7%

9%

Equity or share options

26%

17%

Opportunities for promotion

45%

26%

Non-wage benefits

50%

41%

Training opportunities

52%

19%

Bonuses

59%

23%

Opportunities to Innovate

60%

15%

Flexible working hours

62%

21%

Offered by entrepreneurs

Valued by the workforce

BASE: N=822

BASE: N=1449

Maternity program or childcare

14%

1%

Free transportation or transportation

25%

6%

ult le es onse uest on

31

Figure 14 shows that 60% of entrepreneurs said they offer opportunities to innovate within the company yet only 15% of the workforce cited that opportunities to innovate are important in the job they seek; Moreover 62% of entrepreneurs offer flexible working hours, though again fewer, 21% of the workforce, values this benefit.

Although MENA's ecosystem has grown rapidly in the past years, the data suggests that the startup company culture and the incentives it can offer employees have not yet taken root in the region’s work culture as a whole. Our research finds that 45% of entrepreneurs offer opportunities for promotion, yet 26% of the workforce value progressive career development.

"Non-financial incentives are more important than financial incentives. Startup environment is flexible (working hours, management) and the startup environment attracts people.” - Rima Shaban, manager of innovation and entrepreneurship center, Abu Dhabi University

32

"We highly value employees who value the company and its vision equally or over their personal wealth and success.”- Rafah Al Khatib, CEO, 3eesho

MORE THAN HALF OF THE WORKFORCE IS WILLING TO WORK FOR A LOWER SALARY IF EQUITY IS OFFERED

Figure 15I am willing to work for less money if I receive equity

MAJORITY (56%) OF THE WORKFORCE IS WILLING TO WORK FOR LESS MONEY IF THEY RECEIVE TRAINING OPPORTUNITIES

Figure 16I am willing to work for less money if I receive training opportunities

53% 26%21% BASE: N=1569

BASE: N=1549

Agree Disagree Undecided

56% 16%28%

Agree Disagree Undecided

Opportunities to develop new skills and progress in their careers can serve as effective incentives for employees. Additionally, while startups may not be able to offer lucrative salaries to employees there are a number of incentives they can use to attract talent, like offering their employees equity and stock options in the company. Aside from potential financial gains, such incentives can also help employees derive a sense of ownership in the company, which can help build their long-term commitment to it. d

lower salary offer if stock options are provided (Figure 17).

33

ALTHOUGH HALF OF THE WORKFORCE IS WILLING TO ACCEPT A LOWER SALARY IF STOCK OPTIONS ARE PROVIDED, JUST ONE QUARTER OF ENTREPRENEURS ARE OFFERING EQUITY TO THEIR EMPLOYEES

Figure 17Startups offering equity

"Entrepreneurs should be encouraged to give leadership positions, develop their internal entrepreneurial culture and provide opportunities for their employees.” - Kamal Hassan, President and CEO, i360

74%

26%

BASE: N=

Offer equity

Do no offerequity

34

WITH THE EXCEPTION OF THE UAE, THE MAJORITY OF ENTREPRENEURS IN MENA DO NOT OFFER STOCK OPTIONS

Figure 18Percentage of entrepreneurs who offer equity to their employees (per selected countries)

BASE: N=963

The practice of issuing stock options is still a developing practice in MENA. According to Figure 18, this incentive is most common in the UAE (36%), followed by Jordan (25%), Morocco (25%), Palestine (23%), d Lebanon (20%). During interviews, a fewentrepreneurs stated that main reasons holding them back from offering stock optionswere difficulties finding experienced lawyers to structure stock option plans according to the local legislation, as well as the fact that prospective hires would not understand the meaning of the stock options and therefore would not see value in such offering.

36% 25% 25% 23% 20% 20% 18% 16% 12% 11% 10%

UA

E

Jord

an

Mor

occo

Pal

estin

e

Egy

pt

Leb

anon

Bah

rain

KS

A

Alg

eria

Tuni

sia

Kuw

ait

35

Case Study:

Stock options ractices in Lebanon

Stock options can be an important incentive for helping recruit and reward employees, especially when a company is young and cannot offer attractive salaries. As MENA’s startup ecosystem evolves and startup teams grow, the practice of offering stock options is gradually becoming more common, yet based on interviews with entrepreneurs, still remains an under-utilized resource. Lebanon’s case provides an overview of the challenges that its development has faced to date.

Lack of legislation: Apart from the law n.308 dated 3/4/2001 relating to “Bank Share Issuing and Trading, Bank Bond Issuing and Bank Ownership of Real Estate” that contains an article 3, governing the granting of stock options to the Chairman, the members of the Board, the management and employees of Lebanese banks, there is no tailored general legal framework that supports stock options in Lebanon. However, several mechanisms of the Lebanese civil and commercial law can be used to create a contractual framework for stock options, equivalent to the practice borrowed from the US. For example, vesting can be done through the mechanisms of the general civil and commercial law.

Minimal legal expertise: According to interviews with lawyers and entrepreneurs, Lebanon, as well as MENA itself, has minimal legal specialization with stock options. The lack of expertise in this area complicates the process for structuring these deals. Though as demand grows, more lawyers offer their services at structuring stock options contracts. It is very important that the lawyers keep in mind the particularities and specificities of Lebanese laws, and avoid importing blindly the provisions of foreign stock options agreements, as such provisions are not always adapted to, and enforceable under, the Lebanese laws.

Nascent concept: In our survey, roughly half of the workforce said they would accept a lower salary if stock options were offered, which suggests a certain degree of awareness around this incentive’s value. Where employees are not educated on the matter of stock options it is a responsibility of an entrepreneur to provide some guidance and/or training.

Key insight: A combination of an underdeveloped legal structure, minimal legal expertise and a still-growing public awareness all hold back the widespread usage of stock options amongst startups in Lebanon. The Lebanese case is similar to the situation in MENA as a whole, with a lack of expertise, customized legislation and general public knowledge stifling more abundance of stock options.

36

The culture of entrepreneurship is fundamental to shaping MENA’s ecosystem and general buy-in for entrepreneurship in the region. This research reveals that the workforce in MENA does not yet find working for a startup to be an appealing career opportunity. Family and society pressure, risk-aversion and lack role models are some of the factors that diminish the valueof working for a startup in MENA.

Cultural mindset

"The culture in MENA is such that a manager won’t always be willing to share his expertise with his subordinates out of fear that they would surpass him. This holds the economy back because people don't collaborate as much as they should.”- Alia Adi, founder and CEO, Basmaty

37

MOST OF THE SURVEYED WORKFORCE PREFERS CORPORATE OR GOVERNMENT JOBS TO A CAREER AT A STARTUP

Figure 19Working for a corporation is more appealing than working for a startup

Figure 20Working for the government is more appealing than working for a startup

64%

41%

23%

25%

13%

34%

BASE: N=1520

BASE: N=1519

Agree

Disagree

Undecided

Agree

Disagree

Undecided

According to Figures 19 and 20, 64% and 41% of the workforce finds working for a corporation and the government respectively more appealing than working for a startup. The preference for corporate jobs is the strongest in Saudi Arabia, Qatar, Egypt and Kuwait while the preference for the government jobs is the strongest in the UAE, Kuwait, Saudi Arabia, Lebanon.

38

"MENA corporations are likely to regard a candidate’s experience at a startup as unimpressive. Job seekers in the region know this, and are therefore hesitant to accept a position at a startup ”- Amir Barsoum, CEO, Vezeela by Dr Bridge

Most entrepreneurs interviewed mentioned that there are heavy familial and societal pressures on young university graduates to find employment at large corporations. Similarly, employment as doctors, lawyers, bankers and government workers are also looked upon favorably.

