Workforce Localization with the Need to Fine-tune HRM - Essay Example

WORK FORCE LOCALISATION IN EMERGING GULF ECONOMIES: The need to fine-tine HRM Report Student’s Name Instructor’s Name Course Title Date Table of Contents Table of Contents 2 Article Details 4 RESEARCH AIMS AND OBJECTIVES 6 RESEARCH METHODOLOGY 7 DISCUSSION 9 PAPER CRITIQUE 11 CONCLUSION 15 Reference List 16 INTRODUCTION The Gulf labour market is highly dependent on expatriate workers. Other countries in Asia and Middle East have localisation programs that are aimed at enhancing the participation of the local people in the labour market. The policies in these countries make the government and other authorities to embrace firms that employ the local workers as opposed to those that heavily rely on foreign employees. The argument behind these policies is not solely to ensure that the local people have jobs but also to enable them to be able to develop skills which make them better qualified to hold jobs in the market (Harry, 2007). The existence of these policies has only had an effect in the public sector and has failed to produce any appreciable results in the private sector since the decisions regarding employment are mainly made by foreigners who favour the expatriates since they are highly skilled and suited to enable the businesses meet their objectives. A review of literature indicates that some countries such as Saudi Arabia have even coined the name “Saudization” to mean localisation of work as represented by government policies. In Saudi Arabia for example, the localisation policy has been in effect for nearly two decades and has had the full support of the government. Numerous researches have been carried out on the effectiveness and success of these localisation policies. This paper aims at reviewing one research article about the localisation in emerging Gulf economics. The paper focuses on localisation in the GCC context and excludes the efforts of establishing localisation in other parts of the world. Throughout the paper there will be a review of the research aims, objectives and methodology which will again be compared with other research on the same areas. Where differences of opinions are held by different scholars, citations and references will be made. At the end will be able to give a conclusion as regards the issues in question. Article Details Author’s Name: Ingo Forstenlechner Title of article: Workforce localization in emerging Gulf economies: the need to fine-tune HRM Title of journal: Personnel Review Volume number: Vol. 39, Issue 1 Dates: Accepted 15th January, 2009; Published in 2010. Page numbers: 135- 152 Problem statement: For workforce localisation to be achieved it requires an input of relevant HR practices. The paper seeks to address the issue of localisation during recruitment and through to retention. LITERATURE REVIEW The focus of the paper is localisation in the context of the GCC. Localisation in these labour markets has been for many years focused on the both public sector and other government enterprises making the efforts to be similar to those that are seen in other labour markets around the world. The GCC has however in the recent past shifted its attention towards the private sector. The research implies that this is unique to the GCC. Harry (2007), states that this is however not the case as other nations that have for long had the localisation policies in place have realised that there is a need to shift the focus towards the privately owned firms. It is agreed however that the citizens of these nations have less economic pressure that would push them to seek employment. This is what makes the GCC market work force integration to be a unique case. Scholarly works have shown that there is indeed underrepresentation of the Middle East localisation programs. Recent scholarly works in the GCC focus on many aspects of the localisation policies from the government survival in the face of these policies to the legal implications of the policies in the private sector and other policy makers. The question of the role of HR in the localisation of work is of importance as it plays a central role in the business operations. There exists a big deficiency in terms of the available literature focusing on the implications of localisation on the main HR practices on any company that operates in this region and seeks to establish a sustainable localisation initiative (Achoui, 2009). The region’s population is shown to be mainly consist of expatriates who have purposely come to work. This may not always be the case as there are others who entered the region with the aim of offering humanitarian aid to the nationals of these countries. The entry of the expatriates into the region was mainly motivated by the fact there was a need to transform the countries to be at par with other parts of the world since the local people lacked the necessary skills that could be of use to enable the region to realize such a goal. There are many expatriates who constitute a very high percentage of the workforce. The situation is bound to get worse with time as indicated by the many researches that have been done in the region. The nationals in the region are less skilled to qualify for the jobs on offer. This has to lead to lack of incentives that could encourage the nationals to participate in the labour market. The situation is further complicated as the private sector is mainly bent on resisting the implementation of the localization policies. From the experiences it has been noted that a hard push by the government leads to implementation of the policies on a lower scale. RESEARCH AIMS AND OBJECTIVES The research aims at identifying and recommending changes that will help establish better HR practices in order to ensure that there will be successful localisation by different organisations with minimal effect to the existing environment within the institutions. The paper seeks to