[rh] Career Exploration and Perceived Employability

Career Exploration and Perceived Employability Within an Emerging Economy Context

Ingo Forstenlechner, Hassan Selim, Yehuda Baruch, and Mohamed Madi

As accepted to Human Resource Management (US)Abstract

Following four decades of unprecedented economic, social, and cultural change, the United Arab Emirates labor market is highly segmented: The native population is almost exclusively employed in the government sector, while the private sector is effectively outsourced to foreigners. This has created an unsustainable situation with growing numbers of young citizens reaching working age and with a public sector that has reached the saturation point. Policymakers repeatedly try to legislate to encourage private-sector employers to hire citizens. These policies have had limited success. We explored the career attitudes of 2,267 United Arab Emirates citizens prior to their entry into the labor market. Using structural equation modeling, we found that the social contract and resulting expectations toward state employment have strong implications for willingness to work in the private sector.

Keywords: Arab Gulf labor markets, career theory, social contract, employability, structural equation modeling

Introduction

In this article, we employ contemporary career concepts in the cultural context of the Arab

Gulf to evaluate willingness and interest to include the private sector as a possible target when

seeking employment. We do so within Fishbein and Ajzen’s (1975) behavioral approach model;

assuming that the general culture of contemporary Gulf society has a strong impact on such

willingness. The Arab Gulf is an interesting and relevant environment in which to apply

contemporary career concepts. It is a rapidly changing society, where up until very recently,

citizens were all but guaranteed overpaid and under-demanding public-sector employment as part

of the dominant social contract (Forstenlechner & Rutledge, 2010). This has created a labor

market highly segmented along lines of nationality, with earning potential largely predictable by

nationality (Abdalla, Al Waqfi, Harb, Hijazi, & Zoubeidi, 2010) and a private sector effectively

outsourced to foreigners. More recently, however, demographic pressures, the increasing share of

the budget going into public-sector salaries and rapid transformation of wider society is

challenging the transfer mechanism of public-sector employment: Both UAE and Qatar doubled

their populations; mostly through migration, taking five years and one, respectively

(Forstenlechner & Rutledge, 2011). The three largest expatriate labor markets (Saudi Arabia,

Qatar, and the UAE) rank among the 10 most desired destinations for globally mobile

professionals in a recent expatriate survey (HSBC, 2012), when ranked by earning potential and

career impact.

In many ways, this inward labor migration has further worsened labor market

segmentation, not least by creating a need for more public-sector jobs to manage the inflow

(Forstenlechner & Rutledge, 2011), but also by further putting downward pressure on wage levels

in the private sector. Understanding this segmentation, and its sociocultural implications, is

important for multinational firms (Forstenlechner & Mellahi, 2011; Harry, 2007). Multinational

corporations in the Arab Gulf are under increasing pressure to support job-localization efforts. One

example is the successful bid of a South Korean consortium for the biggest nuclear power deal to

date in the Middle East (Stanton, 2009): The consortium won against stiff American and French

competition. Their bid had a very well-developed plan for training and incorporating Emiratis at

all stages and all levels, a workforce nationalization that was instrumental for the outcome.

In this study we aim to explore what drives career choices under these very particular

circumstances. We do so by introducing a causal structural research model in an attempt to explore

these relationships among the critical factors that influence people entering a saturated labor

market to choose alternative paths. Our study deals with the willingness of young, educated

Emiratis to work in the private sector. The proposed research model attempts to answer the

following questions:

In this study we aim to explore what drives career choices under these very particular circumstances.

What are the effects of a person’s self-perceived employability, self-efficacy, career

exploration, and his/her expectations toward state employment on his/her willingness to

work in the private sector?

How are expectations toward state employment and self-perceived employability affected

by career exploration and self-efficacy?

Is self-efficacy affected by career exploration?

There has been little research that has examined the effects of career attitudes and their

relevance in non-Western, collective societies. A key practical contribution of this study lies in

offering decision makers at both organizational and governmental levels ideas and advice about

encouraging people to widen their employment perspectives. Such action would help the national

economy to avoid the dual hazard of unemployment and underemployment, keep key roles in the

economy within the influence of citizens, and decrease the necessity for policymakers to intervene

through regulation. Our study contributes to the literature by demonstrating the relevance of

applying contemporary career and work attitudes in a collectivist society. It also evaluates

intentions to explore private-sector career opportunities; not a natural choice for Arab Gulf

citizens. The study also examines the effects of local culture and the social contract on this

intention. It thereby adds to knowledge about factors relevant to transitional labor markets.

A key practical contribution of this study lies in offering decision makers at both

organizational and governmental levels ideas and advice about encouraging people to widen their

employment perspectives.

We proceed as follows. First, we set the context in terms of national labor markets and

individual careers, including the relevance of contemporary career attitudes to the desirability of

private-sector jobs. We develop a set of hypotheses relating to career attitudes and perceptions and

utilize quantitative methodology to test these. Lastly we present the empirical results and a

discussion of the theoretical, practical, and managerial implications of this study to both Arab Gulf

and other relevant labor markets.

The Context

Much of the previous work on job localization in the Arab Gulf has been either conceptual

(Forstenlechner & Rutledge, 2010) or has focused on certain aspects of labor-market challenges;

from the legislative context (Mellahi, 2007), the economic framework (Chemingui & Roe, 2008;

Toledo, 2006), HRM strategy (Rees, Mamman, & Bin Braik, 2007), or the barriers perceived by

employers (Al Ali, 2008). Little has focused on career choices of young entrants to the labor

market. Recent work illustrates the importance of considering contextual factors when studying

career orientations and attitudes (Segers, Inceoglu, Vloeberghs, Bartram, & Henderickx, 2008).