Relatively few success stories role models in the region could also help explain why working for a startup remains an unpopular career choice. The region’s startup community is still young, limited success stories and best practices have yet to diffuse throughout MENA.

Case Study:

Glowork, Saudi Arabia

Khalid Alkhudair’s vision of an online recruitment platform in Saudi Arabia designed entirely for women was radical to many people. As Glowork matured and Alkhudair sought to take on more team members, funding became an issue. He benefited from a Saudi government program that offers to pay half the salaries of Saudi nationals. Ever a proponent of practicing what you preach, Alkhudair hired mostly women. In fact, today, 81% of his almost 70 employees are Saudi women. Alkhudair points to several reasons for how he has been able to grow Glowork’s team:• Previous management experience: Alkhudair credits his success inbuilding his team to his previous experience in the corporate sector. Helearned from his time at KPMG how to effectively manage employees andto ensure their satisfaction within their work environment.• Equity: He immediately made sure his employees felt like co-founders,offering an equity proposition that, in time, would provide returns on theircommitment.• Autonomy: According to Alkhudair, every employee at Glowork is theface of the company. They are given the opportunity to speak for Gloworkat conferences and programs, which has helped to build both a sense ofagency and loyalty amongst employees.

Key Insights: Using his management experience at KPMG, Alkhudair formulated a system that allows his employees to take an active role in the company’s future through leading lectures and workshops and benefiting from an equity share. Alkhudair attributes his success in being able to build an effective team to several factors: leveraging experience from his corporate management background; motivating employees by engaging them emotionally and financially and allowing considerable degree of autonomy and trust that helped to build both sense of agency and loyalty amongst employees.

CHALLENGES TO HIRING AND RETAINING TALENT

40

KEY CHALLENGES TO BULDING TEAMS

THE LIMITING FACTORS HINDERING TALENT ACQUISITION:

Main challenges for sourcing talent: Identifying candidates with the right skills or expertise (44%)

Inexperienced entrepreneurs

Soft skills: The top soft skills that surveyed entrepreneurs have difficulty finding are motivated employees (42%) and independence (39%)

MENA’s educational system lags behind private sector demands

Hard skills: The top two hard skills that entrepreneurs have difficulty finding are sales (28%) and business development (27%)

Underutilized recruitment channels

THE LIMITING FACTORS HINDERING TALENT RETENTION:

Salaries are competitive: 43% of surveyed entrepreneurs cited that the main reason why employees left their company is because they wanted higher salaries

Scarce resources available to offer competitive incentive packages to attract top end talent and retain key employees

Corporate competition: 50% of entrepreneurs cited corporations as their biggest competitor for talent. 64% of the workforce agreed thatworking for a corporation was more appealing than working for a startup.

Limited offer of training and career development prospects

Public sector competition: 9% of the entrepreneurs said the government was a competitor for attracting talent, 41% of the workforce said that working for the government is more appealingthan working for a startup

Unclear startup prospects for scale and employee development

41

CHALLENGES TO IDENTIFYING CANDIDATES

"There is a huge youth bulge so talent is available, they are accessible, smart and educated, however they tend to lack soft skills and therefore they will need training.” - Dr. Ayman Ismail, Director, AUC Venture Lab

Identifying candidates with the required soft and hard skills and willingness to commit to working for a startup is a notable challenge facing MENA’s entrepreneurs, as shown in Figure 21 below. While many entrepreneurs in our survey report being satisfied with the local talent they have been able to find, there are certain skills that are hard to find. During interviews, entrepreneurs expressed general dissatisfaction with the region’s education systems, citing that it lags behind private sector need . This lag is most prominent in the technology industry.

Chiefly, entrepreneurs indicate: identifying the right skills or expertise (44%) followed by people who will commit long-term (35%), identifying the right personality (28%), and finding people who are interested in working for a startup (26%) are the top challenges to hiring employees.

Surveyed entrepreneurs point to specific skill gap in their potential hires. According tointerviews, this challenge is a product of regional educational systems that lag with private sector needs and also a general cultural aversion in the region to working with younger companies. Additionally, as the entrepreneurship ecosystem in MENA is still young, many founders within it are still seeking to establish their companies’ brands as well as create a well-defined hiring strategy.

42

IDENTIFYING EMPLOYEES WITH THE RIGHT SKILLS OR EXPERTISE, AND FINDING PEOPLE WHO WILL COMMIT LONG TERM ARE THE TOP HIRING CHALLENGES

Figure 21Top challenges to sourcing employees

Identifying the right skills or expertise

Finding people who will commit long-term

Identifying the right personality

Finding people who are interested in working for a startup

Finding the right level of experience or seniority

Knowing where to look for potential hires

Negotiating a reasonable salary with new hires

Having good HR staff or HR processes

44%

35%

28%

26%

19%

16%

8%

5%

As the entrepreneurship ecosystem in MENA continues to mature, many founders within it are still seeking to establish their companies’ brands as well as create a well-defined hiring strategy. Startups should pay critical attention to diversifying their recruitment channels, vetting potential hires through establishing internship programs and/or a rigorous interview process.

"Educational institutions and policy developers should be able to forecast market 5 years from now. As it stands now, there is a mismatch between specialties demanded by the market and those universities produce.” - Ziad Sankari, founder, CardioDiagnostics

BASE: N=963

Multiple Response Question

43

27%

2%

23%

THESE CHALLENGES STAYED CONSISTENT AT THE COUNTRY LEVEL AS WELL, WITH ENTREPRENEURS IN JORDAN, MOROCCO, THE UAE, LEBANON, PALESTINE AND EGYPT ALL IDENTIFYING LONG-TERM COMMITMENT AND SKILLS AS THE TOP TWO CHALLENGES THEY FACED WHEN HIRING EMPLOYEES.

Figure 22Top challenges to hiring new employees (per selected countries)

Finding people who are interested in working for

a startup

Having good HR staff o processes

Finding the right level of experience or seniority

Negotiating a reasonable salary with new hires

Identifying the right personality

Finding people who will commit long term

Knowing where to

look for potential hiresIdentifying the right skill

or expertise

27%

28

%

5%

32%

19%

5%

7%

51%

28%

36%

6%

36%

14%

14%

7%

40%

31%

22%

3%

34%

27%

6%

5%

55%

22%

24

%

3%

44%

23%

13%

6%

46%

21%

31%

26%

25%

9%

43%

33%

28%

5%

43%

17%

8%

32%

UAE JordanMorocco Palestine EgyptLebanon

BASE: N=909

Multiple Response Question

44

Case Study:

PALMA CONSULTING, JORDAN

nternship program connects higher education with business world

Palma Consulting is a consulting organization that specializes in helping companies with IT development and ensuring that IT processes are integrated with the organization’s business strategy. When Palma Consulting started gaining traction in 2002, the firm found that it needed engineers who were able to apply tech development to business strategy and look at the utility of IT applications in relation to a larger organization. Founder Tamara Abdel-Jaber began by recruiting from Jordan’s universities, but quickly found that the curriculum was highly theoretical with little application, and thus did not prepare students for the kind of work her clients expected.

To solve the problem, Tamara applied insight from some of her clients in Germany. According to Abdel-Jaber, “The German government has facilitated an ecosystem where software companies donate their products or services to universities and in exchange benefit from the resources and talent pool surrounding these universities’ science parks and innovation incubators.” Though the same type of partnership has yet to happen in Jordan, it prompted Abdel-Jaber to build an internship program into Palma Consulting’s recruitment process. She several engineering schools and informally connecting with relevant faculty members, who would recommend students with a good blend of scientific and personal skills as intern candidates.

