Human Resource Challenges and Future in the UAE

Abstract

Managing human resource has become increasingly challenging in the modern society. Employees have become more enlightened through higher education, and this has made them more demanding. In the study, data was collected from Mr. Sami, the human resource manager at Al Hosni Gas in Abu Dhabi, through a Question-Answer interview. It was revealed that human resource managers are forced to find ways of meeting their demands in a way that will not only make them feel satisfied, but also protect the interests of the firm. Issues such as employees’ unions and poaching of highly talented employees are some of the external challenges. Using Transformational Leadership Model is one of the best ways of solving these problems.

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Introduction

Human resource is the most important of all resources within an organizational system. According to Brewster (32), many successful firms in the world today owe their successes to an effective and efficient human resource. The top management is responsible for the formulation of strategic policies that are meant to define the path through which an organization will follow to achieve success. It is the responsibility of the employees to interpret such policies and break them down into actionable objectives that should be achieved within a specific period. Their importance to an organization has been documented by many scholars in the contemporary world. However, Ariss (54) says that some emerging challenges may redefine the future of human resource and how it is managed within an organizational context. In the United Arab Emirates, the emerging trends have forced many organizations to redefine the strategies they use in their human resource management. In this paper, the researcher will look at the challenges and future of human resources in the United Arab Emirates.

Section I: Analysis of Al Hosn Gas

Overview of Al Hosn Gas

In order to understand the challenges and future of human resources in the United Arab Emirates, the researcher considered it important to select a specific firm within this country that can help in primary data collection to support the findings of secondary data. The researcher chose to use Al Hosn Gas as the company that will be involved in this study. Al Hosn Gas was founded on February 1, 2010, following a decree by the Emir of this emirate. Al Hosn Gas Company, which operates as part of Abu Dhabi National Oil Company Group, has its headquarters in Abu Dhabi. The firm is tasked with the extraction of sour gas in Shah Field by the parent company.

The firm is one of the major employers in this emirate. Many employees work in the extraction field, transportation, and storage facilities. Others are technocrats who are responsible for the management and maintenance of the equipment used in extraction, transportation, and storage purposes. Many of those who work in this firm are local Emirati nationals. However, the firm has also employed technocrats from foreign countries to boost its operations. Saif Ahmed Al Ghafli is the chief executive officer of this firm. Under him are several vice presidents responsible for the management of various departments. The department of human resources is headed by the senior vice president responsible for administration, Mr. Ali Al Marar. Mr. Sami is the HR director. In this study, the researcher interviewed Mr. Sami because of his position within the human resource unit of this firm.

HR Culture, Environment, Laws, and Trend in the United Arab Emirates

According to Brewster (84), Human resource culture in the United Emirates has experienced a number of changes as the country opens up to the international community. Human resource culture is closely defined by the organizational culture that an organization employs. Employees tend to embrace a culture that the top management unit has defined within an organization. A firm that embraces close employee to employee and employee-employer relations is likely to have a culture of close coordination and a united approach towards addressing problems that may arise within a firm. The environment that is created will determine the human resource culture. Ariss (73) says that laws and regulations have been developed in the United Arab Emirates to help define the relationship between the employer and employee.

The law defines what both parties are expected and what they must observe during the period of the relationship. The law was meant to eliminate cases where employees are exploited by their employers. According to Brewster (64), there is a new trend that has been witnessed in many firms in this country where employees work under a performance contract. The time when performance was measured at the organizational level is long gone. Many firms in this country are now interested in determining the performance of the individual employees within a given department. Employees sign a contract specifying what they need to achieve by the end of a given period, mostly a financial year. By the end of the stated period, their performance is measured against the set benchmarks to determine if they are working optimally. Many firms in this country are now using this method to determine the value of their employees. Some have moved a step further to base the compensation of their employees on their performance.