This makes Arab Gulf states an interesting field of research. They have experienced rapid

development from close-knit, traditional, tribal societies into new, national societies that are

“heterogeneous, multinational, multi-religious, and anonymous” (Heard-Bey, 1996, p. 2), while

the core of their indigenous populations, however, remains somewhat tribal.

The social contract was redefined to include a strong social welfare net that included easy

access to overpaid public-sector jobs, thus allowing new forms of wealth distribution with full

maintenance of power structures (Davidson, 2009b; Mellahi, 2007). It has led to local citizens

limiting their career expectations (CEs) almost exclusively to the public sector.

However, as growing numbers of young citizens enter the workforce every year, the public

sector can no longer automatically employ all of them (Al Ali, 2008), and a shift in the social

contract is inevitable. The citizenry, though, has developed a sense of entitlement (Al Gergawi,

2008) that may no longer be obtainable for all. This realization might be difficult from the one

generation lead to a strong desire to reproduce the same environment for the next.

Emiratis only form a minority of the workforce in both the public and the private sector, at

27.4 percent and 1.3 percent, respectively (Forstenlechner & Rutledge, 2010). Professionalization

of the public sector, a recent trend toward privatization by outsourcing, and budget limitations

make the public sector less likely to accommodate the employment aspirations of young citizens.

Professionalization of the public sector, a recent trend toward privatization by outsourcing,

and budget limitations make the public sector less likely to accommodate the employment

aspirations of young citizens.

The career context in Arab Gulf states is that of individual members of collectivist

minority groups of indigenous citizens in rapidly changing societies, where different career-related

attitudes and behaviors are dominant (Ituma & Simpson, 2007). New career attitudes in

collectivist societies were tested empirically (Park, 2009) and found relevant to this environment.

A decade ago, Mellahi and Al Hinai (2000) posed the question whether local workers were

an asset or a liability in Gulf economies and up until now, research has still cautioned as to their

impact on efficiency (Al Qudsi, 2006; Forstenlechner & Mellahi, 2011; Harry, 2007). The only

tangible incentive to employ citizens that employers reported is goodwill from the government,

leading to advantages when bidding for contracts or when dealing with the bureaucracy

(Forstenlechner & Mellahi, 2011).

Hypotheses Development

In order to develop our hypotheses, we followed established and widely applied

contemporary career concepts (Arthur, 2008; Sullivan & Baruch, 2009) and those of self-efficacy

(Bandura, 1977) and employability (Ghoshal, Bartlett, & Moran, 1999). Our integrative research

model, which we call the Career Attitudes and Perceptions Model (CAPM), pays particular

attention to the potentially different psychological bases for each factor, and accordingly develops

hypotheses on the effects of those factors within the specific social context (see Figure 1).

Willingness to Work in the Private Sector (WWPS)

A bleak picture is presented by most studies on the future of the labor markets in the Arab

Gulf. A policy modeling exercise for Kuwait (Chemingui & Roe, 2008) suggests that the aim to

increase the capacity of the private sector to employ all Kuwaitis seeking employment until 2015

is unlikely to be successful.

To attract citizens to work in the private sector would require both significant structural

changes (Forstenlechner & Rutledge, 2010; Mellahi, 2007) and marketing the private sector to

citizens as a potentially appealing employer. Until now, both local and private-sector employers

have been functioning as distinct labor markets and have developed stereotypes and a certain

mutual dislike (Al Waqfi & Forstenlechner, 2011).

Additionally, success hinges on changing the career attitudes of citizens. The current

system offers few incentives to seek employment outside the public sector because the conditions

of employment are significantly worse in the private sector (Al Ali, 2008; Godwin, 2006; Grant,

Golawala, & McKechnie, 2007). Citizens would have to compete against expatriates who are

willing to work at significantly lower salaries and under poor legal protection (Alserhan,

Forstenlechner, & Al-Nakeeb, 2010). This preference is further exacerbated by what the younger

generation has learned from the career concepts and successes of their parents’ generation

(Bandura, 1977). The conditions in the public sector reinforce this tendency (Mitchell, Jones, &

Krumboltz, 1979). As a result, local citizens often prefer to wait for a government job than take a

private-sector job even if the wait might last years (Shaban, Assaad, & Al Qudsi, 1995).

In the first 35 years of this country’s 40-year existence, public-sector job growth absorbed

the supply of new entrants. Convincing citizens that the situation has changed has proven difficult.

According to bounded rationality theory (Simon, 1972), younger generations have a higher

tendency to adopt contemporary career attitudes (Segers et al., 2008; Sullivan & Arthur, 2006).

We therefore posit that willingness to work in the private sector is impacted by a variety of career-

related attitudes and behaviors such as expectations toward state employment, career exploration,

self-efficacy, and self-perceived employability, each of which will be outlined in the following

sections.

Expectations Toward State Employment (ESE)

The social contract, which was forged in the beginning of the oil era (Partrick, 2009), when

indigenous populations were small, is unlikely to be sustainable. Benefits for citizens across Arab

Gulf countries include free education, medical care, and housing assistance. Beyond these,

arrangements differ from country to country, from stipends for marrying other citizens to loans

that are written off gradually as children are born (Rashad, Osman, & Roudi-Fahimi, 2005).

However, one of the most important aspects of the social contract has always been public-sector

employment. It was a kind of psychological contract at the national level: a promise for jobs that

paid well above market rates and demanded well below private-sector qualifications and

performance (Godwin, 2006; Mellahi, 2007). This promise of social and economic security created

by ample job opportunities in the public sector seemed a reasonable measure to secure political

acquiescence among citizens.