Over time Tamara created a steady stream of students pulled from 10 universities across the region. She takes on average three interns per semester. Around 40-50 interns have gone through Palma to date, with around 10 hired as full time consultants. Alumni that were not hired by Palma Consulting had found jobs in places like the UAE, Saudi Arabia, Jordan, Lebanon, Sudan and Libya, by that spreading the firm’s reputation across the region and generating new leads.

Key insight: Inspired by partnerships between German companies and academia, Palma Consulting developed an in-house internship program that enhanced its own recruitment and training processes while also enabling young graduates to augment their own skills and marketability.

45

DEMAND FOR SOFT AND HARD SKILLSEmployees must often utilize a collection of hard and soft skills to perform their core duties. Combining hard business development, sales and analytical skills with softer ones such as communication, initiative and a professional work ethic is ideal and in these firms. In MENA, with regional educational challenges and a young entrepreneurship ecosystem with companies still growing their teams and leveraging few channels for hiring, many entrepreneurs struggle to identify specific skill sets.

MOTIVATION, INDEPENDENCE AND HIGH-APTITUDE ARE THREE SOFT SKILLS THAT MENA ENTREPRENEURS HAVE THE MOST DIFFICULTY FINDING

Figure 23Soft skills that entrepreneurs have diffculty finding in job applicants

42%

39%

37%

31%

26%

26%

22%

3%

16%

16%

Motivation

Independence

High aptitude

Time management

Communication

Leadership

Personal skills

Teamwork

Flexibility

We do not have trouble finding any soft skills

BASE: N=867

Multiple Response Question

46

Our survey data suggests that the top soft skills that surveyed entrepreneurs have difficulty finding are motivated employees (42%), independence (39%) and high aptitude (37%).

“Finding individuals with the appropriate combination of technical and professional skills is highly challenging. There are a lot of people with technical backgrounds, but finding someone with a professional attitude, presentation skills, and the right work ethic is the problem.”- Amr Shady, Chairman, TA Telecom

HIGHER PERCENTAGES OF SCALEUPS REPORT HAVING DIFFICULTY FINDING EMPLOYEES WITH TIME MANAGEMENT AND WORK SKILLS

Figure 24Soft skills that entrepreneurs have difficulty finding in job applicants (scaleup vs non scaleup)

Motivation

Independence

High aptitude

Personal skills

Teamwork

40%

37%

36%

22%

22%

39%

34%

33%

Time management27%

22%

Communication25%

26%

Leadership29%

26%

20%

12%

Flexibility14%

11%

2%

3%We do not have trouble finding any soft skills

Scaleup

Non-scaleup

BASE: N=439

Multiple Response Question

47

For the most part, scaleups and non-scaleups report similar challenges (Figure 24) except for a difference in finding employees with good teamwork skills. For this point, 22% of scaleups report good teamwork skills as a major challenge whereas only 12% of non-scaleups report it. This may potentially be a result of the fact that scaleups face more difficulties building effective teams due to their growing size.

The top soft skills that were most challenging to find in job applicants remained consistent across countries. Each of the four top soft skills that is hard to come by was cited by at least 18% of entrepreneurs across surveyed countries. Motivation was the most-selected soft skill in Jordan, while ndependence represents the biggest challenge in Egypt and Morocco.

“One of the main challenges is that the few people with the technical skills we're looking for are employed by large companies and expect really high paychecks. We need to target recent grads whose salary expectations are not as high. Therefore, a way to more effectively connect startups with recent grads looking for jobs would be helpful”. - Mostafa Farahat, cofounder and general manager, Nafham

IN TERMS OF HARD SKILLS, ENTREPRENEURS REPORT HAVING THE MOST DIFFICULT FINDING SALES, BUSINESS DEVELOPMENT AND MANAGEMENT SKILLS

Figure 25Hard skills that entrepreneurs have diff culty finding in job applicants

Sales

Business Development

Management

Marketing

Programming

Analysis

Communication

Writing

Graphic Design

Administrative

Financial

We do not have trouble finding any hard skills

Linguistic

Legal4%

6%

7%

10%

11%

13%

14%

15%

21%

22%

23%

24%

27%

28%

BASE: N=887

Multiple Response Question

48

When comparing access to these skills for scaleups and non-scaleups, we see that a higher percentage proportion of scaleups have difficulty finding, business development (32%) managerial (32%) and marketing skills (25%), compared to non-scaleups (25%, 19% and 16% respectively), as seen in Figure 26 below.

“Four things need to change: 1) Education system - curricula are outdated, universities are too rigid and they must listen to the marketplace; 2) Government – it is not doing its job; 3) Private sector - speak to education institutions and government; and 4) Culture - many people do not have jobs and are not searching for a job by choice. People have to change their mindset and see the opportunity of the entrepreneurial landscape”. - Marwan Ziadat, former managing director, Darebni TV

49

LARGER PERCENTAGES OF SCALEUPS REPORT CHALLENGES FINDING BUSINESS DEVELOPMENT, MANAGEMENT AND SOFT SKILLS COMPARED TO NON-SCALEUPS

Figure 26Hard skills that entrepreneurs have difficulty finding in job applicants (scaleup vs nonscaleup)

Programming13%

17%

Marketing25%

16%

Management32%

19%

Business development32%

25%

Sales32%

28%

Analysis22%

18%

Communication17%

16%

Writing11%

12%

Graphic Design15%

9%

Administrative16%

12%

Financial10%

5%

We do not have trouble finding any hard skills

7%

7%

Linguistic4%

5%

Legal2%

3%

Scaleup

Non-scaleup

BASE: N=439

Multiple Response Question

50

The most challenging hard skills to find are also the most demand skills by entrepreneurs.When assessing by country, we find that sales, business development, management, marketing, programming and analysis were noted as the most demanded skills. Sales skills are in particular demand in Saudi Arabia, Bahrain and Jordan, marketing in Palestine and communication skills in Morocco.

“Greatest challenge is the lack of technical skill in Egypt. Long term, it would be great if universities could help remedy this. In the short term, Egypt needs more coding camps, hackathons and workshops. There are so many services for entrepreneurs and learning how to start a business, but the services for people to develop the technical skills that so many entrepreneurs really need are lacking.” - Amr Saleh, CEO, Integreight

CHALLENGES TO RECRUITING AND RETAINING EMPLOYEESRecruiting and retaining employees is another critical element within the process of building teams and scaling companies.

Employee retention is contingent on a multitude of factors such as salary, learning and promotion prospects as well as company culture and employee-manager relationships. Additionally, the allure of stable work opportunities and better income prospects can influence one’s career choices. Furthermore, while there is a general discussion regionally of the reliance on the public sector employment, fewer entrepreneurs in our sample see the government as a competitor for talent relative to corporations and other startups and SMEs.12

“It's important to create a community of like-minded people who will form a coherent working culture. Also, the fact that employees can see that they're able to continue to develop their careers while at the company (promotions, etc) makes people want to stick around at the company. Dr. Bridge has an informal training program in which senior level employees hold trainings for lower level employees.”- Amir Barsoum, CEO, Vezeeta by Dr Bridge

12. Youth in the Middle East and the Job Market, Saif, Ibrahim and Abdul Khalek, Joulan, Carnegie Endowment for International Peace, 2011

51

SURVEYED ENTREPRENEURS SEE CORPORATIONS AS THEIR PRIMARYCOMPETITION FOR ATTRACTING EMPLOYEES

Figure 27Entrepreneurs’ main competitor for attracting employees

Surveyed startups face competition for talent from corporations (50% and to a lesser extent from other startups (25% and government institutions (9%) as shown in figure 27 above. Corporations provide stability, steady growth, attractive compensation, and various incentives. Additionally, 4 % of the surveyed workforce believes public sector employment is more attractive than work at a startup or SME, suggesting that the consistency and stability provided by governments is an allure for employees in the region. The pattern is consistent through the surveyed countries and industries. Government jobs are a second choice for the surveyed workforce in North Africa and Bahrain, while NGOs are a popular choice in Palestine.