establish the government attempts towards the realisation of the localisation of the workforce identify the problems resulting from the approach used and form the information obtained, identify changes in HRM practices that will enhance the chances of an organisation being successful in realising localisation. Unlike other research that had been done before, the focus of the paper goes beyond analysis of the labour market, the rationale behind the idea of localization and the specific HRM aspects to create a comprehensive outlook of the HR practices enabling the players in the sector to identify areas that they need to institute changes such as selection of workers during recruitment, review of the existing reward systems and the training needs that will emanate with the localisation of the work force. The research also aims at broadening the scope of localisation to include political aspects of localization given the political nature of the matter and the implications it would have on the political spheres. The aim of the study is to establish guidelines that can be used within the existing systems and not solely seeking alternatives to the issue. The context here in is held to include the factors that have an effect on the employment of the locals such as the increasing education level of the local people and the improvement in work experience of the locals. RESEARCH METHODOLOGY The data used in the research was obtained by conducting both face to face and semi-structured interviews. The method was chosen since studies have shown that research subjects in many developing nations have a preference for face to face interviews over other data collection method. The use of semi-structured interviews were preferred since it would allow for a degree of flexibility in gathering more insights from the subjects. The semi-structured interviews were focused on management commitment and the HR practices implication. These interviews also sought to find out the effect of integrating HRM within the strategic changes in management. The sample size constituted 52 professionals. Twenty nine who were approached consented to participate following which 25 interviews took place with each averaging between 45 to 75 minutes with an assurance that they will remain anonymous. These interviews were recorded then transcribed and coded then topical analysis was conducted. The coding that was done by two research assistants produced a high matching and the ambiguous percentage was coded by the principal researcher with the research assistants. Seven of the interviewed professionals requested that they should not be quoted directly. Previous researches on localisation have been carried out using a variety of methodologies. Most researchers draw the sample from HR and other management professionals in the particular area of study. Some researchers favoured the use of questionnaires which contained both closed and open ended questions which focus on the real work environment (Muysken, 2006). The open ended questions are strategically included so that more information could be captured from the participant. The researches screened the data that was collected for any anomalies. A review of previous researches also brought out a variety of findings that did not deviate from the research we were reviewing. Many research indicated that HR aspects of any organization have a huge bearing on localisation. Research has also shown that the success rate of localization was highest in the petrochemical economy sector as compared to other the industries such as electronic, motor, real estate, manufacturing, hotels, food and manufacturing. The researches indicate that the high level of expertise that is required for one to work in these industries could be the limiting factor in any attempts at localisation. The data used in the research were obtained from one country. The author argues that this does not create much of a problem. It is important to note that this makes the applicability of the findings in other countries rather problematic given that the approach of localisation varies from one country to the next. The use of few interviewees in the study creates a room for agreement rather than have varying results to draw conclusions from. This gives the findings more of a textbook approach rather than give solutions based on practical issues on the ground. This can lead to the researches failing to conduct the research to the end as a temptation to extrapolate the results based on the patterns is high. Racism was seen to have a bearing on the responses of the interviewees. The paper also misses to bring in the major changes in human capital which is ever dynamic and could have a bearing on the findings. The fact that the research was done in a region where organisations lack full autonomy over their operations, was also identified as one of the limitations of the research. This is agreeable given the political atmosphere of the country has a bearing on the organisations operating in the country and the localisation approach used by these organisations. DISCUSSION In the discussion the research states clearly that as a result of the study there has been a broadening of the understanding of the implications of localisation in relation to HR aspects. This is a clear indication that the research has met its objectives. The discussion also includes issues that need more research in the future so as to shed more light on the issues that affect localisation of the workforce. The research identifies deficiencies in enabling employers to appreciate the rationale of localisation from the business point of view, the issues on stereotyping and other issues that regard balancing education expectation and the reality on the ground. When considering the issue of selection and recruitment, the research indicates that to achieve localisation, lowering the requirements for employment should not be the approach used. This