HR shapes equity incentives as Middle East employers compete for talent

HR leaders across the Gulf are playing an increasingly strategic role in shaping organisational performance and resilience, according to the latest reports on the region’s evolving HR agenda. The CEO of a consultancy which advises businesses on workforce strategy in the region has been speaking out on the issue to Consultancy-ME. In a focused interview, Mohammad Abu Al-Rob says employee experience is becoming a critical differentiator as businesses compete for scarce skills across the region and HR has a key strategic role to play. That view is shared more widely with several regional HR outlook reports including Mercer’s Global Talent Trends report and WTW’s regional rewards outlook which both point to HR leaders playing a bigger role in shaping workforce and reward strategy.
 
The reports mirror what we’re seeing across our own client base, with HR teams becoming more closely involved in reward design. For example, the rollout of equity-based incentives aimed at motivating and retaining key employees whilst also attracting new talent into the business. We’ll speak to a share plans expert who is advising clients on that issue.

In the interview, Abu Al-Rob explains that the HR landscape across the GCC is changing rapidly as organisations operate in a more complex environment shaped by economic diversification, demographic change, and growing competition for skilled workers. In his view, HR is no longer simply about policies and processes but about enabling strategy, growth, and long-term sustainability. He highlights employee experience as an increasingly important competitive differentiator as firms compete for scarce talent across the region. Organisations that stand out will be those that design meaningful, end-to-end employee journeys, from onboarding through career progression. 

To that end, an option that a number of firms in the region have been turning to is equity incentives, giving employees a stake in the company so they share in the future success of the business. 

So, let’s hear more about that. Earlier I caught up with share plans specialist James Sullivan-Tailyour, who joined me by video link to discuss equity incentives and how they can help. I began by asking what organisations should think about at the design stage to avoid problems later.

James Sullivan-Tailyour: “So I think firstly, it's thinking about where is the value that's going to be created in the shares. Is that a plan for a sale or a listing? How are we going to create value for employees and do we need to think about creating mechanisms for delivering value to employees earlier than a potential exit? I think the other thing to think about is how you're going to manage your shareholder relations and selling them the idea that they're going to suffer dilution in return for motivating their workforce. I think one of the other things that needs to be thought about carefully is what are the factors that drive and enhance performance? Is it purely share price growth or are we going to have particular KPIs and performance targets that are aligned to achieving this particular strategy, or this particular financial metric? Then the other thing to think about as well is how are you going to communicate this with employees, particularly if this arrangement is going to be offered to employees beyond the top cadre of senior executives. Getting your communication strategy right is a big part of the successful implementation of an equity-based incentive scheme.”

Joe Glavina: “What’s the scope of HR’s role in this context, James?”

James Sullivan-Tailyour: “I think a successful equity-based incentive scheme needs to have HR input from design all the way through to implementation. Whilst the design process may to a large part be led by legal and finance functions, it’s really important to have HR input to remind the lawyers and the accountants that the scheme needs to be simple, understandable, and deliver the right outcomes for employees and it's incentivising the right behaviours. So it's a three-way conversation between finance, legal and HR when you're designing a scheme and then, certainly, when you come to implement a scheme and roll it out to employees, having HR input to get the right language in place, to make sure that the messaging is really on point, and is not too complicated, not too legalistic, is absolutely essential.”

If you’d like help with introducing equity-based incentives into the Middle East, or help extending an existing share plan into the region, please do contact James – his details are there on the screen for you.

- Link to Consultancy-ME article