50%Corporations

9%Government

6%Non-profit, NGOs

25%Other startups, SMEs

%

%

“The level of professionalism and commitment is very low. Can't have this at a startup. Students must be more exposed- people just go to school and study whatever their parents want them to. Degrees aren’t useful for assessing candidates, as education is not strong in the region. Exposure is missing- people don't know what's out there in the labor market.” - Sima Najjar, founder and CEO, Ekeif

BASE: N=863

.

52

MORE THAN 50% OF ENTREPRENEURS IN EGYPT, JORDAN, LEBANON, MOROCCO, SAUDI ARABIA AND UAE SAY THAT CORPORATION ARE THEIR MAIN COMPETITORS

Figure 28Entrepreneurs’ main competitor for attracting employees (per selected countries)

Corporations

Government

Other Startups, SMEs

Family Businesses

Non-profit, NGOs

BASE: N=419

Bahrain 35%

Egypt 55%

Jordan 51%

Lebanon 57%

Morocco 55%

Palestine 38%

KSA 64%

Tunisia 45%

UAE 53%

Bahrain 16%

Egypt 10%

Jordan 3%

Lebanon

Morocco 14%

Palestine 14%

KSA 11%

Tunisia 22%

UAE 1%

Bahrain 4%

Egypt 3%

Jordan 3%

Lebanon 1%

Morocco 2%

Palestine 29%

KSA 0%

Tunisia 6%

UAE 2%

16%Morocco

16%Palestine

21%KSA

20%Tunisia

36%UAE

24%Egypt

25%Lebanon

28%Jordan

33%Bahrain

5%Morocco

2%Palestine

2%KSA

2%Tunisia

1%UAE

1%Egypt

3%Lebanon

7%Bahrain

3%Jordan

3%

ra de cts most common answers c osen

53

“Big companies usually employ people who have the proven ability to deliver quality results, and convincing them to leave their jobs and come to our small startup is hard because doing so is so risky. When you're at a startup, your career has the potential to grow rapidly if the company grows rapidly. And when you're an employee at a startup, your voice is meaningful; you're an essential member ”- Mokhtar Rawy, former cofounder and CEO, Swipe ’n Tap

54

LACK OF JOB STABILITY, PROFESSIONAL DEVELOPMENT PROSPECTS AND LOW SALARY ARE THE TOP THREE REASONS WHY THE SURVEYED WORKFORCE IS NOT WILLING TO WORK FOR A STARTUP

Figure 29Factors that contribute to the workforce’s disinterest in working for a startup

Lack of career prospects or professional development

Lack of job stability

The salary is not sufficient

Other

My family does not want me to work for a startup

The brand is not strong enough

Insufficient learning opportunities

4% 5% 3% 8% 22%

31%

27%

Figure 29 shows that a lack of career prospects (27%) and a lack of job stability ( %) both deter workforce participants from working with a startup and could also limit astartup’s employees’ long-term interest in remaining with the company.

BASE: N=172

55

HIGHER SALARY PROSPECTS IS THE MOST COMMONLY-CITED REASON FOR EMPLOYEES LEAVING STARTUP

Figure 30Why did employees leave your company?

BASE: N=863

2% 9% 10%

10%

13%

18%

19%

21%

43%

Wan

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Multiple Response Question

56

Figure 31Why did you leave your job at a startup?

The

sala

ry w

as n

ot

suffi

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com

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dow

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I was

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ed in

th

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ork

I was

fire

d

26%

20%

11%

10%

6% 6% 3% 1%

BASE: N=519

Multiple Response Question

57

Securing skilled workers over the long term is a primary concern for companies of any size. Insufficient salary comes up as a top reason for leaving job in a startup, cited by both entrepreneurs and workforce. 43% of surveyed entrepreneurs cited that the main reason why employees left their company is because they wanted higher salaries, 26% employees cited insufficient salary being the main reason why they left their job at a startup.

Brain drain and general regional challenges also compound this issue. The World Economic Forum’s Global Competitiveness Report highlights the difficulties of some MENA countries to retain talent, with six out of ten countries performing below the OECD high-income country average (Appendix B, table ). In particular, lger a, gy t, un s a and Lebanonunderperform their peers in the region. Discontent is not just limited to these countries, as 30% of respondents to the Bayt.com Middle East Salary Survey said that they are planning to look for a better job as an expat in another country.

58

Case Study:

SOUKTEL, PALESTINE

Motivation as a tool to attract and retain high-performing employees

Souktel, a labor market focused mobile solutions development company based out of the West Bank, has witnessed significant product growth driven largely by client demand since its start in 2007. However, growing a company within the region’s restrictive political economic environment has been a challenging experience—as top regional talent in the IT sector is migrating to the US, the GCC, or Europe. As a result, Souktel uses specific approaches to find and attract highly skilled employees.

The company’s cofounder Jacob Korenblum says that Souktel’s priority is to recruit locally based Palestinians. In addition, however, the company also looks to hire Palestinians living abroad. Many Palestinians living in the diaspora are interested in returning home, if comparable job opportunities are available—opportunities which value their global exposure to doing business.

Korenblum has found that the best way to incentivize diaspora Palestinians to return is to offer a blend of unique work opportunities and compensation above the market norm. “Our top diaspora talent understand that by returning to Palestine they can have very unique, rewarding jobs which just aren’t available in the US to the same extent. It’s expensive to run a company in the West Bank, but we want our employees to maintain a good quality of life. We think of cutting costs elsewhere to pay higher salaries as a way to care for the company while securing top talent that drives growth.” He has also made training and development on the job a flat versus top-down process by emphasizing job shadowing, knowledge sharing, and transparency. He has also managed to bring in development consultants and trainers on a pro bono basis.

: Souktel treats talent acquisition as a long-term investment.Beginning with the interview process through training and development, the company focuses on identifying and motivating the right fit and then utilizes an array of resources to attract, cultivate and retain the talent

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EXPLAINING THE GAPSAlthough many entrepreneurs in our sample indicated high levels of satisfaction with their employees’ skills, many barriers remain, which could place limitations on how effectively startups can hire and scale their companies. We point to our main factors that couldcontribute to these challenges for MENA’s entrepreneurs as they create and scale their teams.

Education system:

Regionally, there is widespread discussion on how educational challenges prevent students from entering the labor market.13 While the region is experiencing increased tertiary enrollment rates, which is set to continue into the foreseeable future, the quality of education systems remains in question.14

Unemployment rates are still high despite ostensible educational gains.15 Many entrepreneurs explained their difficulties in finding the right talent as due to students not receiving the proper mix of hard and soft skills in universities. Additionally, some pointed to few training opportunities following graduation for young labor market entrants to augment their skill sets.

