The development of an effective employment and skills development strategy needs insight into two important concepts; that of local content and host community obligations. The local content can be explained as the percentage of input such as labor and services derived from the host nation or region (Esteves & Barclay, 2011). On the other hand, host community obligations are legal mandates that demand multinational corporations to provide economic gains to neighboring communities.
The regulation determines the scope of the program. Governments make use of LCRs as regulatory instruments with the aim of promoting regional development, creation of jobs, and transfer of technology (Ettmayr & Lloyd, 2017). These regulations compel organizations, especially those operating in the energy sector, to favor local talent as compared to expatriates.
The initial step in creating a strategy is conducting an extensive baseline evaluation of the labor market. Companies must compare the available skills inventory in the community to the labor requirements of the particular project. Through such a comparison, organizations can plan for capacity building initiatives (Pegram et al., 2018). By assessing their skills needs at an early stage, stakeholders are able to set realistic expectations for job creation.
In order to put the strategy in place, there is a need for harmonization between skills training and procurement processes. The strategy will involve incorporating employment targets in procurement policies. By ensuring that the primary contractor adheres to certain employment targets, businesses can utilize their procurement network to create jobs locally (Esteves & Barclay, 2011).
Great caution is required during the undertaking of such projects to ensure there is no negative economic impact. Strict local content regulation could cost a lot of money to implement due to lack of preparedness among locals, thus reducing the amount of taxable income generated from the project for other government projects (Kolstad & Kinyondo, 2016). The success of such policies depends on setting realistic targets that steadily improve the local labor participation.
In conclusion, a successful local employment policy should be a union between business objectives and developmental needs of the hosting population. In doing so, the corporation achieves both regulatory compliance and builds robust relationships with local communities.
References
Esteves, A. M., & Barclay, M.-A. (2011). Enhancing the benefits of local content: integrating social and economic impact assessment into procurement strategies. Impact Assessment and Project Appraisal, 29(3), 205–215. https://doi.org/10.3152/146155111×12959673796128
Ettmayr, C., & Lloyd, H. (2017). Local content requirements and the impact on the South African renewable energy sector: A survey-based analysis. South African Journal of Economic and Management Sciences, 20(1). https://doi.org/10.4102/sajems.v20i1.1538
Kolstad, I., & Kinyondo, A. (2016). Alternatives to local content requirements in resource-rich countries. Oxford Development Studies, 45, 409–423. https://doi.org/10.1080/13600818.2016.1262836
Pegram, J., Falcone, G., & Kolios, A. (2018). A Review of Job Role Localization in the Oil and Gas Industry. Energies, 11(10), 2779. https://doi.org/10.3390/en11102779
