PEOPLE POWER

Kazakhstan 2015 | EXECUTIVE GUIDE | FOCUS: ATTRACTING SKILLED WORKERS

Despite being the hardest to quantify, human capital has emerged as the most important asset in modern economies, and in Kazakhstan, where land and natural resources are abundant, skilled workers are the linchpin of economic success.

“Our most important task is to train a skilled class of executives. They will form the basis of new managerial elite, and lead Kazakhstan in the 21st century." With these words, President Nursultan Nazarbayev outlined the relationship between economic growth and skilled human capital.

In 2013, during the 26th plenary session of the foreign investors' council, the president informed attendants that, “we need to take several systemic measures to implement (our vision). The first is to fine-tune our education system to enable it to provide the process of innovations implementation with qualified specialists. Many of the investors present here have already faced the problems associated with the lack of required specialists. We need to cover the needs in engineering and technical specialists possessing appropriate competencies of international level. It should be done jointly with the business."

The challenges related to human capital have been confirmed by players across the national economy. The biggest obstacle is an immediate deficit of personnel, and a lack of qualified executives. Kazakhstan is still a relatively young country, and consequently its Soviet legacy is still affecting the labor market. Many executives do not speak English and are not familiar with modern business practices. At the same time graduates of western universities are returning to Kazakhstan looking for opportunities, however they lack experience. Expatriate managers ultimately fill this gap.

Recruiting qualified workers is not the only obstacle. Companies also struggle to retain talent. To do that, companies operating in Kazakhstan are investing in training, which is perceived as the best way to foster specific skills, and increase their loyalty to the company.

International players, ranging from IT to real estate, and from FMCG to Industry, are currently implementing their own strategies to retain their human capital.

Imperial Tobacco is investing in local employees, and the GM, Richard Parratt explained that, he wants “to recruit local people not for the job they are doing, but for the job they can do in three to five years' time. [Imperial Tobacco] is investing in local talent, and we always recruit people who challenge me on the basis of intelligence, as this pushes me to increase the performance of the entire company."

Philips gives its employees “the opportunity to gain expertise not only in their core direction, but to also get acquainted with adjacent fields and thus becoming real professionals in a wider area." DHL has its own international school in Moscow, with trainers and tailor made programs for Kazakhstani employees. Every single employee in the company participates in training on a yearly basis. Human capital is an asset in the hospitality industry as well, and Philippe Mahuas commented that, “Astana is a new city, which means there is no experience that has been developed over the last 20-30 years. The market is very much what you make out of it. There was only one hotel here a decade ago. Then seven years ago there were three hotels. Now we have seven. The challenge is to use the experience that you have and associate it with the local human capital. As Marriott, we are the training ground for the rest of the city. People come here to get experience and then go somewhere else." Ibrahim Celik stressed Rixos' commitment in the field of HR. “One untrained employee can cost you a lot and that is why last year we launched a new management training system: we selected 10 employees from our top employees and we developed a one year program, offering them the opportunity to work in other locations outside of the country."

In 2014, the Vice Minister of National Economy, Madina Abylkassymova commented that in the labor market, we observe an outflow of qualified work force from Kazakhstan and inflow of unqualified work force that does not have professional skills. As a result, the expenses of the government to train replacements for the professionals leaving Kazakhstan, to educate and retrain the incoming unqualified laborers are growing. Over the past fours years, the number of emigrants with higher education has outnumbered the number of skilled immigrants by 65%. The largest net outflow of skilled professionals is in technical, economic and teaching professions".

The Establishment of the Eurasian Economic Union in January 2015, officially allows free movement not only of capital and goods but also of people: this fact implies new challenges and opportunities for Kazakhstan. And while it is too soon to say how the new agreement will affect the country's shilled labor deficit, it is safe to say that firms will continue to invest heavily in human capital well into the future.