Human Resource Landscape in the Middle East - Case Study Example

HRM in the Middle East: A Comparative Analysis Name Institution Date Introduction Human resource landscape in the Middle East is characterized by numerous features, some distinctive of developing countries and others exclusive to a region. Even as developing nations, States in Middle East are distinctive in the sense that majority of them enjoy large per capita income that has enabled them to considerably invest in novel technologies, entail human resource management systems. This situation has led to unique human resource environment, raising numerous major challenges as well (Mellahi, 2000). Since The Middle East areas enjoys great but unequally distributed wealth with oil producing nations such as Iraq, the Gulf States and Saudi Arabia being economically stable while other countries like Egypt and Yemen are economically suffering. By going via the present market conditions, it is significant for the human resource professionals together with the top management to advance themselves with new processes and strategies that in order to outplay their competitors in strategic management of their human resources (Yang, 2002). Key human resource management features in Saudi Arabia Saudi Arabia is rich in natural resources and capital but its human resources remain unqualified and skilled. Due to immense influx of workers from all over the globe seeking for jobs in the oil rich nation, organizations particularly in the oil firms are required to employ human resource management practices that will effectively manage both local and foreign workers. The social attitudes and cultural values to work and management in Saudi Arabia are very diverse from those in rest of the globe. The key contemporary social and cultural features of Saudi Arabia that have affected the human resource management practices is attributed to two inter related major factors; the influence of family and tribal traditions and the impact of religion. Islamic values and laws affect human resource management in Saudi Arabia. The prophetic prescriptions and principles obtained from Koran act as a guide for the managers in undertaking their business issues. Wood, & Mellahi, (2001), the Arab culture is socio-centric, traditional and male dominated and also encourages dependence on friends and relatives. The impact of Islamic law is observed in the employment of women, managerial attitudes and employee manager relations. Human resource management policies and practices in Saudi Arabia are affected by political, cultural and social factors. Religion plays a significant part in almost every constituent of business entailing human resource management (Harry, 2007). According to Mellahi (2000), the practices of human resource management in Saudi Arabia depends on the form of ownership, whether the company is private owned or state owned, the type of workers, whether foreign or local. In state owned corporations like Saudi ARAMCO, the human resource model is majorly concerned in management of local managers and employees which is portrayed as having seniority wages, lifetime employment and social cohesiveness. In the cultural context the ties of friends, relatives and tribe are considered more significant than the vitality of the organization, as managers employs their friends and tribe members (Bono & Jones, 2008). Key human resource management features in UAE Being an Islamic nation just like Saudi Arabia, human resources policy and practices are also influenced by Islamic teaching, cultural values and social attitudes. However, Expatriate human resource is a major factor influencing human resource management in the United Arab Emirates. Expatriates have very diverse relationships with their home and host countries. As a result and consequence of development in UAE expatriate human resource is a huge proportion of human capital. Even though UAE has become outstanding in economic terms, foreign workers usually have limited or no material possession in his indigenous land and they are usually desperate for job, which usually result to lack of job satisfaction (Budhwar, & Mellahi 2006). Employees usually cite lack of job security, hazardous physical surroundings where there are no sufficient safety precautions, lack of prospects for promotion. Additionally, there is no organizational commitment, with employees lacking a sense of loyalty towards employers since employees feel that their psychological contracts have been infringed by their employers, and a huge portion of workers who come from developing nations taking up loans for the payment of manpower supply agencies for getting those jobs in the UAE. Similarities that UAE and Saudi Arabia face in terms of HRM related challenges The major challenge of human resource manager in both Saudi Arabia and the United Arab Emirates is strategic retention of personnel and talents development of a diverse workforce due to presence of local and foreign workers. Human professionals are supposed to be coaches, mentors, counselors and succession planners to aid company members along with their loyalty. According to Bono, & Jones, (2008), the human resource manager is also supposed to fight for and promote ethics, values, spirituality and beliefs with their organizations, especially in management of the diversity workforce. Since UAE and Saudi Arabia have both local and foreign workers the future success of UAE organizations relies upon the ability of the human resource manager to manage the diverse body of talents which can bring innovative perspectives, views and ideas to their work. As influx of foreign workers in UAE and the Kingdom of Saudi Arabia is expanding over the past decades and years, private and public sectors are employing a more diverse labor force and companies are employing people from different societies and countries with diverse attitudes and backgrounds. A diverse work force is supposed to work jointly in spite of the cultural backgrounds and beliefs so as to accomplish the organizational goals. Managing this diverse work force is challenging to the human resource professionals because at most times, local workers are not able to incorporate in a work force that is multicultural and diverse. The human resource management of foreign employees is based upon the accounting model. In this case, the control of foreign staff is concerned in the systems, performance, performance management and tight regulation over the actions of individuals .The major aim of control is to lessen the labour cost and enhance effectiveness of workers. This makes the human resource department to be more than an administrative unit when handling foreign worker (Atiyyah, 2002). The wages and salaries are established individually and workers treated as individuals other than a significant entity within the organization. The approach of human resource management with foreign staff is also entrenched in HRM practices of locals within the private sector. This makes the managers to have a difficulty in adjusting the practices so as to make locals fit in these practices. All workers want to be treated as a significant factor in development of the organizations and thus managers should attract and motivate highly skilled workers (Rowe, & Gardenswartz, 2002). Differences between UAE and Saudi Arabia in HRM related challenges The shortage of skilled workers and battle for talent are steadily posing challenges for the human resource management policies and processes in Saudi Arabia. Yang (2002), argues that the competition has become more global and the emergence of multinational