What’s the impact of wasta in the workplace?

In Arab society, the notion of networking reaches far beyond LinkedIn endorsements, and into what is known in Arabic as wasta. Variously translated as ‘pull’ or ‘sway’ and even nepotism, wasta is often about using social influence, sometimes undue, in order to obtain a scarce resource and/or to get something done, often seemingly impossible for others, quickly.

Once part of the fabric of Arab existence, since the discovery of oil and gas in the region and the expansive and rapid growth of countries such as Qatar, wasta has taken on a negative connotation, one that is not entirely undeserved as a synonym for nepotism and favouritism in the region’s majlises, boardrooms and businesses.

But it is a far more complex phemonenon that some locals are also quick to try to dispel. “Wasta means connection,” explains Khalifa Saleh Al Haroon, Qatari entrepreneur, for example. Best known from the web portal I Love Qatar, with its popular Mr Q ‘QTip’ webisodes, Al Haroon adds, “You create connections based on relationships. When you have a good relationship with someone they’re more likely to help out and support. Additionally, wasta isn’t something that’s unique to Qatar or the Middle East. It’s something that exists globally. We call it wasta, others call it clout.”

Wasta has become a pejorative term and at its worst arguably promotes what economists refer to as ‘rent-seeking behaviour’.

 

Moreover, fellow Qatari businessman Ali Al Humaidi refers to one of its original purposes, which was to enable these connections. “Wasta was never known in the ugly or shameful way it stands today,” Al Humaidi tells The Edge. “In fact, throughout the Arab and Bedouin history, the word and the act of mediation is a way of life to bring people together and to bring points of views closer. To this effect, whenever an Arab needed to approach someone they didn’t know, he/she would invite a mediator to soften the approach. In modern times, the old need for the mediation no longer exists but the practice itself, which is part of the heritage/culture and way of life that has continued, is used and applied in different circumstances.”

However, as Al Humaidi mentions, wasta has become a pejorative term. At its worst it arguably promotes what economists refer to as ‘rent-seeking behaviour’, where the connected few obtain a disproportionate share of the surplus economic gains afforded by the region’s vast fossil fuel reserves, not through innovation or productivity, but through, in part, whom they know.

Of course, wasta has a social function. In traditional societies, where family and tribal ties were critical in terms of establishing identity and trust, it served as a positive force for social cohesion. “In the absence of systems, processes and regulations,” continues Al Humaidi, “wasta is an alternative legitimate way for paving the way and making introductions or even asking for favours specially in a society and social structure that respect ties and relations, not forgetting Arabs’ tribal lifestyle in a very harsh desert environment needing to build alliances, and wasta become stronger in such social structure.”

Wasta can lead to some of the region’s key demographics – particularly women, youth and expatriates operating in the region’s workplaces – experiencing exclusion.

However, within the GCC’s rapidly growing and changing societies, unfortunately indiscriminate wasta can arguably lead to some of the region’s key demographics – particularly women, youth and expatriates operating in the region’s workplaces – experiencing a heightened sense of exclusion. The region’s workplaces are renowned for being uniquely broad in terms of their diversity, but they are noticeably less so in terms of
their inclusion.

 Elaine Gold, a management consultant who has been working in Qatar for eight years, agrees. “I have worked with a number of companies and individuals coming in ‘cold’ to Qatar,” she says, “and it is practically impossible to do business until you have spent at least six months building relationships, working out who really is the decision maker and then another six months pitching to the decision maker. In Qatar, who introduces you, who you have done business with in the past, and having a tried and tested product or service are most important. Anyone trying to market a new idea, innovation or prototype, finds it particularly hard to find an opening.”

As the region grapples with the natural friction between modernism and traditionalism, established social mechanisms such as wasta also have to compete with ‘alien’ imports like open markets and meritocracy. Especially in the workplace, wasta can cause significant challenges in perceptions of fairness, managing expectations, promoting productivity, and achieving greater levels of employee engagement.