SET AS CALLOUT, IF NECESSARY: One of the most important aspects of the social contract has always been public-sector employment. It was a kind of psychological contract

at the national level: a promise for jobs that paid well above market rates and demanded well below private-sector qualifications and performance.

Demographic development makes this aspect of the ruling bargain unsustainable, as only a

limited number of jobs is ever likely to be available in government departments, oil companies, or

investment vehicles (Davidson, 2009a). Across Arab Gulf countries, public-sector wages already

represent a considerable strain on the budget. In Kuwait, for example, government wages already

exceed 14.7 percent of GDP (Economist Intelligence Unit, 2010), and are currently 40 percent of

the budget in Saudi Arabia (Knickmeyer, 2011).

Nevertheless, citizens continue to expect careers that are comparable to those previously

experienced (Bandura, 1977). As a result, the preference for public-sector employment remains

strong, even if opportunities are not there. According to Gallup (2009), two-thirds of citizens aged

15–29 display such preferences. Half of them discount the private sector as an option or see it

merely as a temporary solution. (Al Waqfi & Forstenlechner, 2011; Shaban et al., 1995). As a

result, we hypothesized:

Hypothesis 1: A high level of expectations toward state employment is negatively related to

the willingness of young citizens to work in the private sector.

Career Exploration (CE)

Originally suggested by Jordaan (1963) and further refined by Stumpf, Colarelli, and

Hartmann (1983), career exploration is defined as the self-appraisal and external activities that

provide individuals with information that fosters progress in the selection of, entry into, and

adjustment to an occupation (Blustein, 1989). During the process of career exploration, individuals

aim to collect and analyze career-related information in order to improve future career outcomes

(Werbel, 2000).

There is a growing consensus that early career exploration positively influences the work

readiness and willingness of young citizens to work in both the private and public sectors

(Downing & Nauta, 2010). We aim to explore possible relationships between early career

exploration and other concepts of career theory. Governments have obvious opportunities through

educational stages to help individuals gain an understanding of career options and opportunities.

Self-assessment frameworks are but one example of such help. The process is considered a

lifelong one; focusing on an appraisal of an individual’s internal attributes and an understanding of

options within the immediate relational, cultural, and historical contexts (Cheung & Arnold, 2010;

Flum & Blustein, 2000).

SET AS CALLOUT, IF NECESSARY: Governments have obvious opportunities through educational stages to help individuals gain an understanding of career options and opportunities. Self-assessment frameworks are but one example of such help.

Low levels of career exploration are exacerbated by many job categories being unknown to

citizens. The vast majority in their social network are working directly for the government. Many

more jobs are considered inappropriate or culturally unacceptable (Mellahi, 2007), thus denying

citizens access to indigenous role models in nontraditional careers (Davidson, 2009b). The

resulting “curse of entitlement”—as Al Gergawi (2008) calls it—further impacts the perceived

need to explore unusual options. Such entitlement even extends to very specific job categories. For

example, the regulatory push to nationalize positions in HR led to a significant increase in students

graduating in this field. Additionally, as the type of work, sector of employment, and social

interactions within it determine the social status of the job holder in Arab Gulf countries, many

entry-level jobs are unattractive to job seekers (Lindsay, 2005), to a larger extent than in other

cultures (Mellahi, 2007). We thus hypothesize:

Hypothesis 2: Increased career exploration will be positively associated with willingness

to work in the private sector.

and

Hypothesis 3: Increased career exploration will be positively associated with expectations

toward state employment.

Awareness of the labor market and knowledge of career options and availabilities increases

a person’s self-belief (Higgins, 2005). Knowing the availability of options in the labor market is

essential for adaptability. Proactive people will get engaged in the labor market, and feel in

control, leading to optimism, further information seeking, and strong career self-efficacy

(McArdle, Waters, Briscoe, & Hall, 2007). Accordingly, the following hypothesis is introduced:

Hypothesis 4: An increase in knowledge about careers will be positively associated with

stronger self-efficacy.

Career exploration builds on self-initiated, self‐management of a career; including

development of lifelong career competence and enhanced employability (Bridgstock, 2009).

Proactive careerists have better career success (Arthur, Inkson, & Pringle, 1999; Seibert, Kraimer,

& Crant, 2001), leading to higher levels of employability (Baruch, 2004; Ghoshal et al., 1999). We

thus hypothesized:

Hypothesis 5: Career exploration will be positively associated with levels of self-perceived

employability.

Self-Efficacy (SE)

Bandura (1977) defines self-efficacy as one’s belief in one’s capability to perform a

specific task. This belief arises from the gradual acquisition of complex cognitive, social,

linguistic, and/or physical skills through experience (Bandura, 1977). Existing research shows that

self-efficacy has been associated with a variety of career-relevant attitudes and expectations

(Abele & Spurk, 2009). These include the choice of action, the effort to be invested in the action,

and the thoughts supporting or hindering an action (Judge, Erez, Bono, & Thoresen, 2003; Wood

& Bandura, 1989). Studies show self-efficacy has a positive impact on job performance (Judge &

Bono, 2001), job satisfaction, and organizational commitment (Luthans, Zhu, & Avolio, 2006).

Self-efficacy affects one’s choice of settings and activities, skill acquisition, effort expenditure,

and the initiation and persistence of coping efforts in the face of obstacles (Bandura, 1977).