“We need to have small groups and workshops to enhance the quality of talent. Do early work with students at schools and universities. You connect with people, you learn, you correct yourself. Europe is a very good example - the Twinning program, which is a Paris and Berlin gaming collaboration. Talent of a person is one thing, but the ethics is something else. We need to find a solution for ethics and someone who is not afraid of failure.” - Nour Khrais, founder and CEO, Maysalward

Many entrepreneurs in our survey indicate that they are competing with corporations to attract employees. These larger, established entities offer higher salaries and are more stab e than startups. Job seekers prioritizethe brand, salary and job stability over the leadership and growth opportunities that younger companies can offer.

Competition from corporations:

13. Jobs for shared prosperity: time for action in the Middle East and North Africa, World Bank, 201314. Breaking even or breaking through: reaching financial sustainability while providing high quality standards in HigherEducation in the Middle East and North Africa, World Bank, 201115. Global Employment Trends for Youth, International Labour Organization, 2015

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Hiring procedures and channels:

Cultural perceptions:

Many companies in our sample are still young with over 60% being five years or younger. While firms will mature and structure operations at varying speeds, human resource processes are most likely still being developed, and while some indicated during interviews that they offer training opportunities, formalized skills development programs are still rare. Additionally, most surveyed companies only rely on a few channels for hiring employees, suggesting that they are not accessing the full range of options for finding new staff.

With relatively few exits, the merits and opportunities for working at a startup have yet to take root in the region. As a result, the level of interest in joining a young company, despite a lack of financial and non-financial incentives, is still arguably low for much of MENA’s labor force. High cost of failure, lack of regional role models are some of the factors affecting weak perception of startup career in the region.

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• Promote a partnership mindset: present and build a collaborative culture in interviews withpotential employees and amongst the startup’s staff. As startups will have difficulty paying largesalaries to employees, relative to corporations and governments in MENA, they can instill acommon sense of purpose, ownership and vision within their companies to recruit and retainstaff.

• Share knowledge and ownership: open dialogue and shared vision were often discussed ininterviews with entrepreneurs as important facets of building good rapport with employees andretaining talent as well. Entrepreneurs discussed how a culture of knowledge sharing was ofparamount importance in building teams, yet not-often practiced in MENA. To counter this,entrepreneurs should emphasize openness and collaboration with their teams from day one.

CONCLUSION AND RECOMMENDATIONSThe issue of talent acquisition and development is of critical importance in MENA’s entrepreneurship ecosystem. It is an essential resource for starting and scaling companies, yet identifying, recruiting and retaining talent is a challenge for MENA’s entrepreneurs. With a nascent startup community and only early indicators of impact, entrepreneurs in MENA must contend with multiple hurdles when recruiting and growing their teams.

Cultural trends, hiring methods, educational challenges and the allure of stable work at large, established corporations all complicate the team building process for MENA’s entrepreneurs. While surveyed entrepreneurs want to hire, indicate satisfaction with their employees and express optimism in available talent in their local as well as neighboring markets, a multitude of factors limit the degree to which they can effectively find, hire and retain talent.

Many players in and outside of startups ultimately contribute to shaping teams and scaling them. Universities, policymakers, media, incubators and entrepreneurs themselves all have roles to play in maximizing the impact that the region’s human capital can have on its startup community.

The below recommendations are a list of potential methods and interventions these players can implement to support access to talent issues for MENA’s entrepreneurs. These measures are not a prescription for su , but can help ecosystem stakeholders,including entrepreneurs themselves, identify good practices for tackling various facets of the talent access equation in the region.

Recommendations for improving access to talent for MENA’s entrepreneurs:

ounders and t e r com an es are start ng and grow ng teams n ased on nter ews, t ere are se eral d st nct ste s entre reneurs can take to ensure t at t ey ma m e t e r e orts and resources to u ld strong teams

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• Experiment with financial and non-financial incentives: entrepreneurs should exploreways to combine both financial and non-financial incentives. As noted in our survey findings,labor force participants were willing to sacrifice higher salaries if they could obtain stockoptions and training opportunities. Combining these and other incentives can help convinceemployees of the importance of working for a startup as well as remaining with it for the long-term.

• Diversify recruitment channels: in addition to personal and professional networks,explore partnerships with universities, collaborations with corporations to acquire mentorshipand employee exchanges, internships, freelancers and remote hires can all assist startupsin accessing new hiring channels and opportunities. Continuous networking efforts andleveraging employee networks to find talent can also help entrepreneurs maximize their reachfor future recruitment efforts.

Incubators and accelerators: functioning as offices, knowledge hubs and networks, incubators and accelerators play a significant role in channeling expertise to startups. As such, they can also play critical roles in supporting access to talent.

• Mentorship: within their networks of investors, seasoned entrepreneurs and corporateexecutives, incubators and accelerators have access to expertise on helping companies toscale. Creating mentorship connections between these experts and incubated companies, ininterest of building knowledge of employee recruitment and retention practices, can help indisseminating best practices.

• Recruitment platforms: given their role as gathering points and hubs for the ecosystem,incubators and accelerators can also support developing specialized online platforms for startup recruitment. These sites can cater directly to meeting startups’ talent needs and alsofocus on building communication between entrepreneurs and prospective employees.

• Legal support and HR support: entrepreneurs interviewed for this study pointed to the needfor legal support to understand laws regarding stock options and equity sharing schemes withemployees as well as other legal aspects of the hiring. Incubators and accelerators can helpconnect startups with lawyers to guide them through this process.

Media: media outlets can play a direct role in shaping public awareness around entrepreneurship and spreading knowledge on the startup culture.

• Highlight startup stories: while the startup ecosystem in MENA is still young and manyentrepreneurs as well as ecosystem supporting institutions have much ground to cover, the media can play a significant role d knowledge to the rest of the region onstartup culture and values. Arguably, in geographies such as MENA where the appeal ofstarting a company and working for a startup are still underdeveloped, media can play an even more significant role in popularizing the concept of startup employment.

• Facilitating recruitment: given their reach and online and offline channels, media can helpstartups reach larger audiences for recruitment purposes. Startup-specific partnerships canenable entrepreneurs to leverage the media’s access to advertise both job postings as well astheir companies in general to the general public.

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Policy makers: like their role in the entrepreneurship ecosystem as a whole, policy-makers are chiefly responsible for providing the foundation and environment to enable talent development and acquisition.

• Educational reform: focus on educational policy reforms, helping schools and universitiesdevelop and administer curricula that focuses on 21st century skills and entrepreneurialthinking amongst students. While these specific education practices do not guarantee thatstudents will become entrepreneurs or join startups as employees, it can enhance theecosystem’s impact and reach to prospective labor market entrants form a young age.

• Startup support programs: governments can also engage in dialogue with entrepreneursto explore methods for supporting startups’ salaries. Subsidies of employee salaries or taxbreaks to support the team building process could help entrepreneurs access talent. Theseefforts hinge squarely on communication and idea sharing between the public sector and theecosystem.

• Data and transparency: governments can also help startups in providing access to dataon hiring trends and tendencies in their countries. With this knowledge, startups could obtaina better understanding of the main hiring patterns in their local labor markets and

d

Universities: though relatively few entrepreneurs in our sample used regional universities to recruit employees, the academic sector plays a fundamental role in developing talent and preparing it for the labor market in MENA.

• Engage with entrepreneurship ecosystem: universities can build partnerships withincubators and accelerators, financial institutions and NGOs in the ecosystem to shareknowledge, host events, create dialogue around the skills needed to compete in the privatesector as well as help entrepreneurs source talent.