HR Functions within Al Hosn Gas

The analysis conducted at Al Hosn Gas revealed that the HR unit plays a very critical role in the normal running of the firm. Recruitment of the employees is one of the primary responsibilities of this unit. The hired employees must meet the criteria of each of the seven departments. It means that the HR officers must work closely with heads of other departments to understand their HR needs. The department is also responsible for promotion and salary reviews in conjunction with other departments. Various heads of departments give suggestions on who should be promoted, and this department affects the promotion. The head of the department together with the head of finance also discusses issues of salary reviews from time to time. Managing employees’ records and their dismissal are also important responsibilities of this department.

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Section II: Literature Review

Scholars have conducted massive research on the issue of human resource management. According to Ariss (65), human resource management plays a critical role in the development of any firm. Many organizations have ignored the importance of human resources. Such firms fail to emphasize the need to ensure that the employees are well taken care of as a way of maximizing their output. Managing of the employees has become more challenging than it ever has been in the past. According to Brewster (88), in the past, large organizations dominated the labor market. They had the power to dictate almost everything about human resource management. However, this is no longer the case. Employees have become increasingly empowered. This empowerment is not only caused by their education levels but also the fact that they now have many options than was the case before. An employee will be certain that if he is properly skilled, then he can easily get a job in other companies even if the current employer dismisses him. Many firms have been forced to redefine their human resource management practices to ensure that they retain their best employees.

According to Ariss (113), in the current competitive market, a firm can only achieve success if it has knowledgeable and highly experienced employees. For this reason, many firms find the training of employees a critical necessity to increase their quality. Losing an employee that has been trained for a very long time can be a big blow to a firm. It will take a lot of resources, including money, to train another employee to fill such vacancies. Many firms, therefore, struggle to ensure that they maintain a low employee turnover as much as possible. As Brewster (63) puts it, the power in the management of human resources has been taken away from the managers and handed over to the employees.

What makes the whole process even more intriguing is that now, more than ever before, managers are under pressure to ensure that their employees deliver. This means that they need more power to ensure that they motivate and direct employees to achieve the expected results. However, the power has been taken away from them. This has seen many successful firms shift from traditional management practices to leadership. Managers are now directing the employees through the transformational leadership and servant leadership principles. Employees are made to feel that they are in charge, but the leaders constantly challenge their performances to ensure that they improve the level of output. Through leadership, it has also become easy to influence the employees’ behavior and the culture they embrace within an organizational setting (Ariss 98).

Contribution of the research to the current literature

This research will play an important role in enhancing knowledge in this field. The researcher conducted primary research by collecting data from one of the top human resource executives in a leading gas company in the United Arab Emirates. Most of the existing literature on this topic is based on Western contexts. This research will enrich the bodies of literature by providing up-to-date information on this topic based on the local Emirati context.

Section III: Methodology

In this study, the researcher used both primary and secondary sources of data. Primary data for this research was collected from Mr. Sami, the human resource manager at Al Hosni Gas in Abu Dhabi. The researcher organized for a face-to-face Question-and-Answer interview at his office using a questionnaire. The scope of data collection was limited to this individual executive. This was because of the time that was available for the research. The level of accuracy needed in this research would be achieved within this scope. Secondary data was gathered from the existing literature, especially books, journals, market reports, and other online sources that have been recorded over the past few years. The respondent was very important in this study given his experience in the field of human resource management and the current position at Al Hosni Gas. In this report, the researcher used a qualitative approach to analyze the primary data collected from the respondent. This approach facilitates the collection and analysis of data in a way that facilitates the creation of a theory or development of recommendations that can be used by other stakeholders to inform their decisions. The study involved only one participant who was considered an expert in this area. This eliminated the need to use quantitative data analysis. His responses were collected and analyzed in order to understand the current trends, challenges, and future of human resources in this country.

Section IV: Presentation of the Research Outcome

The researcher was able to secure an appointment with the respondent. The respondent was interviewed using a questionnaire that had been developed. Responses obtained from the HR Director are given below.