Young citizens, when deciding to participate in public- and private-sector labor markets,

weigh, integrate, and evaluate information about their skills, competencies, and attitudes. They

then regulate their choices and efforts accordingly (Bandura, 1981). In the Gulf labor market,

strong negative stereotypes about citizens’ limited efficacy are held by members of the non-

national group and internalized by citizens, creating a negative self-stereotype profile (Al Waqfi &

Forstenlechner, 2011). Young citizens perceive high employability requirements in the private

sectors as psycho-social barriers leading to poor self-efficacy. This affects both their employability

choices and their willingness to work in the private sector. In the public sector, they gain

institutional, cultural, and structural advantages such as public support for nationalization, Wasta

(using connections or influence—see Hutchings & Weir, 2006), and generous economic benefits

compared with the private sector. These psycho-socioeconomic advantages lead to positively

perceived self-efficacy, which in turn affects young citizens’ willingness and expectations to work

in the public sector. Such expectations can be traced, at the micro level, to the nationalization of

the function of HR manager, which led to an increased enrollment in HRM majors. Accordingly,

the following hypotheses are proposed:

Young citizens perceive high employability requirements in the private sectors as psycho-

social barriers leading to poor self-efficacy. This affects both their employability choices and their

willingness to work in the private sector.

Hypothesis 6: Increased levels of self-efficacy will have a positive relationship with self-

perceived employability.

Hypothesis 7: Higher levels of self-efficacy will be positively associated with an increase

of willingness to work in the private sector.

Hypothesis 8: Self-efficacy will be positively associated with a high level of expectations

toward state employment.

Self-Perceived Employability (SPE)

Employability is the ability to acquire a job when/if needed (Baruch, 2001). It comprises

three separate, yet interrelated, dimensions: (1) adaptability, (2) career identity, and (3) human and

social capital (McArdle, Waters, Briscoe, & Hall, 2007). Self-perceived employability (Ghoshal et

al., 1999) refers to the perceived ability to obtain, perform, and maintain a job. SPE has been

found to be a robust measure across cultures (Rothwell, Jewell, & Hardie, 2009) and has more

recently been shown to relate positively to self-determination (Parker, Jimmieson, & Amiot,

2010).

Self-determination refers to the combination of skills, knowledge, and beliefs that enable

individuals to make decisions and reevaluate past solutions; to generate new solutions if needed,

and choose the best option to engage in goal-directed self-regulated behavior (Martin & Marshall,

1995). This study argues that the limited development of self-determination among young citizens

contributes to perceived job insecurity and thus affects employability choices.

We argue that young citizens develop a gradual negative self-stereotype about the

cognitive, social, linguistic, and/or physical capabilities required to compete in the private sector

against a virtually unlimited supply of foreign workers. Those highly skilled foreigners are

perceived as more productive and willing to work for significantly lower salaries. These psycho-

socioeconomic disadvantages lead to perceived high job insecurity and limited self-determination,

and to a negative self-perceived employability among young citizens and thus an unwillingness to

work in the private sector (Al Waqfi & Forstenlechner, 2011). These thoughts lead to our final

hypothesis:

We argue that young citizens develop a gradual negative self-stereotype about the

cognitive, social, linguistic, and/or physical capabilities required to compete in the private sector

against a virtually unlimited supply of foreign workers.

Hypothesis 9: High self-perceived employability will be positively associated with a high

level of willingness to consider work in the private sector.

MethodProcedure and Sample

Six higher education institutions in United Arab Emirates, which cover the vast majority of

Emiratis currently enrolled in higher education, agreed to participate in the study. An online

survey was made available to participants for a month. A total of 3,675 records were found in the

database, and after removing incomplete records, 2,267 records were found to be complete and

were therefore used for the data analysis.

Respondents’ age ranged from 17 to 31 years, with an average of 22 years (SD = 2.46).

Male respondents represented 17.9 percent of the 2,267 usable records. This is not surprising, as

they represent only 19 percent of students enrolled in higher education nationally (Al Shamsi, Al

Sheik, Bassioni, & Rutledge, 2009). This figure is due to low perceived returns on education

among men (Abdulla & Ridge, 2011). Participants represented more than 12 majors, and 88

percent of the participants were single. Bachelor-degree holders represented 62.9 percent, 20.2

percent were diploma holders, and 15.2 percent were higher diploma holders. Public school

graduates represented 91.6 percent, and 8.4 percent graduated from private schools. Students

whose fathers had higher than a diploma represented 72.3 percent of the respondents, while those

with mothers having higher than a diploma represented 82.2 percent. Both figures are above the

national average, thereby indicating a strong link between parents’ education and offspring’s

educational attainment.

Instrument Development

Individual measurement items were identified and adjusted from existing literature on each

hypothesized construct. Published measurement items were reworded and modified in several

meetings among the authors. We opted for measures that have been employed in various studies

and in different countries and cultures. Most of the rewording was to make the measurement items

fit the UAE. A pilot study was conducted to ensure suitability of the questionnaire in both English

and Arabic. The pilot study and the final questionnaire were translated from English to Arabic and

back by separate translators in order to ensure consistency, following Brislin’s (1970) procedure.

The 32 measurement items (shown in Appendix A) employed a five-point Likert scale with the

endpoints of strongly agree (5) and strongly disagree (1).

CE was measured using six items adopted from Lokan (1984). SE was measured using six

items by Sherer et al. (1982). SPE was measured using six items by Rothwell et al. (2009).

Two further factors were pretested and self-created. These are the seven items testing the

WWPS, as well as the six items testing ESE. They were based on literature (Al-Kibsi, Benkert, &

Schubert, 2007; De Boer & Turner, 2008; Rees et al., 2007) and adapted to the local context. Both

were very clearly worded, and all questions were based on published research.