is however the method used by many organisations operating in the region which creates an environment that supports the existing stereotypes. Lowering the standards may prove to be costly to the organisation in terms of money, time and human capital. The issue of approaching the matter from an academic point of view was also researched and it was clear that offering training for the nationals offers the best way of ensuring that they qualify for the jobs available and that they will be retained in the positions since they are more likely to produce good results, facilitating the process of localization. The issue of retention is indicated as an undervalued element of employment. There is little commitment towards corporate culture and hence employees on career paths have failed to secure employment. The rationale for localisation in the GCC has been identified as being compelled by economic, political and social issues. There is a clear identification of the factors that cause slow adoption of localisation. One of the major factors is the perception that localization is a form of taxing the organisations and which offers no benefits for the organisations even if they comply. This is in line with other research findings which had indicated that localisation is offered not on the business values that focus on the employee performance but as a matter of compliance to the existing government policies. Another hindrance to localisation that is brought out is the fact that organisations have not given the matter the attention it deserves. The only attempts at localisaion is seen as the organisations seek to include the nationals into the workforce with the intention of only saving the organisation’s face in the media and other government watchdogs. The study indicates that this has been the technique employed by the organisations to protect them from facing the consequences of failing to comply with localisation policies which may amount to sanctions. The research proposes that companies should be able to integrate localisation policies that have been tested and proven to be successful in other organisations and the focus should also not only be on the mere percentages of the locals holding the jobs in particular organisations but also on the retention of the employees and the promotions given based on basis of competition. The HR processes in the organisations should be adapted to the local culture for the localisation policies to have an effect. From the research it is well indicated that there is uncertainty as regards to localization in the GCC. This is as a result of continued education of the locals which in the long run is bound to enhance the chances of securing employment opportunities and retaining the job once acquired. The discussion fails to articulate the need to stem out the practice of ghost workers for the sake of giving a face of compliance in the light of the media. The research does offer a great way of solving the localisation menace by referring to the Dubai case where the most profitable sectors of the economies such as the airline industry, telecom industry, the banking industry and the insurance industry are owned mainly by the local government rather than relying on private investors who are keen on seeking business profitability rather than offering employment to the local people. The government agencies that own the firms in these industries have been proven to offer services and at the same time ensure that the local people have obtained the necessary skills to enable them acquire other related jobs. PAPER CRITIQUE The title that the writer has chosen is very appropriate as it brings out the elements that the researcher wishes to research on. The title gives a clear indication on the area of focus of the research which is the Gulf economies. The title is also specific in that it brings out that regarding localisation, the aspect of focus in the paper is the human resource management. It is however not appropriate to use abbreviations which are not standardised such as HRM in the title, to represent Human Resource Management. This is bound to create confusion as the initials HRM may mean something else in a different academic field and may vary with languages. This is risky as it limits the people who can read the research due to lack of title appeal. The abstract is very specific and is a clear representation of the article. In the abstract, the purpose of the research paper is set out clearly. The abstract indicates the purpose as one of seeking to identify the relevant HR recommendations to aid in workforce localisation in the GCC. The Design and the methodology used to obtain the data are clearly stated. From the onset, one is able to identify that the collection of data was mainly through semi-structured and in-depth interviews. The abstract also states that the target people included HR managers from both the public and the private sector. From the abstract one is able to identify the findings early on and this could even spur more desire to read the whole research paper. The abstract also feature the limitations that the researcher experienced and the bearing these would have on the research paper. In the abstract the implications of applying these findings are clearly outlined which is an easy way of making the reader be able to identify whether the research would be of any use to them. The originality of the research is also clearly indicated giving a clear indication that the research has not been carried out before and hence it has new information to offer. A combination of these factors gives the reader a glimpse of the research paper and hence creates the desire to read the paper. The purpose of the article is made clear in the introduction part of the paper. From the introduction the research paper brings to our attention the state of localization in the different parts of the world. The research builds on this to establish