• Leverage career offices: university career offices can develop relationships with startups tohelp place students in class projects, internships or full-time positions. Career offices can alsohold career fairs and lectures for startups to present their companies to students and discussthe culture and merits of working at a startup. Additionally, career offices can include startupswithin their databases of employers, allowing to easily identify candidates based on a specificset of skills, availability et c .

• Promote an entrepreneurial culture: in addition to infusing entrepreneurial thinking andconcepts into curricula, engage students in entrepreneurial projects, competitions andhackathons. Entrepreneurship events and faculty research focused on entrepreneurshipcan also help spur more interest in the startup community within universities. Additionally,allowing students to lead these initiatives within the university can help to cultivate a moreentrepreneurial mind-set among them.

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METHODOLOGYs re ort com nes ot ual tat e and uant tat e data a out entre reneurs and t e

la or orce t roug out t e reg on ata and ns g ts were collected t roug two se arate sur eys and more t an nter ews w t entre reneurs, ecosystem stake olders, and e erts

1. Survey of entrepreneurs and the workforce

• Entrepreneurs: e amda esearc a conducted a sur ey o entre reneursn t e reg on rom o em er to January and rece ed res onses rom aool o more t an , entre reneurs dd t onally, a grou o unds, ncu ators and

ot er nst tut ons su ort ng entre reneurs n c rculated t e sur ey to t e r ownnetworks ur ey res ondents answered uest ons on t e r strateg es or r ng andreta n ng em loyees, and were asked to determ ne w at s ec c sk lls t ey are a ngd culty nd ng as t ey are scal ng t e r o erat ons

• Labor force: e , w t su ort rom ayt com, u lt an onl ne sur ey t at ocuses ont e ers ect e o s la or orce es ondents were asked a out t e r currentem loyment status, o story and ackground, t e nanc al and non nanc al ene ts t eyalue w en c oos ng a os t on, as well as t e r ews on work ng or a startu e sur ey

was c rculated t roug ayt com s w de data ase or t ree mont s, rom cto er toecem er, , and nd duals work ng n ar ous sectors and ndustr es, com leted

t e sel adm n stered sur ey

2. Interviews with entrepreneurs and ecosystem experts

• e also conducted o er nter ews w t an e ert network o entre reneurs,n estors, ncu ators and lawyers n ese art c ants were asked to descr e t e r

r ng strateg es, t e r ol c es or cult at ng a good work en ronment, est ract ces t eywould recommend and t e lessons t ey a e learned rom t e r e er ence n t eecosystem

Data Constraints: ot t e entre reneur and work orce sur eys were sel adm n stered and sel select ng ot sur eys were conducted n ot ngl s and ra c s t ere s no o c al gure or t e total num er o entre reneurs or startu s n , t e nd ngs n t s re ort are only re resentat e o t e ews o t s sam le o t e reg on s commun ty o entre reneurs and o t e sur eyed la or orce

65

APPENDIX A

CountriesEgyptJordanLebanonPalestineUAEMoroccoBahrainSaudi ArabiaTunisiaAlgeriaKuwait

Regional groups:LevantNorth AfricaGulf

AgeLess than 1 year1-4 years5-9 years10 years and older

YearsNoneLess than 1 year1-2 years3-5 years6-10 years11-15 years16-20 yearsMore than 20 years

%17%17%14%10%10%8%6%6%6%4%2%

%41%34%25%

%5%58%20%17%

%5%4%11%21%31%15%7%6%

1a Main office location BASE: N=963

1b Main office location

2 Company ageBASE: N=963

3 Founder's experienceBASE: N=769

Levant 41%

North Africa 34%

Gulf 25%

None5%

Less than 1 year or none

4%

1-2 years11%

3-5 years21%

6-10 years31%

11-15 years15%

16-20 years7%

More than 20 years6%

Egypt17%

Jordan17%

Lebanon14%

Pales7ne10%

UAE10%

Morocco8%

Bahrain6%

SaudiArabia6%

Tunisia6%

Algeria4%

Kuwait2%

Lessthan1year5%

1-4years58%

5-9years20%

10yearsorolder17%

ro ilin entrepreneurs in our sample

66

IndustrySoftware development and serviceOtherOnline servicesEcommerceArt and creative industriesMarketing and PRServicesTelecom and mobileManagement or technical consultingEducationMedia and journalismContent generationManufacturing servicesEnvironmentalFinancial servicesRetailTourism and hospitalityGamingPharmaceutical and healthcareFood and beverage

%17%12%8%7%6%6%5%5%4%4%4%4%4%3%3%2%2%2%2%2%

4 Industry distributionBASE: N=963

ValuesWorking full time (30 or more hours per week)Unemployed: Professional with past working experienceOtherWorking part time (fewer than 30 hours per week)Unemployed: Recent graduateFull-time student

%72%12%6%5%4%1%

5 Current employment statusBASE: N=1449

72%

12%

6%

5%4%

1%

Workingfull3me(30ormorehoursperweek)

Unemployed:Professionalwithpastworkingexperience

Other

Workingpart3me(fewerthan30hoursperweek)

Unemployed:Recentgraduate

Full-3mestudent

ro ilin t e or or e in our sample

CountriesEgyptSaudi ArabiaJordanUAEAlgeriaTunisiaMoroccoLebanonOtherIraqKuwaitQatarPalestineLibyaOmanBahrain

%16%13%11%9%9%9%8%6%5%4%3%2%2%1%1%1%

6 Which country do you currently work in?BASE: N=1697

Egypt16%

SaudiArabia13%

Jordan11%

UAE9%

Algeria9%

Tunisia9%

Morocco9%

Lebanon6%

Other5%

Iraq4%

Kuwait3%

Qatar2%

PalesJne2%

Libya1%

Oman1% Bahrain

1%

67

Education levelBachelorMastersOtherVocational rainingAssoc degree Secondary ducation PhDPrimary or no education

ValueMaleFemale

AgeLess than 25 years old25-3030-3535-4040-4545-50More than 50

%51%26%7%6%5%4%2%0%

%79%21%

%4%16%19%21%17%10%13%

7 Highest level of educationBASE: N=1435

8 GenderBASE: N=1697

9 AgeBASE: N=1566

Bachelors51%

Masters26%

Other7%

Voca5onalTraining5%

AssociateUniversityDegree

5%

SecondaryEduca5on4%

PhD2%

Primaryornoeduca5on

0%

Male79%

Female21%

4%

16%

19%

21%

17%

10%

13% Lessthan25yearsold

25-30

30-35

35-40

40-45

45-50

Morethan50

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CountryUnited Arab EmiratesQatarBahrainSaudi ArabiaJordanMoroccoEgypt, Arab Rep.TunisiaLebanonAlgeria

Value5.95.954.73.73.62.72.52.42.4

Global ranking3512184859108124127128

Table 1a: Capacity to attract talent d

CountryQatarUnited Arab EmiratesBahrainSaudi ArabiaJordanMoroccoEgypt, Arab Rep.TunisiaLebanonAlgeria

Value5.75.54.84.63.83.42.92.72.62.5

Global ranking3517214476101118122125

Table 1b: Capacity to retain talent d

APPENDIX B

Average salaryEgyptJordanLebanonUAE

IT sector Min600160010002500

IT sector Avg950220019004900

Table 1f: IT sector minimum and average salary in selected countries, US Dollars D d