Analysis

The analysis is based on structural equation modeling (SEM). SEM is a multivariate

statistical analysis method used in measuring the underlying latent constructs identified by factor

analysis and assessing the paths of the hypothesized relationships between the constructs (Hair,

Black, Babin, Anderson, & Tatham, 2006; Nusair & Hua, 2010). SEM analysis, as applied to this

study, is conducted using four phases: (1) the instrument in the form of measurement items is

developed to capture the CAPM constructs, (2) the instrument is then validated using exploratory

factor analysis (EFA), (3) confirmatory factor analysis (CFA) is used to assess the

unidimensionality of CAPM constructs and measure the adequacy of the measurement models

associated with each construct, and (4) CAPM is tested and validated using SEM.

Exploratory Factor Analysis

Construct unidimensionality is the existence of a single latent construct that underlies a set

of measurement items that can be accounted for by a single, common factor (Anderson, Gerbing,

& Hunter, 1987; Smith, Karwan, & Markland, 2009). Exploratory factor analysis (EFA) was

conducted to test for unidimensionality and to assess the instrument’s reliability. EFA was

implemented using LISREL version 8.8 with the full set of 32 measurement items as input. The

polychoric correlation and asymptotic covariance matrices were developed and used in generating

the factor loadings because all the considered measurement items were represented by ordinal

variables (Jöreskog, Sörbom, du Toit, & du Toit, 2000). Factor loadings can be identified using

one of two rotation methods—namely, the orthogonal rotation method (Varimax) or oblique

rotation method (Promax). Oblique rotation method was used because the ultimate goal in this

study was to obtain and validate several theoretically meaningful constructs, and it was assumed

that the constructs are correlated (Hair et al., 2006). Table I shows the output results for the

Promax-rotated factor loadings. Items intended to measure the same construct must demonstrate a

factor loading of > 0.40 (Hair et al., 2006).

The EFA was applied to the six items (SPE1–SPE7) used in measuring the SPE and

resulted in having all items’ correlation values (loadings) with the SPE construct greater than 0.40,

except SPE3 and SPE7 which had loadings less than 0.30 and had to be eliminated from further

analysis. The WWPS construct was measured by seven items, all of which were loaded with

correlation values greater than 0.50, except WWPS3 and WWPS4, which had loadings less than

0.30 and were excluded from any further analysis. The ESE construct was measured using six

items; all of them had factor loadings greater than 0.40. This testifies to the validity of the items to

capture the ESE construct. The CE construct was measured by six items; all of them had factor

loading values less than 0.40 except CE5 and CE6, which had loadings greater than 0.6. The SE

construct was measured by six items, only four items showed loadings greater than 0.5, and SE1

and SE6 had loadings less than 0.40 and were excluded from the analysis. Finally, it can be

concluded that the remaining 22 measurement items have truly represented the proposed

constructs. The five identified constructs formed the career attitudes and perceptions model, as

shown in Figure 1.

As defined by Podsakoff and Organ (1986) and Chang, van Witteloostuijn, and Eden

(2010), common method variance (CMV) is a variance that is attributed to the measurement

method rather than the constructs of interest and may cause a systematic measurement error and

further bias the estimates of the true relationships among theoretical constructs. Method variance

can either inflate or deflate observed relationships between constructs, thus leading to both Type I

and Type II errors. CMV arises from common respondents, common measurement context,

common item context, and characteristics of the measurement items (Podsakoff, MacKenzie, Lee,

& Podsakoff, 2003). Due to the nature of this study, it was not possible to rule out CMV. To test

for it, we employed the Harman’s single-factor test, which is a widely used approach for assessing

CMV in a single-method research design (Podsakoff & Organ, 1986, Podsakoff et al., 2003,

Malhotra, Kim, & Patil, 2006). In this test, all of the measurement items in a study are subject to

EFA. Then, CMV is assumed to exist if: (1) a single factor emerges from unrotated factor

solutions or (2) a first factor explains the majority of the variance in the variables (Podsakoff &

Organ, 1986). All 22 measurement items were loaded on one factor and the unrotated factor

solution was examined. Ten measurement items had loadings below 0.40, four items had loadings

above 0.50, and the eight items left had loadings between 0.40 and 0.50. These results showed that

only four measurement items had loadings above 0.5 and the other 18 items did not load on the

same factor. Principal component analysis without rotation revealed five distinct factors. It was

clear that more than one factor emerged from the unrotated factor solution, and the first factor

explained only 19.07 percent of the variance in the 22 items. This reasonably assured that CMV

was not a major source of variations in the measurement items, and the data did not indicate

evidence of common method bias.

Table II shows correlation values and Cronbach’s alpha values (in parentheses on the

diagonal) for the five constructs emerged from the exploratory factor analysis. All constructs

exhibited a reasonable degree of internal consistency, as the Cronbach’s alpha values were ≥ 0.69.

It was concluded that the measurement items could be used to measure the constructs with

acceptable reliability.

Confirmatory Factor Analysis: Measurement Model

CFA is a theory-testing approach as opposed to a theory-generating method like EFA. In

CFA, the number of constructs that exist within a set of measurement items and that construct each

item will load highly on must be specified by the researcher (Hair et al., 2006). CFA statistics

reveal how the proposed constructs match the actual data. CFA can lead to confirmation or

rejection of the preconceived theory.