the needs that have not been covered by previous research papers. Once the needs of the Gulf economies in terms of localization are established, it becomes apparent now that there is need to do more research. It is at this point that the purpose of the paper is clearly stated as one which is intended to cover the existing gaps in the implementation of localization while focusing on the different HRM aspects in different institutions. There is however the need to indicate clearly the aspects of HRM that the research is intended to cover. This because HRM is a very wide field and it is not practical to cover all its aspects in one single research otherwise the research will risk being deficient in addressing these aspects of HRM. The research uses a very appropriate study design and methodology. The research indicates that the use of face to face interviews has been proven to be very effective in the regions that are similar to the one that the research is being conducted in. The research also makes use of semi-structured interviews to enable better data collection. This is an effective way of ensuring the subjects are able to give more information that could have easily been missed if in case the data could have been collected using methods such as close-ended questions. The use of recordings to collect the data then transcribe it later ensures that data is not lost during the research. The discussion in the paper is very relevant. The author’s statements are clearly put and the arguments supported using relevant citations to give the issues academic validity. The discussion puts into perspective the various issues that the research findings bring out. The discussion focuses on how to resolve the localisation issue with the focus being the HR aspects of the organisations. The research also goes ahead to identify areas where localisation has been successful and how it would be of necessity for the government to play a major role rather than just issue policies. The motivating factors for localisation in the GCC have also been identified. The discussion does well to offer areas that should be the focus of research in the same area, which is beneficial in offering guidelines in increasing the needed knowledge to help merge localisation and academic approaches to the matter. There is a failure in the discussion to accurately articulate the fact that despite some countries such as Dubai being able to use the locals in the main industries through direct government participation, there are business profitability issues that arise from the same (Achoui, 2009). This because profits are as a result of business output which is directly correlated to the skills of the employees. Given that the local people have lesser skills as compared to the expatriates, there is an increased reduction in the output of these industries and consequently reduction in profitability. In discussing the issues in the research, the author has done well to try and maintain a level of objectivity. This indicated by the fact the author has used reliable evidence to support the issues brought out. The comparison of the research with other existing bodies of knowledge is a clear indication that the author wants to represent the facts as they are on the ground in order to build on the existing body of knowledge. There is need to expand the areas of discussion especially as regards the aspects of HR covered this can be well achieved by reviewing more literature on the same area that has been published before (Harry, 2007). The use of more examples detailing the role of HRM in the localisation is very necessary so as to offer more reliable approaches to the matter. There is also the need to add more comparison of the approach of localisation using other methods other than HRM approaches which would be more effective in bringing out the picture of the importance of using the HRM approach to the issue. The research also needs to clearly illustrate how the inconsistencies in data were handled since this is critical in enabling to enhance the credibility of the research findings and to enable create confidence in using and adopting the proposed approaches. This is because the importance of doing research is not only to get done with the work but it is also to provide a new form of knowledge that can be used in real life situations (Muysken, 2006). CONCLUSION The paper has covered the areas of HR in great detail and managed to bring out the areas that need more research. On reading the paper one is well convinced that it is possible to realise localisation of the workforce. The role of HR in realising this goal is well illustrated in the research paper. The methodology applied was well chosen and supported with evidence from research work from previous work. It is important to note that like many other research it is not possible to reach perfection since there are factors that beyond the author. The author also does well indicate the challenges that were faced during the collection of data and how the problems were overcome. When discussing the findings the author avoids giving personal opinions on the matter. Citations are important in order to give academic credibility to the arguments of the author. Reference List Achoui, M. M. (2009). Human resource development in Gulf countries: ananalysis of the trends and challenges facing Saudi Arabia. Human Resource Development International , 12 (1), 35-46. Forstenlechner, I. (2009). Workforce localization in emerging Gulf economies: the need to fine- tune HRM. Personnel Review, Vol. 39, Issue 1, p. 135- 152. Harry, W. (2007). Employment creation and localization: the crucial human resource issues for the GCC. International Journal of Human Resource Management , 18 (1), 132-146. Muysken, J. N. (2006). Deficiencies in education and poor prospects for economic growth in the Gulf countries: the case of the UAE. The Journal of Development Studies , 957. Read More