Since the fall of Saddam Hussein and the Ba’athist ruling regime in Iraq in 2003, economic opportunities have begun to appear in the country, attracting foreign corporations to enter the still-turbulent state and undertake new operations. These opportunities have drawn primarily energy and construction firms focused on oil extraction and the connected infrastructure and logistical support these industries need.
The Kurdish region of Iraq, however, has been able to attract a much more diverse range of foreign corporate investment because of its relative political stability and better infrastructure.
For many foreign companies (and for Iraqi companies, as well), this economic opening involves many firsts: Political realities essentially cut Iraq off from the rest of the world for more than 30 years. Before the political turmoil, Iraq was considered one of the more advanced countries in the Middle East with respect to business and education. Now, however, foreign companies entering the country find a talent pool that has been deeply isolated from advances in technology and international business norms and one that is, at times, understandably wary of foreign intent.
Beyond the significant infrastructure and security challenges in Iraq, how can companies successfully engage with talent throughout the country to build their business there?
Two Distinct Markets
As a starting point, companies are advised to make a strategic distinction between Iraq’s Kurdish region to the north and the rest of Iraq.
Iraqi Kurdistan, while part of greater Iraq, has operated under an increasing degree of autonomy since 1991, and its daily affairs are run by its own elected body, the Kurdistan Regional Government (KRG). Since the regime change, in 2003, the KRG has been able to increase its service delivery and infrastructure, which has dramatically improved the economic landscape and facilitated many investment projects. Consequently, Kurdistan should be considered a completely different business environment from the rest of Iraq because of the region’s stability and excellent security.
Currently, there are more than 2,000 foreign companies working in the Kurdish region. Kurdistan is also, in general, very pro-West. This is profoundly different from the business environment in greater (southern) Iraq, where opinion of the West is mixed. Foreign businesspeople and expatriates are now common in the Kurdish region but are still rare in southern Iraq. While the latter, as a result of security and infrastructure concerns, is relatively quiet in terms of construction and investment, the Kurdish region boasts new roads, well-connected international airports, five-star hotels, cafes, restaurants and large shopping malls. Southern Iraq is still perceived by many foreign companies as too risky for business investment, outside of the oil industry or large government infrastructure projects. Even in these industries, few companies allow international assignees. Most expatriates working in southern Iraq are based in nearby Dubai and fly in, staying on secure company campuses for three to four days a week.
Challenges in recruiting talent also vary significantly because of these different realities. Talent development happens much more quickly if training personnel are onsite. This is possible in Kurdistan but difficult in the rest of the country because of security issues and lack of infrastructure. Infrastructure for onsite staff training, while present in Kurdistan, is not as common in greater Iraq. As a result, most staff development for Iraqis in the south takes place internationally and requires much logistical and financial investment, whether in country or not.
In addition, many Kurds are now returning to Kurdistan from Europe, the U.S. and the Middle East to take advantage of their homeland’s growth opportunities. And they often bring back business acumen, language skills and global business practices, making for a high-value talent pool for international companies operating in Kurdistan. This is not yet a significant trend elsewhere in Iraq.
Common Challenges: Selecting and Developing Talent
The political instability of the region over several decades has resulted in a lack of qualified talent. Even qualified Iraqis were cut off from access to technical or soft-skills training in their respective fields. Companies embarking on new business in Iraq should not assume that qualified professionals will have the latest training. Rather, most companies find that they need to invest heavily in all forms of hard- and soft-skill development.
When recruiting talent in Iraq, organizations must always test qualifications gained from courses or training programs listed on candidates’ resumes, as these often connote different meanings. For example, sometimes expertise in an area might be associated with a two-day training course, whereas the same expertise in another country might be attained only through a master’s degree. Also, it is sometimes difficult for companies to identify good talent because, after years of a planned state economy, presentation skills or the ability to self-market is not well-developed in Iraq. Companies are advised to undertake an extensive interview process and hire candidates on a trial basis in order to identify the right talent.
Hiring within Iraq is based primarily on connections and networks; the priority for filling an open position is often to gain security for a family member or friend.
For corporations looking to do business in Iraq, an understanding of fasl (compensation) is critical. All companies will initially have to obtain a contract or agreement from the relevant government ministry to operate in Iraq or Iraqi Kurdistan. Additionally, for every company there will be an aspect of its business that encroaches on an area someone lays claim to, whether a tribe or a private owner. In the case where a company’s business uses tribal land to, say, build an office or lay a pipeline, the company will need to negotiate with the tribal leaders. According to the tribal code of fasl, the tribe will expect something in exchange for the company’s use of its land. This is true irrespective of whether the company has a national-level contract. Often this compensation comes in the form of job opportunities for tribe members. Because the tribes can and will sabotage a business they consider noncompliant, companies that do not negotiate according to the compensation rule may sustain significant losses. However, by speaking with the tribe and asking its members to be involved in the project (as builders, guards, etc.), managers can win their loyalty.