CFA is another alternative that can be used in implementing Harman’s single-factor test for

assessing CMV. In this approach, all measurement items are modeled as the indicators of a single

factor that represents common method effects. Method biases are assumed to be substantial if the

hypothesized measurement model fits the data (Malhotra et al., 2006). Harman’s single-factor test

was performed via CFA by specifying a hypothesized common method factor as an underlying

driver of all 22 measurement items. The results revealed that the fit of the single-factor model was

unsatisfactory, indicating that CMV is not the major concern. Additionally, another test was

conducted that is one of the approaches suggested by Podsakoff et al. (2003). This approach

involves adding a first-order factor to the SEM model with all the measurement items as

indicators. The common method variance factor was added to the research model, and the results

indicated that there were no substantive differences in statistical results.1

The CAPM measurement model, shown in Figure 1, was tested using LISREL 8.8. The

measurement model does not include any causal relationships among the constructs. Table III

shows the mean and standard deviation values of all the measurement items. It shows the results of

testing CAPM measurement model in the last two columns. All the 22 measurement items were

significantly related to their associated constructs because all t-values exceeded the critical value

at the 0.05 level of significance of 1.96. The measurement items’ standard loadings were all

greater than or equal to 0.5.

The average variance extracted (AVE) reveals the overall amount of variance in the

measurement items accounted for by the underlying construct and is used to assess convergent

validity (Chau & Lai, 2003; Fornell & Larcker, 1981; Hair et al., 2006). As indicated by Fornell

and Larcker (1981), the AVE is more conservative than the Cronbach’s alpha and its accepted

value is 0.50 or above. To assess the discriminant validity, the square root of the AVE for each

construct must be greater than the correlations between the construct and all other constructs in the

study. Table II shows the square root of the AVE on the diagonal, which satisfied the discriminant

validity condition. This showed no problem with the discriminant validity of CAPM.

The goodness-of-fit measures were used to assess the overall model fit. As indicated in

Table IV, all fit indices were acceptable and indicated a good fit. For the root mean square error of

approximation (RMSEA), a value of 0.08 or below represents a reasonable error of approximation.

The measurement model’s value was 0.051. The root mean square residual (RMR) was 0.077,

which satisfied the acceptable value of less than or equal 0.10. Goodness of Fit Index (GFI),

Adjusted GFI (AGFI), Normed Fit Index (NFI), Non-Normed Fit Index (NNFI), and Comparative

Fit Index (CFI) should all be greater than or equal to 0.90, which was achieved by the tested

measurement model. Both EFA and CFA results provided satisfactory convergent and

discriminant validity. Accordingly, it is safe to use the measurement items and the proposed

constructs in further model testing.

Testing and Validating the CAPM

The CAPM research model was tested against the data remaining after testing the

instrument using the EFA and CFA. The CAPM was tested in terms of structural equation

modeling goodness of fit, overall explanatory power, and total effects among constructs. Table IV

shows that the research model exhibited a good fit with the data collected from young Emiratis.

The explanatory power of CAPM was examined in terms of the percentage of variance explained.

As shown in Figure 2, CAPM was capable of explaining 20 percent of the variance in respondents’

willingness to work in the private sector. Additionally, 45 percent of the observed variance in self-

perceived employability constructs was explained jointly by CE and SE constructs. Furthermore,

36 percent of the SE variance was explained by CE, whereas 10 percent of the expected state

employment variance was explained jointly by CE and SE.

The standardized path parameters (regression coefficients—βs) and the corresponding t-

values of the CAPM constructs are shown in Table V and Figure 2, as reported by LISREL output.

The ESE had a significant total effect on WWPS of –0.41 with a t-value of –13.99 at p = 0.0000.

This showed that WWPS is negatively and significantly affected by ESE, which led to supporting

Hypothesis 1. The CE had a significant direct effect and an insignificant indirect effect on the

WWPS. The direct effect of CE on WWPS represented 86 percent of the total effect with a

regression coefficient (β) of 0.19 and a t-value of 5.12 with p = 0.0000. The indirect effect of CE

on WWPS was not significant with a t-value = 1.28. Both effects generated a significant total

effect of 0.22 with a t-value of 8.73 and p = 0.0000. Therefore, Hypothesis 2 was supported, which

means that willingness to work in the private sector is significantly and positively affected by

career exploration. As illustrated in Table V and Figure 2, ESE was positively affected by CE. CE

had insignificant direct and significant indirect effects on ESE. The direct effect was –0.01 with a

t-value of –0.20, and the indirect effect was 0.19 with a t-value of 8.11 at p = 0.0000. The direct

effect represented 5 percent and the indirect effect represented 95 percent of the total effect. The

total effect of CE on ESE was 0.18 with a t-value of 7.37 at p = 0.0000, which led to supporting

Hypothesis 3. The direct and only effect of CE on SE was significant, leading to supporting

Hypothesis 4 at p = 0.0000, which showed that career exploration positively impacted the self-

efficacy of the responding young Emiratis.

SPE was positively affected by both CE and SE. CE had significant direct and indirect

effect on SPE. The indirect effect was mediated by SE. The CE’s direct effect on SPE represented

45 percent of the total effect. The total effect of CE on SPE was 0.55 with a t-value of 18.10 and

was significant at p = 0.0000. Accordingly, Hypothesis 5 was supported. The total effect of SE on

SPE was 0.50 with a t-value of 11.56 and p = 0.0000, leading to supporting Hypothesis 6. Self-

efficacy had significant direct and indirect effects on WWPS. The direct effect had β = 0.14 with a

t-value of 3.37 at p = 0.0004. The indirect effect that was mediated through ESE and SPE had a

significant negative effect of –0.11 with a t-value of –4.39 at p = 0.0000. This finding is intriguing,

SE was positively related to WWPS, but when its effect was mediated through ESE and SPE, it

was turned into an insignificant total effect due to the strong negative effect of ESE on WWPS.