ValuesMotivationIndependenceHigh aptitudeTime managementCommunicationLeadershipPersonal skillsTeamworkFlexibilityWe do not have

trouble findingsoft skills

Bahrain30%37%25%40%23%26%32%12%16%0%

Egypt42%50%39%41%19%22%21%15%17%2%

Jordan52%35%42%26%33%25%22%18%14%1%

Lebanon41%39%30%31%21%28%18%12%20%8%

Morocco32%52%24%24%24%23%17%17%12%6%

Table 2a: What soft skills do you have difficulty finding in job applicants (by selected countries)?BASE: N=825

ValuesMotivationIndependenceHigh aptitudeTime managementCommunicationLeadershipPersonal skillsTeamworkFlexibilityWe do not have

trouble findingsoft skills

Palestine41%31%42%36%28%32%32%24%9%2%

Saudi Arabia37%33%37%39%14%29%24%16%18%6%

Tunisia43%33%55%16%33%22%20%16%16%2%

UAE43%43%37%23%34%29%20%9%13%3%

69

Values

MotivationIndependenceHigh aptitudeTime managementCommunicationLeadershipPersonal skillsTeamworkFlexibilityWe do not have

trouble findingsoft skills

Values

MotivationIndependenceHigh aptitudeTime managementCommunicationLeadershipPersonal skillsTeamworkFlexibilityWe do not have

trouble findingsoft skills

Art and creative industries

44%29%29%36%22%31%18%16%31%0%

Media and journalism

55%29%39%35%32%32%19%23%19%0%

Content generation (i.e. written, video, etc.)37%37%33%50%20%7%13%10%27%3%

Online services (other)

40%44%44%31%25%27%19%13%15%0%

Ecommerce

39%50%36%36%20%28%17%13%14%2%

Software development and service45%44%41%34%29%25%19%13%9%3%

Management or technical consulting

18%28%38%20%35%33%28%23%30%5%

Telecom and mobile

31%36%43%26%19%26%24%17%17%10%

Marketing and PR

39%47%33%35%35%29%20%8%14%2%

Table 2b: What soft skills do you have difficulty finding in job applicants (by selected industries)?BASE: N=526

Table 3a: What hard skills do you have difficulty finding in job applicants (by selected countries)?BASE: N=745

Bahrain35%25%19%16%19%19%14%11%7%11%11%9%5%4%

Egypt28%29%28%26%23%22%24%9%13%11%11%7%7%5%

Jordan32%27%24%26%28%23%10%16%16%9%11%4%2%5%

Lebanon28%24%18%13%29%20%9%16%11%6%5%5%3%13%

Morocco24%21%24%7%19%9%13%25%12%9%4%10%4%16%

ValuesSalesBusiness Development Management Marketing Programming AnalysisGraphic Design Communication Writing Administrative FinancialLinguisticLegalWe do not have trouble finding hard skillsValuesSalesBusiness Development Management Marketing Programming Analysis Graphic Design Communication Writing Administrative Financial LinguisticLegalWe do not have trouble finding hard skills

Palestine27%34%22%39%14%22%13%15%21%19%9%4%5%6%

Saudi Arabia31%33%22%29%20%27%10%10%10%8%18%10%4%6%

Tunisia12%22%25%14%16%25%14%16%10%18%8%2%4%6%

UAE26%30%27%25%20%22%8%18%22%7%11%4%3%4%

70

Table 3b: What hard skills do you have difficulty finding in job applicants (by selected industries)?BASE: N=535Values

Business Development SalesManagement Marketing ProgrammingWritingGraphic design Communication Administrative AnalysisFinancialLinguisticLegalWe do not have trouble finding hard skills

Values

Business Development SalesManagement Marketing ProgrammingWritingGraphic design Communication Administrative AnalysisFinancialLinguisticLegalWe do not have trouble finding hard skills

Art and creative industries

36%24%27%20%11%4%20%16%22%22%9%7%4%4%

Media and journalism

15%30%18%15%15%15%21%33%15%15%18%6%6%3%

Content generation (i.e. written, video, etc.)23%29%16%26%26%35%32%13%6%10%3%10%3%0%

Online services (other)

26%34%16%22%37%11%18%18%8%24%4%3%5%5%

Ecommerce

32%22%26%29%34%12%17%11%5%23%6%9%3%5%

Software development and service29%30%17%27%36%12%20%14%7%21%4%5%1%6%

Management or technical consulting

40%28%25%5%23%33%3%10%10%20%20%3%8%3%

Telecom and mobile

26%26%21%31%19%12%14%17%19%12%10%5%2%12%

Marketing and PR

24%29%37%31%14%20%22%18%8%22%8%14%0%2%

Table 4a: What are the top challenges to hiring employees (by selected countries)?BASE: N=909

ValuesIdentifying the right skills or expertise

Finding people who will commit long-term

Identifying the right personality

Finding people who are interested in working for a startup

Knowing where to look for potential hires

Finding the right level of experience or seniority

Negotiating a reasonable salary with new hires

Having good HR staff or HR processes

ValuesIdentifying the right skills or expertise

Finding people who will commit long-term

Identifying the right personality

Finding people who are interested in working for a startup

Knowing where to look for potential hires

Finding the right level of experience or seniority

Negotiating a reasonable salary with new hires

Having good HR staff or HR processes

Bahrain29%35%24%32%21%18%23%5%

Egypt32%42%27%33%23%17%8%5%

Jordan46%44%24%22%13%23%6%3%

Lebanon43%27%31%21%25%26%9%2%

Morocco51%32%28%27%5%19%7%5%

Palestine55%34%22%31%6%27%5%3%

Saudi Arabia56%36%18%38%20%8%8%2%

Tunisia58%20%36%11%13%16%4%9%

UAE40%36%36%28%14%14%7%6%

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Top challenges

Identifying the right skills or expertise

Finding people who will commit long-term

Identifying the right personality

Finding people who are interested in working for a startup

Knowing where to look for potential hires

Finding the right level of experience or seniority

Negotiating a reasonable salary with new hires

Having good HR staff or HR processes

Top challenges

Identifying the right skills or expertise

Finding people who will commit long-term

Identifying the right personality

Finding people who are interested in working for a startup

Knowing where to look for potential hires

Finding the right level of experience or seniority

Negotiating a reasonable salary with new hires

Having good HR staff or HR processes

Art and creative industries

43%38%28%21%28%17%9%4%

Media and journalism

40%23%34%26%17%23%14%0%

Content generation (i.e. written, video, etc.)65%21%15%29%15%32%9%3%

Online services (other)

39%40%31%25%16%21%6%4%

Ecommerce

28%36%28%36%17%23%10%4%

Software development and service

46%42%32%29%12%19%4%2%

Management or technical consulting

34%34%37%24%22%15%2%2%

Telecom and mobile

42%24%27%42%11%13%11%4%

Marketing and PR

45%34%38%25%8%21%11%2%

Table 4b: What are the top challenges to hiring employees (by selected industries)? BASE: N=574

ReasonsWanted a higher salary

Wanted to work for a company with better brand name or prestige

They were fired

Wanted more opportunities for promotion

Wanted more benefits (i.e. insurance)

Wanted to work for a more stable company

Wanted to pursue an educational degree

Wanted more flexible hours or working conditions

Wanted more training opportunities

ReasonsWanted a higher salary

Wanted to work for a company with better brand name or prestige

They were fired

Wanted more opportunities for promotion

Wanted more benefits (i.e. insurance)