Section 1: HR within Al Hosn Gas

At Al Hosn Gas, the function of HR is to ensure that the process of hiring, performance appraisal and firing of the employees is done by the code of conduct defined by the national government. This firm currently has seven departments. In total, there are 1247 employees at Al Hosn Gas working in various departments. The main responsibilities of the HR unit are to ensure that this firm has the best workforce that can meet the needs of various departments. The HR department works with other departments to ensure that this is achieved. In an attempt to implement the modern human resource practices, this firm has introduced the performance contract among the employees. This is to ensure that every individual accounts for his output within the firm. This practice was put in place three years ago.

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Section 2: Human Resource Management in the UAE

According to Mr. Sami, successful HR professional in the modern Emirati society must have several skills. He must be a team player to ensure that people work in harmony. He must have some psychological knowledge to be able to detect problems among the employees even without interrogating them. Such an expert should also embrace Transformational and Servant leadership principles to achieve success. Internal challenges that HR professionals face in this country include internal wrangles among the employees, lack of coordination among the stakeholders in different departments, defiance among the employees who feel that they are very valuable and constant demands for a pay rise. In the external environment, unionization poses one of the biggest challenges to HR professionals in the UAE. They advocate for industrial actions every time their demands are not met. Some of their demands are realistic. Other challenges include the pouching of talented employees by established firms and the desire by the local experts to work in the Western countries, leading to brain drain in the local economy.

Section 3: Future of Human Resource Management in the UAE

The major challenge that the HR function will encounter is a highly empowered employee who dictates HR activities must be run. As of now, these employees have gained a lot of power due to high education, enlightenment, and the availability of choices. Very soon, they will dictate the HR activities, rendering the HR directors powerless. This means that within the next decade, the HR department will be forced to be an influencer other than the director of human resources. The main role will be to influence the activities of the employees using the transformational leadership model. When this time comes, then the winning human resource management strategy will be defined by the transformational leadership theory. HR managers will have to become transformational leaders with the capacity to make employees feel valued, respected, and loved within the firm. The manager will need to use these skills to create a community where everyone understands and cherishes his or her functions.

Section V: Discussion

Outcome of the research

From this research, it is clear that the main function of an HR department is to hire, coordinate, appraise, and discipline the employees within an organization. This research has revealed several facts about the trends and current challenges in human resource management. The challenges can be external such as employee unionization and poaching, or internal such as the inability of the employees to work as a unit. One of the human resource best practices that are becoming common in the United Arab Emirates is the performance contracting. The research reveals that many HR professionals are treating employees’ performance from a more personal perspective. This research also reveals that human resource professionals need to know how to embrace transformational leadership in their respective organizations. It is only through this that they can retain their employees. The increasing power of the employees to choose where to work is posing a serious challenge to human resource professionals. This problem is expected to become worse in the next decade as the number of firms where employees can choose to work from is on the rise.

Solutions, new ideas, and approaches

The solution to some of the human resource challenges identified above lies with leadership. As stated in the analysis, Transformational Leadership and Servant Leadership models are becoming more relevant than they have ever been before as the managers seek to find a way in which they can share their power with their employees. Handling of employees from an individual’s perspective is also a new idea that can help solve some of these problems. This approach will make the employee’s unions meaningless as the power to bargain for benefits will be handed over to the employees.

Section VI: Conclusion

This paper has revealed that human resource has experienced a number of changes in the recent past as employees become more educated and more informed about what to expect from their employers. In the United Arab Emirates, just like in many other parts of the word, human resource executives are finding it difficult to retain their employees at a time when high rates of employee turnover can be very costly to a firm. Unionization of employees has also been identified as an issue that is posing management challenges to the employees. The research suggests that human resource managers should embrace Transformational Leadership and Servant Leadership models as a way of solving some of these problems. Performance contracting has also been identified as the best practice that firms should embrace to manage employees from an individual’s perspective.

Linked research project that should be explored

Based on the findings of this study, it is recommended to conduct further research on employee motivation strategies. Firms should know the best way that they can motivate their employees in order to retain them within the firm for a long time.

Works Cited

Ariss, Akram. Global Talent Management: Challenges, Strategies, and Opportunities. New York: Cengage, 2014. Print.

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Brewster, Chris. Handbook of Research on Comparative Human Resource Management. Cheltenham, UK: Edward Elgar, 2012. Print.

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