The direct effect represented 56 percent of the total effect, whereas the indirect effect represented

44 percent. The total effect of SE on WWPS was 0.03 with a t-value of 0.82. Accordingly,

Hypothesis 7 was not supported. It can be concluded that the willingness of young Emiratis to

work in the private sector is not affected by self-efficacy. SE had a direct effect on ESE of 0.32 (t-

value of 8.82 and p = 0.0000) only. Accordingly, Hypothesis 8 was supported. Hypothesis 9 could

not be supported, because SPE had an insignificant effect on WWPS.

Summary of Findings

Overall, our research model produced the following results. First, willingness to work in

the private sector is highly impacted by two key factors: career exploration and expectations

toward state employment. Career exploration positively affected willingness to work in the private

sector, while expectations toward state employment negatively affected it. Contrary to our

hypotheses, willingness to work in the private sector was not affected by self-perceived

employability and the total effect of self-efficacy on willingness to work in the private sector

turned out to be insignificant. This might be because it would not be considered appropriate for

young Emiratis to work in the private sector. It is not regarded by them as an acceptable option,

due to their reliance on the state to offer them jobs in the public sector.

Contrary to our hypotheses, willingness to work in the private sector was not affected by

self-perceived employability and the total effect of self-efficacy on willingness to work in the

private sector turned out to be insignificant.

Second, expectations toward state employment as well as self-perceived employability

were positively affected by both career exploration and self-efficacy.

Third, self-efficacy was highly impacted by career exploration.

Discussion and Conclusions

In this article we close an important gap in contemporary knowledge about career theory

and practice in emerging economies. Focusing on a three-level analysis of the individual, the firm

and the nation, we have explored a new perspective, which until now has been ignored in the

discussion on localization: individual career choice and the actual individuals seeking employment

within a segmented labor market (cf. Cohen & Baruch, 2010).

Our findings support the need to continue and expand career exploration initiatives such as

that currently done throughout educational stages. Further, we have expanded the investigation to

a context that is understudied in contemporary career literature, answering recent calls to evaluate

the relevance of contemporary career theory in different labor markets (Arthur, 2008). Aside from

the direct impact on willingness to take up private-sector employment, better knowledge and

understanding of career opportunities increased self-efficacy as well as self-perceived

employability. However, better knowledge of career opportunities brings with it higher

expectations for government to provide such employment.

As expected, a major disincentive to pursue private-sector opportunities is the high

expectation of government employment. This adds a negative dimension to the ruling bargain,

which means that “income is habitually derived simply from citizenship” in exchange for political

submission (Spiess, 2010). Young citizens expect jobs to be provided and expect a transfer

mechanism for the oil wealth. Even increased awareness of new careers brings an expectation that

the government will provide jobs through localization in these new careers. However, this has not

always been successful in the past. Education in human resource management accompanied

regulations requiring all HR managers to be citizens, but initiatives in the nursing or insurance

sectors did not succeed.

As long as citizens expect the government to provide public-sector jobs with the pay and

benefits of a few years back, willingness to settle for fewer rewards and more challenges will

remain low. This is understandable, since competition in the private sector is tough, with the UAE

being one of the least regulated markets for labor imports.

As long as citizens expect the government to provide public-sector jobs with the pay and

benefits of a few years back, willingness to settle for fewer rewards and more challenges will

remain low.

It is a classic example of allowing markets to shape the economy and society, as noted by

Stiglitz (2010) in a different context. Arab Gulf states have created an economy to serve private

investors and foreign direct investment, with little protection for private-sector employees. This

was designed at a time when the private sector was not considered an option for the employment

of Gulf citizens. The private sector served the interests of citizens well as long as they were only

investors and owners, yet its increasingly educated and demanding workforce cannot be

accommodated in a third-world labor market designed for the exploitation of temporary workers.

A citizenry “wholly accustomed to material benefits and no forms of extraction” (Davidson,

2008), who see jobs as entitlements or endowments, does not help the labor market develop

normally, nor does an education system weak and remedial in nature (Muysken & Nour, 2006).

Possibly as a consequence, neither self-perceived employability nor self-efficacy are very

high, though both can be positively impacted by very basic initiatives: Self-efficacy was highly

impacted by career exploration, which in turn drives desired outcomes. We believe that knowledge

of such relationships can be translated into action by a stronger focus on early exposure to career

opportunities and increased cooperation between education providers and the private sector.

Key questions will be how changes in the ruling bargain will be communicated and how

soft the landing will be for citizens feeling entitled to welfare provisions that earlier generations

enjoyed or are still enjoying. The socioeconomic strains could reasonably be expected to have a

destabilizing effect on the young and educated, who do not have access to fat government

paychecks. It is already visible in Saudi Arabia, where, due to the population boom, handouts were

cut down (MacFarquhar, 2009).

Implications for Theory

We expand contemporary knowledge of career issues in the growing sector of rich

developing countries. Current career theories were mostly tested in a Western context (Arthur,

2008; Sullivan & Baruch, 2009), and their relevance to the global context requires further

exploration (Dickmann & Baruch, 2011). In this regard, we support the findings of recent research

suggesting that new career attitudes are indeed relevant to collectivist societies (Ituma & Simpson,

2007; Park, 2009). Career proactivity is an essential ingredient for career success (Seibert,

Kraimer, & Crant, 2001; Seibert, Kraimer, & Liden, 2001). Our study manifests the relevance of

support mechanisms not merely at the organizational level (Sturges, Conway, & Liefooghe, 2010),

but at the national level too. It also extends the relevance of contemporary career theories into the

Gulf Arab environment.

We contribute to the generalization of human capital theory (Becker, 1964) by extending

its relevance to a national level within a global context (see Randeree, 2009). In particular, we

manifest how the boundaryless career (Arthur & Rousseau, 1996) and the post-corporate career

(Peiperl & Baruch, 1997) can have different meaning in different cultures, and the need to extend

scholarly investigation to a wider cultural context.

