Issue 6, 2014. December-January

   

THE NEXT FRONTIER - DEVELOPING THE GEORGIAN WORK FORCE

The Georgian job market operates in a strange dichotomy. There are not enough jobs - but simultaneously there arealso not enough qualified personnel for the positions that are available. Hundreds of candidates often apply fora few existing openings, while several firms compete for a handful of top employees every year.

As a developing, emerging-market economy, the country has made great strides in creating a favorable business environment. Nevertheless, challenges in creating a workforce that can keep up with and garner the benefits of the country's growing commercial success still linger. Investor.ge set out to explore how the corporate sector, non-profit organizations and the state invest together and separately in the country's human capital. Ultimately, we found that, luckily, unlike in other developing markets, Georgians overseas jump at opportunities to come back home, decreasing the country's risk of brain drain.


Keti Khukhunashvili

A Georgian Exodus?

Former SDSU Provost Nancy Marlin and Georgia's Minister of Education and Science, Tamar Sanikdize signing the agreement to launch SDSU-Georgia (SDSU).

Developing countries often lose skilled workers to their more developed counterparts, where professionals find better employment conditions and higher pay. India, for example, is the prime example of destructive brain drain. According to Bloomberg Rankings published in 2013, in 2012, two-thirds of the H-1B visas for skilled workers the U.S. issued were to Indian professionals. The second largest share went to Chinese emigrants.

Georgia did not even make the 22-country list, which also includes the Philippines, Mexico, Nepal, Colombia, Turkey and Israel.

That, however, does not mean Georgian professionals are not being drawn to opportunities for better pay and advancement overseas: according to the United States Embassy in Georgia, up to 4,000 Georgians have participated in the over 20 educational exchanges currently offered by the Department of State.

Tea Kuchukhidze, who coordinates educational and professional programs at the United States Embassy in Tbilisi, noted that there is "a very low percentage of USG program participants who overstay their visas" from Georgia.

"From what we hear from program participants, they are highly motivated to bring their experience and expertise back to Georgia, and to contribute to the development of Georgia's economy, democratic institutions and civil society," she explains, adding that many alumni of U.S. embassy exchange programs chose prominent leadership roles in Georgia.

"Davit Usupashvili, Chairman of the Parliament, (Muskie and IVLP participant) and Davit Lordkipanidze, General Director of Georgian National Museum (Fulbright Visiting Scholar Program participant) are examples of bright minds staying in Georgia to lead the way."

Despite these encouraging stories, a significant number have found better working conditions elsewhere as relative to the size of the total population. For example, TBC Holding - a company building the American Hospital in Tbilisi (AHT) in partnership with Dima Tvildiani and the Conti Group - has identified many successful Georgian doctors licensed and working in the US.

The project is taking advantage of this pool of highly advanced personnel to bring approximately 40 leading doctors back to the country.

As the CEO of TBC Holding, Levan Akhvlediani, explains, "the concept behind this $80 million project is different from the hospitals and clinics operating in the city currently. The key advantages for the hospital will be high-quality healthcare services, international accreditation and American-licensed Georgian medical personnel."

He noted that the group is in talks with doctors who are interested in returning to Georgia after successful careers in the U.S.

"Locally accredited doctors will have the chance to receive additional training abroad and, upon successful completion, to join the hospital's medical staff. The hospital will focus on providing services that are most frequently sought abroad by Georgians and residents of neighboring countries," Akhvlediani said. "As a second phase, the hospital will have a teaching facility that will host students for their residency studies."

Ultimately, the AHT will create 400 new jobs for Georgian medical professionals who return from abroad or stay in Georgia to work.

Education Abroad, Better Employment at Home?

Untapped opportunities remain for developing more capable business personnel as well. Both DLA Piper and Deloitte, two companies active in workforce development in Georgia, find it challenging to recruit qualified employees. Deloitte, along with other top business employers (auditors and banks), often compete with each other for a few candidates, typically from the one or two leading educational institutions or who have foreign degrees. DLA, on the other hand, looks to hire staff who have had some sort of exchange experience in the U.S. or in English-speaking countries.

"Historically [with over 20 years of legal practice experience], the smartest Georgian lawyers with best English did not have LLMs. Good English does not come from doing LLM, it comes from getting educated in the US, especially at a high school level. So, LLM is not a decisive factor [for DLA Piper when hiring lawyers], how smart they are is decisive," noted Ted Jonas, the managing partner at DLA Piper.

More top employers tend to fill their most lucrative executive-level positions with staff that boast impressive educational and professional credentials, but choose to come to Georgia as soon as appropriate opportunities arise. At Bank of Georgia, 75 percent of executives have foreign education from well-known institutions, such as the Cass Business School, Cornell, and John Hopkins - as well as working experience at prominent foreign financial institutions. TBC Bank has recruited its top managers and directors from leading managerial positions at such institutions as Barclays, Deutsche Bank, and Unicredit; three deputy CEOs hold top-20 MBA degrees.

Overseas qualifications seem to provide a competitive edge to job seekers in Georgia, although employers are hesitant to describe this as the key criterion for hiring.

Some companies are opting to invest in developing locally trained human resources: Deloitte and DLA Piper are providing good working schemes for internal workforce development programs.ProCredit Bank also has developed an extensive overseas training program for its employees.

However, foreign-educated personnel provide useful perspectives and important interpersonal skills and experiences for the locally sourced professionals, explains Deloitte Managing Partner, John Robinson. "[Audit companies] have a snowball effect. Our workforce gets qualified here and goes off to other companies," enhancing the country's human capital.