corporations in the country has deepened the battle for talents. The shortage of talents and skills has required several Saudi Arabia organizations to create strategies that will result to attraction, motivation and retention of valuable staff (Wood & Mellahi, 2001). As one of the wealthiest nation in Middle East where international and world class companies abound, human resource management in Saudi Arabia is regarded a strategic area that will assist local firms to accomplish the same competition as their local and international competitors Organizations are therefore needed to adopt competency based human resource systems as well as western strategies and styles in areas like selection and recruitment, development and training, compensation and benefits and career planning. Generally, there needs to be a transition in human resource processes and activities and organizations are also required to value their employees (Atiyyah, 2002). Nevertheless, the development of human resource management as a strategic partner of the organization is hampered by diverse factors one of them being the shortage of qualified and skilled workers. The battle for talents amid firms is deepening and it is becoming difficult to attract and sustain qualified employees. As a result of qualified employees’ shortage, companies have been forced to compete with one another in areas like benefits and compensation and this have given way to a highly mobile workforce with organizations facing great rates of attrition. The HRM challenges in Saudi Arabia are different from those in UAE because as UAE continues to experience economic growth, it is giving the private sector an increased role as the nation expands from its oil-dependent economy. Under the novel strategic plan, organizations in the private sector will be required to become more efficient in training, education and labor management. This has posed challenges like effective human resource development, managerial and skills development and structuring of closer private and public working (Ali, 2008). Government and private sectors have been required to work jointly to search for ways of overcoming shortage of skills and develop a reservoir of staff that will help to propel continued growth. This calls for application of effective business practices and policies, advanced technologies, maintenance of productive labour force and generation of a work atmosphere that will enrich and also promote the quality of human resources. A growing focus of UAE organizations is the establishment of training and education institutions for the development and promotion of key expertise and skills and thus the requirement in developing and identifying capabilities in human resources. This scheme is a portion of nationalization policy which implies the replacement of brought in foreign talent with the homegrown talent where possible. Employee retention is an innate challenge in Gulf nations because of high figures of expatriate workers. Majority of these foreigners see their stay as temporary posts of five years other than permanent career moves. Thus, human resource managers have difficulties in balancing the act amid encouraging the appropriate expatriates to stay and developing adequate local talents. In short term, retention of major expatriates might need extra spending on conditions packages and pay. Both countries face several challenges entailing future and current labor force (Mellahi, 2000). How UAE and Saudi Arabia HRM practice and policy benefit both countries Saudi Arabia can learn that expatriate human resource management is an aspect that should not be neglected while UAE can lean from Saudi Arabia that cultural values and attitudes of a diverse work force is important for employee motivation and retention. By learning and understanding that both local and foreign workforce, social cultural backgrounds and experiences are significant, Saudi Arabia and Dubai companies will be able to initiate high class human resource development actions and view human capital as the main asset in the changing worldwide business (Harry, 2007). Both UAE and Saudi Arabia economies are of limited competitiveness as a result of shortage of skilled and qualified workforce. By both countries learning the human resource policy and practices, they can be able to design a nationalization scheme that will ensure both local and foreign workers are visibly employed and effectively managed in spite of their cultural and social differences. They will also be able to engage their national human resource in employment and education whilst respecting Islamic and Arab tradition. Challenges that a manager working in Saudi Arabia will face in trying to develop his managerial skills in UAE Rowe and Gardenswartz (2002) note that the United UAE human resource management is facing challenges in the shortage of knowledge and national resources and the reliance on huge numbers of foreign workers and companies to fill national knowledge skill gap and implementation of determined economic development goals. In the part, UAE was capable to afford reliance on foreign workforce due to plenty of financial resources and greater incorporation in the international economy. Nevertheless, recent conditions have changed due to shrinkage of budgetary allocations human resource development, main expansion projects and the need for workforce nationalization. A human resource professional from Saudi Arabia will find it hard to develop his career in UAE because the human resource policies and practices are different from those of Saudi Arabia. While Saudi Arabia HRM are influenced by socio- cultural factors, UAE HRM practices are influenced by the high number of foreign workers and the need to develop and manage local workers( Abdelkarim, 2002). Conclusion Both UAE and Saudi Arabia are facing human resource management related challenges. Since these two countries have a diverse workforce of both local and foreign workers, human resource professionals are required to put more emphasis on workforce diversity to ensure attraction and retention of diverse talents. Therefore, human resource managers are supposed to be mentors, coaches and strategic partners who will ensure retention of personnel and developments of talents that will promote organizational competitiveness. References Atiyyah, S, (2002). Expatriate Acculturation in Arab Gulf Countries. Journal of management development, 15(5), 37- 47. Mellahi, K., (2000). Local workers in Gulf Co-operation countries: Assets or Liabilities. Middle Eastern Studies, 26 (3), 177-191. Wood, T., & Mellahi, K., (2001). Human resource management in Saudi Arabia. London: Routledge. Abdelkarim, A., (2002). Change and Development in the Gulf. New York: Palgrave Macmillan. Budhwar, P., & Mellahi K., (2006). Managing human resources in the Middle East. London: Routledge. Yang, G., (2002). Human resource management practices in the UAE private sector: patterns, evaluation and challenges. Dubai: Tanmia, Centre for Labour Market Research & Information. Bono, S., & Jones, S., (2008). Managing cultural diversity. California: Meyer & Meyer Verlag. Ali, A., (2008). Business and management Environment in Saudi Arabia: Challenges and opportunities for Multinational Corporations. New York: Taylor & Francis. Harry, W., (2007). Employment creation and localization: the crucial human resource issues for the GCC. The International Journal of Human Resource Management, 18, (1), 132.  Rowe, A., & Gardenswartz, L., (2002). Managing diversity: a complete desk reference and planning guide. New York: McGraw-Hill Proffesional Read More