Apart from the many challenges, most companies note that the talent pool in Iraq shows an impressive level of resilience, often keeping systems working in unimaginably difficult situations. Iraqi culture also values education highly, and Iraqi workers are generally hungry to learn and develop after 30 years of turmoil.
It is crucial for Western multinational companies to remember that the skills their Iraqi counterparts bring will often be essential to the company’s success in Iraq. However, they will rarely be skills that multinationals normally target and use for recruiting. These include navigating complex hierarchies, tribal connections and bureaucratic structures to accomplish key tasks and leveraging the right relationships to keep a business afloat and to avoid crippling problems. While many Iraqis will need to develop key competencies to work in a multinational setting, companies will need to leverage these workers’ expertise to make their way in the local environment. Companies that recognize and value the unique talents of their Iraqi hires will be ahead of the game.
Key Skills Gaps: Training Focus for Iraqi and Kurdish Talent
Most companies entering Iraq have found that they need to invest heavily in training to prepare their employees to work in the context of an international organization. Because Iraq was previously a planned state economy and still retains many elements of this structure, key market-economy skills—such as sales, marketing, customer service, quality assurance, time management and performance management—are not strong. Moreover, Iraqi workers will lack many professional skills born out of Western management paradigms. Thus, companies wishing to operate according to Western management criteria will need to provide extensive training in work-style skills, including ownership and accountability, initiative, planning task to time, performance measurement and expectation-setting.
Iraq’s educational system has historically focused on instructor-led, top-down teaching and rote memorization. In addition, the country’s hierarchical leadership style is often expressed in a strict adherence to roles, wherein lines of authority and processes around decision-making are clear-cut. In this environment, if someone is not specifically authorized to do something or does not have clear instructions on what steps to take, he will often consider it outside his authority to take action. Skills such as critical thinking and problem-solving are often not rewarded in this work environment. As a result, there are skills gaps in key areas such as data analysis, critical thinking and proactive problem-solving. Companies, therefore, will need to make sure their employees develop these skills.
International standards of health and safety awareness and infrastructure are new to the Iraqi business culture, so training in and awareness about standards are generally required. This is sometimes difficult because a majority of Iraqis have faced—and in many cases continue to face—daily dangers of much greater significance than those found on any worksite.
While the Kurdish government is investing heavily in technological training within Iraqi Kurdistan, companies in Iraq will likely need to provide training for employees on computer skills such as PowerPoint and virtual communications technology. Significant training will also be required to develop professional presentation and communication skills, as these are typically not taught within the educational system.
Many organizations find that extensive training is required to create a customer-service mentality. The socialist economy and the lack of a service economy provide few models for excellence in customer service.
A short-term, survivalist mentality from the years of conflict and uncertainty in Iraq means that characteristics like quality and attention to detail were not valued or rewarded, frustrating companies that seek Iraqis to produce high-quality work.
Effective Training Methods
Training should focus on providing increased interaction, built-in comprehension checks, and frequent reviews and application of key concepts. Training that includes personal stories, incorporates emotions, and goes beyond facts or theories is usually highly effective in this environment. Participants are unlikely to indicate their lack of understanding, and so the onus is on the facilitator to confirm that students have absorbed the content.
Training will take longer because of the need for reviews, repetition of key concepts, translation and knowledge checks. Unless an organization is certain of the trainees’ language capabilities, all lessons should be in Kurdish or Arabic or involve a translator to help convey key concepts.
It is critical to ensure that training does not fall during Ramadan or other key Islamic holidays. Instructors should also take into consideration the need to break for prayer times.
Often the correct people are not sent to training. Because skills-development classes, especially international ones, are seen as a significant privilege, Iraqi managers will often treat them as a perk, rather than considering which workers will truly benefit from the experience. In many cases where there is a multipart training, different people will be sent to different parts of it, even though the learning is designed to be progressive for each individual. International training is also sometimes viewed as a holiday, so employees may choose to skip some of it in order to shop or go sightseeing.
It is often difficult for women to attend international professional development courses because of cultural restrictions on women traveling alone or with men who are not from their family. Managers need to ensure that women have a female travel companion from the office or that other safeguards are in place to ensure that female employees can take advantage of training opportunities.
While identifying and developing talent in Iraq and Iraqi Kurdistan present substantial obstacles, there is the potential for great rewards. Companies that choose to invest heavily in culturally appropriate training for their Iraqi managers, leaders and teams have seen great results.
Understanding and responding to the unique needs of the Iraqi talent market are key to success. Companies that go into the market must first gain this in-depth awareness and plan their talent strategy accordingly.