Wanted to work for a more stable company

Wanted to pursue an educational degree

Wanted more flexible hours or working conditions

Wanted more training opportunities

Bahrain49%20%11%9%13%11%7%13%2%

Egypt40%32%18%11%12%22%10%8%3%

Jordan56%16%22%6%9%16%9%10%2%

Lebanon37%15%25%10%8%18%19%8%0%

Morocco17%13%30%11%8%17%14%8%3%

Palestine53%15%26%11%7%25%14%11%0%

Saudi Arabia34%32%9%9%13%26%23%17%2%

Tunisia31%12%18%22%14%18%16%6%2%

UAE46%10%23%8%7%12%12%7%1%

Table a: Why do employees leave your company (by selected countries) ? BASE: N=818

Reasons

Wanted a higher salary

Wanted to work for a company with better brand name or prestige They were fired

Wanted to work for a more stable company

Wanted more opportunities for promotion

Wanted to pursue an educational degree

Wanted more benefits (i.e. insurance)

Wanted more flexible hours or working conditions

Wanted more training opportunities

Reasons

Wanted a higher salary

Wanted to work for a company with better brand name or prestige They were fired

Wanted to work for a more stable company

Wanted more opportunities for promotion

Wanted to pursue an educational degree

Wanted more benefits (i.e. insurance)

Wanted more flexible hours or working conditions

Wanted more training opportunities

Art and creative industries

47%12%21%14%5%19%5%16%0%

Media and journalism

39%15%27%15%15%21%6%15%3%

Content generation (i.e. written, video, etc.)53%10%30%23%3%13%13%10%0%

Online services (other)

30%20%29%18%12%18%5%8%3%

Ecommerce

34%9%34%22%8%15%8%8%2%

Software development and service

52%26%15%21%9%11%9%7%3%

Management or technical consulting

38%15%8%20%15%15%5%3%3%

Telecom and mobile

43%23%18%23%8%8%15%5%0%

Marketing and PR

43%19%28%13%11%9%17%11%0%

Table b: Why do employees leave your company (by selected industries) ? BASE: N=525

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Values

Corporations

Other startups, SMEs

Other

Government

Family businesses

Non-profit/NGOs

Values

Corporations

Other startups, SMEs

Other

Government

Family businesses

Non-profit/NGOs

Art and creative industries

42%42%9%7%0%0%

Media and journalism

55%24%0%6%3%12%

Content generation (i.e. written, video, etc.)50%27%7%3%3%10%

Online services (other)

55%28%8%4%1%4%

Ecommerce

52%22%11%9%2%5%

Software development and service

54%22%7%9%2%6%

Management or technical consulting

48%23%15%8%5%3%

Telecom and mobile

60%13%10%8%3%8%

Marketing and PR

57%26%4%9%2%2%

Table : Who is your main competitor for attracting employees (by selected industries)? BASE: N=525

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APPENDIX D

nstitution

4SpotsNamasteTenmou2M DOT NETAbu Dhabi UniversityAlKhawarizmy SoftwareAmerican University in CairoAskNativeAUC B iness School (Entrepreneurship Chair) Circle Apps LLCCoteriqueDrBridgeEdfa3lyEducate MeEdukittenF16AppsIdeal RatingsIntegreightKarmSolarNafhamPieRidePlanet 360Qafeer LabsRooftops EgyptStartup WeekendSuperMamaSwipe 'n TapTabshoraTasktyTA TelecomYebab.comBeladcomBetter Businesscoacharabia.comDarebni TVDASH VenturesEkeifKeenwashMaysalwardMedia PlusModern MediaPalma ConsultingQueen Rania Centre for EntrepreneurshipQuirkatSilicon BadiaSIT MENAWamda Capital965flowers.comEdge Food Rest urant Company

eration Manager at Almowazi.comYourAOKAUB Career CanterAUB Center for Innovation and EntrepreneurshipB Creative BoutiqueB SynchroBasmatyBBerryPin.comBeirut Creative ClusterCardioDiagnosticsEastline Marketing

Person

Srusti RanjanWeam ZabarHasan HaiderMohamed SaidRima ShabanHossam Mahgoub, Maissa MegahedSherif KamelAbdelmonem RagabDr. Ayman IsmailMohamed RoushdyDana KhaterAmir BarsoumMohamed AttyaYasmin Helal, Amr El SalaneklyRana SaidAhmed EssamMohammed Donia OR Youssri HelmyAmr SalehAhmed Zahran and Yumna MadiMostapha FarahatKarim ElmansiTarek NasrMuhammad (Rashad) Osama, Ahmed AbuiliazeedMahmoud El FikyHashem ZahranYasmine El-MehairyMokhtar RawyHady AhmedAhmed Galal, Ibrahim AbdeenAmr ShadyMurshed MohamedMohammed Hujeij, Talal AsfouraAbeer QumsiehMajd ArafatMarwan ZiyadadtOmar SatiSima NajjarHassan AtmehNour KhraisZaidoun KaradshehRamzi Halaby and Zafer YounisTamara Abdel-JaberMohammad ObaidatMahmoud Khasawneh, Candide KirkEmile CubeisyZaid FarekhLana Alamat Sulaiman Y. Al TarrahSulaiman Al-DerbasMohammed Al-RasheedRuba Al-SalehMaryam GhandourBijan AzadRamzi BarakatMichel ChammasAlia AdiBashir OsmanSalim TannousZiad SankariNemr Nicolas Badine OR Marc Dfouni

Country

BahrainBahrainBahrainEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptEgyptJordanJordanJordanJordanJordanJordanJordanJordanJordanJordanJordanJordanJordanJordanJordanJordanKuwaitKuwaitKuwaitKuwaitLebanonLebanonLebanonLebanonLebanonLebanonLebanonLebanonLebanon

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SilkorSoumrani Lawyers and Legal CounselsSouq.comViamobileBuzzeffLixia Capsia GestionisAlJazeera Global Services & Investments (AGSI)

National Business CentrePalestine Information and Communications Technology Incubator (PICTI)Souktel Inc.YamsafereduTechnozGloworkRubixLabsRummanSaletabGame Power 7Cynapsys Software EngineeringDigitalManiaZouZ174 Solar2pure3eeshoAbaya AddictBeam WalletHsoub.comIndigo LawyersInnovation360JUST FALAFELKhalifa FundMumzworldNibras.comPixelBugREIDIN.comrichys

d

Lara TarakjianRita KhoriatyAyman HaddadKarim El KhouryJérôme MouthonWilliam FellowsSharifa AlbaramiMalak Al-ShaibaniHassan OmarJacob KorenblumFaris Zaher, Seri Abdelhadi, Sameh Alfar Diana Al-DajaneKhaled Al-KhudairDiana HassiMaria MahdalyMustafa Ahmed, Abdulaziz AljoufFadi MujahidImed AmmarWalid Sultan MidaniBilel BouraouiMujahid SalmanRudolf JabreRafah Al KhatibDeanna Khalil, Ahmed AduibNadim KhouryAbdulmohimen AalaghaCameron CrawfordKamal HassanFadi Hamze MalasSaer ImadMichael Ghandour, Mona Ataya Ammar KhayyatElie C. Youssef, Dany El EidAhmet KAYHANMazen Hawwa

LebanonLebanonLebanonMoroccoMoroccoOmanOmanPalestinePalestinePalestineQatarSaudi ArabiaSaudi ArabiaSaudi ArabiaSaudi ArabiaSyriaTunisiaTunisiaTunisiaUAEUAEUAEUAEUAEUAEUAEUAEUAEUAEUAEUAEUAEUAEUAE

Lebanon

LebanonLebanonLebanonLebanonLebanon

A2T: Access to Talent for MENA’s entrepreneurs by the Wamda Research Lab is licensed under a Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License.