Furthermore wasta, arguably, reduces the potential benefits of positive competition between talent inside organisations, such as ensuring that the most productive employees rise to the top. Any perception of the futility of this competition (caused by negative ideas of wasta) could negatively impact the effort, engagement and productivity of those employees – and, by extension, the performance of the organisation as a whole. Established elites then suffer from a long-term diminishment of international competiveness, while employees suffer from disengagement, frustration and – to borrow another word from colloquial Arabic – being ‘tufshan’: powerless and adrift.

The most concerning trend from an organisational perspective is the significantly lower level of employee engagement reported, as compared to the rest of the workforce. The Talent Enterprise’s research in employee engagement demonstrates that, on average, less than 50 percent of nationals are fully motivated and actively contributing to their jobs. This is generally pronounced among youth, with under-25s and 25- to 34-year-olds reporting alarmingly low levels of motivation. It is not difficult to imagine the impact of this on individual performance and organisational productivity.

 

Women in the workplace

Traditionally excluded from the male-dominated wasta nexus, the region’s females currently report lower levels of employee engagement (50 percent) compared to their male counterparts (57 percent). One of the main reasons cited for this is a perceived lack of fairness at work. This is most visibly evident in the unequal distribution of pay and benefits

Even though many employers would claim to have equal pay and benefits from a philosophical point of view, the reality is quite stark. According to World Economic Forum (WEF) estimates, the pay gap between men and women in the Middle East and North Africa (MENA) region ranges from 20 to 40 percent.

Another area where women in the region are at a considerable disadvantage is in their relative lack of access to networking, both formal and informal, during and after work. The power of these networks to strengthen business relationships is often underestimated; many critical decisions are made, largely by male peers, during informal shisha sessions. This is potentially when the male-dominated wasta is most active, with absent females losing out. 

These issues are not unique to the Arab world. A global study found that, on average, men found it easier to use informal means to persuade a senior colleague to back their development, whereas women benefit more from structured help because they are generally more reluctant to promote themselves and less inclined to socialise during and after work.

 

Youth and unemployment

Youth unemployment rates within the broader MENA region are the highest globally. A 2015 WEF report puts jobless rates amongst youth under 25 at 27.2 percent in the Middle East and 29 percent in North Africa. Combine this with some of the more negative effects of wasta, and the impact is particularly damaging for long-term productivity and efficiency.

Uniquely for the region, education has an unexpected effect on predicting joblessness. If job seekers have been to college, their likelihood of being unemployed almost doubles, whereas in most other countries and regions in the world, graduates have a significantly higher chance of being employed. Clearly more research is required, but this indicates that the region’s labour markets are not sufficiently efficient, and suggests that outcomes are determined by other, non-economic, exogenous factors – including, it must be argued, wasta. One of the first barriers faced by youth is at their entry into the formal labour market. A recent survey by The Talent Enterprise found that students’ main source of finding a job was through their friends, family and connections – and not through their college placement counsellors or by establishing contact with employers directly. 

 

Wasta arguably reduces the potential benefits of positive competition inside organisations, such as ensuring that the most productive employees rise to the top.

 

This research is supported by findings from the Brookings Doha Center, which revealed that major obstacles identified to gaining labour market access. These included: “lack of awareness of how to job-search, connecting with employers and access to career advice; needing connections or wasta to get a job. Many students said that despite their willingness to go through open competition to find employment, they found it difficult to actually find a job by responding to job vacancies or through sending out resumes to potential employers”.

This is further substantiated by Gallup, which found in 2009 that “the perception that jobs are only given to people who have connections (wasta) is not dominant in any one region, but youth in Bahrain (32 percent) are among the most likely to mention this. When asked separately whether knowing people in high positions is critical to getting a job, majority of youth in every country surveyed agreed.”