Programs Focus on Keeping Talent at Home

At the Open Society Georgia Foundation (OSGF), a special project aimed to develop Georgian academia and to staff Georgian universities with highly qualified scholars. Tinatin Bregvadze, the South Caucasus Coordinator for the Academic Fellowship Program at OSGF, notes that one sphere that suffers from the brain drain problem is the academia.

The commonly cited challenges of an underdeveloped working environment, inadequate pay, and shortfalls at the policy level still apply. To remedy these obstacles, Bregvadze said that the Academic Fellowship Program worked with around 100 scholars who have already transformed Georgian academic life through their work in this sector.

Although this program has run its course with the Open Society Institute, it has left rich material for investment from businesses and the government.

DLA offers its lawyers regular trainings from its wider company network. "DLA trainings are very distinguished from other local law firm alternatives," noted managing partner Ted Jonas. These include webinars and on-site training at the company's offices around the world with topics varying from general skills to group trainings for different fields of legal practice. DLA lawyers are also invited to professional knowledge-sharing conferences, where they have excelled in the past as well.

The Georgian government has also invested in several exchange programs. One such interesting program, delivered in partnership with U.S. Embassy in Tbilisi, aims to provide best-in-class education to students pursuing careers in the military sphere. Students have an opportunity to continue their bachelor level studies at the United State service academies - such as the U.S. Military Academy at West Point, the U.S. Naval Academy, the U.S. Coast Guard Academy, the U.S. Merchant Marine Academy and the U.S. Air Force Academy.

These students have an obligation to serve for a number of years in the public sector in Georgia.

But it is not always easy for returning scholars to find good jobs when they come back home: one returning student,GiorgiJanjalia, found that the working environment is often resistant to change that overseas graduates try to introduce. Traditionally low pay, especially in the public sector, is a big challenge. The biggest obstacle yet, however, is persevering through nepotism.

Fortunately, a new state program has emerged with a specific goal to finance bachelor, masters and doctoral studies abroad for civil servants, as well as several priority areas of academic studies. The newly established International Education Center (IEC, at www.iec.gov.ge), a program under the management of the Chancellery of the Government of Georgia, is pioneering a transparent, well-informed and targeted education-financing scheme in which the state implements long-term initiatives for Georgian workforce development. The program, established in May 2014, has already financed 77 students for a wide variety of degree programs in the U.S., Europe and Asia.

According to Head of the IEC, Nino Chelidze, the IEC aims to create "a knowledge society of Georgia and use educated HR for facilitation and development of the public sector." The program prioritizesselection-process transparency, she said, stressing that the program takes measures to automatize the application screening process to safeguard against human error or "attempts to skew the selection process."

The IEC lists all beneficiaries on the IEC website and the rationale to finance any particular area of study is made public. The program also "focuses on assisting Georgian nationals in Georgia's occupied territories and the rural areas of Georgia, as well as persons with disabilities."

Additionally, Chelidze explains that theIEC is crucial for "paving the way for highly qualified human resources and ensuring access to high-quality education abroad, whichare of strategic importance for Georgia's economic and social development". Although, in order to retain these qualified new resources in the country, expectations of employers, as well as employees,must be adjusted and matched.

That, however, can be difficult.

If job makers aim to find fresh, top-school graduates with 12 years of experience in a specific field, they are unlikely to find their dream candidates. At the same time, foreign-educated young people cannot expect to land top management jobs fresh out of college.

Investment for future professionals

Businesses in Georgia have started to invest in initiativesto create a workforce that matches their demands. Bank of Georgia is now working with the U.S. Embassy to expand the Fulbright Graduate Student Program for students interested in pursuing degrees in business, information technology, and engineering.

According to Kuchukhidze, "from fall 2015, in addition to the six scholarships provided by the U.S. Government and the Ministry of Education and Science, there will now be two additional scholarships provided by the Bank of Georgia's Tree of Life Foundation."

There are also NGOs providing unique professional training programs with a focused effect on a target group of students. The American Chamber of Commerce, for example, has a pilot training program running for students of several of its member universities. This and similar programs can be further extended to become independent study or internship courses as part of bachelors' or masters' degrees.

A new, US accredited degree program, financed through the US government's Millennium Challenge Compact, is also an effort to provide the latest training to Georgia's new workforce. The program is bringing San Diego State University to Georgia to help students receive the most modern degrees in science, technology, engineering and mathematics available.

"This will generate greater private sector activity in Georgia, which ultimately creates jobs, fuels growth and makes the country a stronger trading, investment and business partner at home, in the region and beyond," noted Daniel W. Yohannes , the former MCC Chief Executive Officer, in a blog post on the program that was published in July 2013, when the compact was signed.

"MCC's investment to educate Georgia's workforce promises to deliver a number of positive effects that will boost earning potential and productivity. Progress like this will replace development dollars with private sector-led growth in Georgia and open new opportunities for Georgian students."

Kenneth Walsh, the dean of the new school in Georgia, was quoted by the university's press service as saying: ""The government of Georgia determined that trained engineers and scientists are critical to their economic development," he said. "Engineers and scientists build innovation economies and the infrastructure of a modern society — both things that Georgia really needs to take the next step."

Keti Khukhunashvili is the Investor Relations Manager at TBC Bank. She graduated with a double major in Economics and International Relations from Simmons College (Boston, MA) and has worked on a number of educational projects, including those at the GuivyZaldastanishvili American Academy in Tbilisi and the European School.

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