In order to cope with the situation at hand, social learning theory (Mitchell et al., 1979) can

be applied to the necessary adaptation of young citizens’ behavior in the context of careers.

Clearly, policies of acculturation into the new Western-oriented environment need to be

implemented in order to enable citizens to function in the private sector. Only the private sector is

able to create jobs at the scale necessary to absorb new entrants into the workforce. This approach

is also well in line with Fishbein and Ajzen’s (1975) theory of planned action, which suggests that,

like other attitudes and actions, different career patterns will be affected by the general culture of

societies.

Implications for Practice

Our article carries implications for both HR managers and for policymakers at the national

level, as well as for HR managers in multinational corporations (MNC0 operating in the Gulf

states. One of the most formidable challenges for HR managers remains understanding the key

external realities that impact the design of work and organizations (Felin, Zenger, & Tomsik,

2009) and how to attract skilled employees (Williamson, King, Lepak, & Sarma, 2010). Some of

the findings of this article can be expected to help addressing this challenge. The strongest

disincentive to private-sector employment, however, remains the expectation to obtain work in the

public sector. In line with previous research (Forstenlechner & Rutledge, 2010), we recommend

policymakers seek ways of developing and communicating a new social contract, one that no

longer emphasizes welfare through public-sector jobs. In line with previous research, we

recommend policymakers seek ways of developing and communicating a new social contract, one

that no longer emphasizes welfare through public-sector jobs.

HR managers in MNCs operating in the Gulf states should be aware that they will be able

to recruit local citizens to work for them in subsidiaries. Such people will reduce the need for

expatriates, and will be well connected with local decision makers. These connections and their

business impact are the only tangible benefit identified thus far by MNCs when it comes to

localization (Forstenlechner & Mellahi, 2011).

An obvious result from this study is the opportunity to increase career exploration through

increased cooperation of education providers, private-sector employers, and policymakers. Career

exploration can be facilitated in many ways, from basic self-assessment of job options to

internships and workplace integration into curricula. A stronger emphasis on coordination and

integration of education and career exploration is the most obvious and easiest remedy to the issue

at hand.

The results of our study support personnel involved in bidding for or executing work in the

UAE by (1) increasing awareness and understanding of the challenges related to localization and

(2) suggesting personality traits to look for among potential recruits. Since a key issue for many

organizations operating in the region remains the retention of citizens, it may be helpful to

understand that those more knowledgeable in understanding their career options and in scoring

higher on self-efficacy are more likely to be content with private-sector employment. On a macro

level, the private sector only stands to gain from supporting career-exploration initiatives by

providing placements, speakers, and more general support, as those impacted by career exploration

will in turn be more likely to consider private-sector employment in a positive light. Since a key

issue for many organizations operating in the region remains the retention of citizens, it may be

helpful to understand that those more knowledgeable in understanding their career options and in

scoring higher on self-efficacy are more likely to be content with private-sector employment.

Future Work

Expectations need to be addressed, and future studies may tackle the issue of motivating

the younger generation to explore a wider range of career options. At the firm level, it would be

interesting to see what both local and multinational firms can do to unlock the potential of the

human capital of citizens. While we believe it is unlikely for the social contract governing the

relationship between the rulers and their subjects to be transformed altogether, future research may

explore how the need to change is going to be communicated in a timely manner. Human and

economic considerations pose a significant challenge, since jobs cannot be created quickly enough

in the private sector to offer sufficient opportunities in the current demographic setting

(Chemingui & Roe, 2008).

Future research may also evaluate the effectiveness of communication strategies and

behavioral modification, in particular the essential reinforcement strategies at a national level. In

the modern, yet still tribally organized and influenced, societies of the Arab Gulf, such an

undertaking may prove more complex than it sounds.

Acknowledgments

We would like to thank the Emirates Foundation for supporting this research under the Emirates

Foundation Research Grant 2010-193. Further, we are grateful to Robert Studholme and two

anonymous reviewers for their comments on earlier drafts of this article as well as the feedback

received during the Academy of Management Meeting 2011 and the Gulf Research Meeting 2012.

Note1. Details are available from the authors upon request.

Ingo Forstenlechner is an adviser at the Federal Demographic Council in Abu Dhabi, he received his PhD from Cranfield University and has worked five years for global law firm Freshfields Bruckhaus Deringer before spending six years at United Arab Emirates University. His work has been published in among others the Journal of World Business, Journal of Business Research, Human Resource Management Journal, The International Journal of Human Resource Management, Middle East Policy.

H.M. Selim is an associate professor of MIS at the College of Business & Economics at the United Arab Emirates University. He received his Ph.D. in Management from the MIS Department, University of Arizona, USA. His research interests include IT in teaching and learning, and information technology acceptance. He has published in several journals such as International Journal of Human Resource Management, Decision Sciences, Computers & Education, International Journal of Distance Education Technologies, Computers and Industrial Engineering, IIE, Industrial Management & Data Systems, and Omega. Dr. Selim is a member of Decision Sciences Institute, INFORMS, and AIS.

Yehuda Baruch is a professor of management and associate dean for research at NEOMA Business School in France. He has published extensively in the areas of global and strategic HRM and CAREERS, with over 200 publications. He was previously an editor of Group &

Organization Management and former chair of the Careers Division of the Academy of Management.

Mohamed Madi is Vice Dean, DBA Director, and Professor of Statistics at the College of Business and Economics, UAE University. His research encompasses decision theory, reliability and Bayesian Analysis.  He has published in several reputable international journals and in the International Encyclopedia of Statistical Science.

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