If or when youth find a job, they then have to navigate the complex world of career progression. Ostensibly, wasta promotes a patriarchal approach to work, where family names and personal relationships trump meritocracy. Ambitious and career-oriented youth can find this wasta frustrating. Moreover, over the next decade, the local workforce in our region is expected to become progressively younger and according to the Arab Social Media Report 2013, younger people in the GCC display some of the highest level of social media penetration in the world – indicating an alternative approach to networking, compared to the older generation’s.

Indeed, overall, the Talent Enterprise research indicates that when wasta impedes the youth’s access to jobs or progression within their careers, this leads to an overall lowering of engagement, optimism and
life satisfaction.

 

Expatriate relationships

The term ‘expatriate’ is an anachronistic misnomer. It implies a unified social group with a common identity and shared interests. The reality is a broad spectrum of workers, ranging from construction labourers and domestic workers to globally mobile executives, technicians and entrepreneurs. Occupying the highest echelons of international expatriation affords high earnings, low taxes and the opportunity to work closely with local elites and develop an individual wasta network.

Yet, many of the region’s expatriates who contemplate a return home earlier than planned (‘expat flight’), struggle with navigating the unknowns within their organisational cultures, and cite a general lack of transparency and meritocracy, even in the private sector. Some reference the strength of personal relationships, where loyalty trumps performance as a factor and so directly or indirectly, the legacy of wasta in the workplace continues to be a hindrance, especially for newcomers.     

Even when those expatriates stay, there still may be significant productivity issues, with overall labour productivity at low levels within the region compared to most international benchmarks. Also, expatriates are often employed for their technical capability and experience, regardless of their position in the management hierarchy. This has a significant impact on the quality of leadership and the ability and willingness to coach and mentor national staff amongst expatriate managers. This is a critically important barrier to overcome if the region’s labour markets are to become more sustainable in the future.

The region’s already-segmented labour market is further characterised by the largely transactional nature of working relationships between nationals and expatriates, or sponsors and employees. While this can be attributed to the impermanence of employment and a lack of long-term residency prospects, wasta must sometimes impact the expatriate’s sense of personal ownership, investment and accountability as decision-makers and business leaders.

 

The way forward

The most concerning trend from an organisational perspective is the significantly lower level of employee engagement reported by national talent in the region. On average, only one of every two nationals is fully motivated and actively contributing. It is not difficult to imagine the impact of this on individual performance and organisational productivity. A generally lower participation in the workforce, combined with lower morale among GCC nationals in general, creates a cycle of continued reliance on expatriates, particularly in truly commercial organisations. Says Gold: “In any country people want to do business with people that they know, like and trust. The difficulty here with wasta is that you may not get the opportunity to develop that potentially mutually beneficial relationship.”

The good news is that even incremental shifts in the level of engagement will have a disproportionately positive impact on key indicators such as performance and productivity. Indeed, the persistence of wasta in the workplace is inconsistent with the stated commercial modernisation philosophy of most GCC nations, all of which are members of the International Labour Organization (ILO) and are signatories to the Declaration on Fundamental Principles and Rights at Work.

Yet these formal commitments to international labour standards are not necessarily always reflected in the practical experience of business within the region. The expectation is one of a traditional society based on social norms and cultural doctrines, yet combined with a modern, global economy. This is a fundamental tension in the region’s model of government-directed development. The operation of wasta in the workplace represents a major facet of this dichotomy between the traditional and
the modern.

So is wasta – at least, in its current form – approaching the end of its existence? Of course, relationships, networks and reciprocal obligations will remain, as they do in any working culture. But people policies are changing rapidly across the GCC and companies that embrace standards of diversity, development and inclusion will prevail in the continuing war for talent. “It is becoming more possible to do business in Qatar without wasta,” furthers Ali Al Humaidi, “as rules for doing business have started to take reliability, quality and cost into account and they are no longer traded for good deeds between friends and relatives.”

Indeed, as rent-seeking behaviour requires the existence of economic rent and higher wages in order to persist, as the economies of the region diversify into knowledge-based economies, international competitiveness and productivity will become ever more important, as local workers compete with workers from across the world.”