Talent Acquisition in Iran

Talent Acquisition in Iran

Understanding the Opportunities and Challenges

This paper considers the challenges and opportunities that lie ahead of multinational companies in employing talent in Iran and the difficulties for educated diaspora that move back to the country.  A deep investigation and interviews with some of the managers of local and multinational corporations operating in Iran revealed that one of the main limitations is to identify and acquire expert talent for different job positions.

Based on statistical information released by the Statistical Center of Iran, Iran ranks 8th in acquiring talent within Middle Eastern countries and 139th in the world (out of 143).

Various factors influence this situation such as:

  1. An improvable educational system and its huge gap with active industries in Iran resulting in graduates not having sufficient practical skills.
  2. Internship experience is taken for granted because both students and companies are reluctant to internship periods. In fact, interns consider the period positive and beneficial only for the companies, despite professional views that see internship as a path towards learning more skills.
  3. There is a lack of strong and professional human resource structure when compared to American and European companies. Most Iranian companies do not have a professional HR department that provide clear career paths, job specifications, etc.
  4. There is a weakness in using professional tools such as LinkedIn and Iran Talent to connect the employers with the candidates searching for jobs.

Together, the factors above make the process of acquiring talent challenging in Iran.

Expats

Challenges for expatriates working in Iran

  1. No expat compounds are available in Iran, as in many other countries in the MEA and Asia region. Therefore, expats must live in cities mixed with locals which at times poses certain challenges for the foreigners.
  2. Women should follow Islamic regulations for clothing and attire in public.
  3. Heavy traffic and pollution have often been viewed as problematic in Tehran.
  4. The expat community in Iran is still relatively small (few thousands of people in Tehran).

Opportunities for expatriates working in Iran

  1. Iranian market experience adds significant value for individuals perusing international careers. Work experience in Iran shows that managers can overcome the challenges of working in volatile environments.
  2. For expats relocating with children, there are a few European schools in Tehran.

Diaspora

Challenges for diaspora in Iran

Many Iranians move back to Iran after graduating from foreign universities or after a period of working in these countries,  but most face challenges in acquiring a new job. Listed below are a few limitations encountered by the diaspora based on a short survey conducted by our team:

  1. Obvious work cultural differences between present and previous work places (Iran and foreign countries) such as the lack of commitment, discipline, execution of written rules, prevalent informal/personal relations which are present in Iranian work places, etc.
  2. Limitations in implementing acquired knowledge and skills in Iran due to a lack of sufficient infrastructures.
  3. Having trouble in creating professional networks when new to the country. Most of these expats have lost their useful connections because they have been out of Iran for a long time.
  4. Low level of job satisfaction and well-being because of lower salaries in Iran compared to foreign countries.

Opportunities for diaspora in Iran

Working in Iran also poses opportunities for these candidates to improve and advance their professional careers. Iranian diaspora have a proficient knowledge in English and experience of working in multinational environments, so compared to the local Iranian work force, they have a better chance at career progression and can implement their ideas after attracting their manager’s trust.

Locals

Challenges for locals working in Multinational Companies (MNCs)

  1. Cultural challenges: Cultural differences in the workplace cause problems for Iranians who have previously worked in local companies.
  2. Imbalance between work and personal life: Based on interviews with some candidates, imbalance between work and personal life is a concern when working at multinational companies.

Opportunities for locals working in MNCs

  1. Learning and development opportunities: Those working in multinational companies prosper from the learning and development opportunities that these companies have to offer.
  2. Higher salaries: Multinational companies often offer higher salaries.
  3. Opportunity for migration: Multinational companies often act as doors for local talent to migrate out of the country; especially for recent graduates.
  4. Higher job standards: Higher job standards can be seen as an opportunity to work in a multinational company.
  5. Professional atmosphere: Professional workplace culture is an advantage of working at multinational companies.

Challenges for Multinational Companies

Challenges when employing expats

  1. Significant administrative burden: Getting essential permits to work in Iran is a major problem as it often takes a long time to acquire licenses every time these people come to Iran.
  2. Imposed expat quotas: Based on the Iran Labor Law, three local hires should be employed for every expat who is employed by a company.
  3. High cost of acquiring expats: Expats expect an attractive package to account for perceived safety issues.

Challengers when employing locals

  1. Cultural challenges: Cultural differences in the workplace cause problems especially for those Iranians who have previously worked in local companies. This sometimes pushes them to quit their job because they can’t keep up with these differences.
  2. Skill and expertise related challenges: As mentioned above, HR departments in Iran are not very structured, so there is a need for training and development of local talent.
  3. English proficiency: Proficiency in English is not prevalent in Iran and locals usually struggle with the language. This is a major roadblock for candidates when working in multinational companies.

However, hiring local talent has an advantage of speaking the local language in traditional markets such as Iran. This helps executives and managers deal with local clients. Also, based on interviews conducted with managers of multinational companies, hiring recent graduates is preferred because they are not yet accustomed to the culture prevalent in local Iranian work places and thus makes it easier for them to be trained and shaped by these companies.

Conclusion

Having active multinational companies and diaspora in Iran is a huge advantage for the country because of their shared knowledge and experience. Therefore, it is essential that Iranian government provides the setting and support for growth and improvement of these companies and diaspora.

Despite the challenges mentioned above, there is a big opportunity for new international companies coming to Iran and they will benefit in the long run. As the economy improves after the lifting of sanctions, more foreign companies, expats and diaspora will be moving to Iran and this will improve the working environment both for Iranian companies and the foreign ones. As a note to international companies which are already in Iran, or those which are thinking of coming to Iran, do not be discouraged by the above-mentioned obstacles, as Iran is a country worthy of investment. Have patience and you will see the impact in the long run.

Hoda Rezvani, Associate at Infomineo.


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