The Turnover in the Saudi Labor Market in the Hotel Industry - Research Proposal Example

Name: XXX Tutor: XXX Title: PROPOSAL: The Saudi Labor Market: The turnover in Saudi labor market in the hotel industry is higher than other industries in the private sector Institution: XXX Date of Submission: XXX The Saudi Labor Market: The turnover in Saudi labor market in the hotel industry is higher than other industries in the private sector Introduction This research proposal explores the hypothesis that turnover in Saudi labor market in the hotel industry is higher than other industries in the private sector. Saudi Arabia which is well known for its large oil reserves, expatriates have contributed greatly to its economy after the discovery of oil. Saudi Arabia depended largely on foreign labor for development. The huge oil proceeds earned by Saudi Arabia were utilized in investing within its infrastructures to achieve the objectives of modernization and development. The scarcity of investment within youths maintained a constant dependency on expatriate labor (Alotaibi 2007). Even though enormous investment has been made in education as well as training, the supply of skilled local labor is still below demand. Because of population changes there has been increase in unemployment rate and as a result Saudi Arabian government has been under pressure to contain nationals within both private and public sectors (Alotaibi 2007). To meet this challenge, Saudi Arabian government has implemented policies within its national plans aimed at “nationalizing” the labor. The substitution policies the government has implemented were freely adopted by organizations at the early phases and have increasingly become obligatory within some industries (Janardhan 2010). Research Background With the past few years, the hotel industry of Saudi Arabia has developed to become one of the key backbones of the local economy. The availability of varied product as well as the particularly regular markets of Makkah and Madinah and within the recent years of Jeddah and Riyadh has enabled hotel industry in Saudi Arabia to progress rapidly and efficiently as well. With adequate room capacity in place, hotel industry in Saudi Arabia is currently geared to meet all the demand of local and international tourism. Recently, there has been substantial rise within four and five star hotels because of the high demand of hotel services and facilities they provide which consist of first class international hotels and health resort amenities as well. The other key reason for the remarkable rise in hotel industry is the scarcity of comfortable high end international hotels within Saudi Arabia (Alotaibi 2007). The number of hotels in Saudi Arabia in 1999 was 425 with capacity of 41,028 rooms. On the other hand, in 2007, there were 1,209 hotels in Saudi Arabia with capacity of 185,000 rooms. Basing on the 100% occupancy, the present hotel room capacity within Saudi Arabia is sufficient for more than 67.5 million occupants’ nights (Said 2011). In addition, taking that every room can accommodate at least two people, the standard capacity of hotel rooms within Saudi Arabia is enough for about 135 million occupants’ night; this can effortlessly cater for Saudi Arabia citizens numerous times over. The ministry of finance and National Economy is greatly responsible for proliferating the accommodations infrastructure, offering loans up to 50% and constructions of hotels. Due to incentives from the government, many hotels have been constructed within Saudi Arabia and this has brought about many hotel jobs in Saudi Arabia (Said 2011). Stimulated by governmental large scale infrastructure developments, rationalized business dealings, religious tourism in addition to thriving business travelers & MICE sector, Saudi Arabia has surfaced as one of the most attractive markets for foreign direct investment in hotel industry. Saudi Arabia’s key cities of Riyadh, Jeddah along with Dammam have numerous hotels ranging from three stars to five stars. The Saudi Arabia hotel market is segregated in four areas – Makkah and Jeddah, Madina, Eastern Region and Riyadh. Additionally, in order to improve quality, in a classification system for furnished apartments and hotels was introduced. Saudi Arabian nationalities are one of the main spending people during travelling but progressively more the trend has moved to stay at home holidays. As a result, this has provided a key incentive to the hotel industry particularly in areas like Jeddah and Riyadh (Said 2011). Literature Review According to a study performed by Alsini (2007), on Saudi-isation within the hotel industry, whereas high oil prices are sustaining development within Saudi Arabia, Saudi Arabian authorities are aware that it is necessary to diversify the economy and enhance the skills base, focusing on human resource issues. The trend towards capital repatriation to Saudi Arabia is supposed to assist in boosting inward investment in addition to creating more jobs. For a long time, Saudi Arabia citizens were not worries about unemployment (Bell 2005). At present, joblessness among Saudi citizens and the higher rates of labor turn over within Saudi Arabia have turned out to be key problems. As a result, substantial investments are needed to meet the requirement of the increasing population and joblessness (Alsini 2007). The replacement process of foreign by national employees has been referred to as “Saudi-isation and it is one of the ways the government is using to prevent joblessness crisis. There are about six million foreigners working within Saudi Arabia where the expatriate employees are from developed and also developed nations comprising almost one-third of the total population. This has led to a “lower equilibrium salary” that prices numerous Saudi Arabian citizens who often seek higher wagers, out of the market. The involvement of Saudi Arabian citizens within the labor market is less than 25% and the Saudi-isation program is aimed at reducing foreign employees to less than one-fifth of the labor by 2013. The government is extremely aggressive in reducing companies that are not aggressive in employing Saudi Arabian nationals (Wong 2010). The hotel industry in Saudi Arabia has been impacted by the Saudi-isation program. It relies mostly on three classifications of customer: pilgrims, local tourists in addition to foreigner tourists. Normally, they get accommodation within hotels on serviced apartments. According to MAS (2007) the growth rate of the number of rooms within hotel industry has been estimated to be about 4-6% annually and the room occupancy has increased too. Expatriates from twenty various nationalities occupy about 80% of the labor within the hotel industry. According to a research performed by Sageeni Centre for Economical & Administration Consultancy in 2005, 56% of the labor force within Jeddah was working within hotel industry. The research further indicates that 96% of the workers in hotel industry lack qualifications within hotel industry and 88% of them were working within various fields that didn’t match their skills. The Saudi Arabian government set up Human Resource Development Fund, which is a support fund aimed at encouraging employment and for supporting jobless Saudis to take part within the private sector (Janardhan 2010). The social and cultural practices of Saudi Arabia indicate that Saudi Arabians have the ability of taking part within hotel labor force since they are kind, compassionate and honest within their dealings. They uphold their ancestral values in their daily life which entails being generous, respecting elders and being kind to the younger ones, forming the basis for quality of life. However, the social obligations may cause intricacies in meeting job obligations devoid of high non-attendance. Nonetheless, these social values make Saudi Arabian nationals highly liable for working within hotel industry (Booth & Hamer 2007). Workforce in hotel industry and Saudi-isation The hotel industry in Saudi Arabia is labour and capital intensive as well. Employment is significant in creating jobs and also in offering gainful employment opportunities. In Saudi Arabia there has been focus on management to enhance organisational performance in order to respond efficiently to market demands. According to Cho (2006), management practices that are crucial in improvement of organisational performance comprise of turnover rate along with labour productivity. The Saudi-isation program greatly influences human resource practices and people’s work values (Janardhan 2010). The Saudi Arabian hotel industry is characteristically “fairly receptive to trends within the broad economy (Wong 2010). During planning and managing the best level of human resources with the suitable skills, hotel management have a major task in regard to present labour market dynamics. Wage costs and demand are affected by supply limitations due to availability and disparities in skill levels. Jameson (2008) explains that one of the key roles of human resources is to manage organisational culture in order to attain employee commitment, recruitment and selection is often perceived a fundamental in attaining culture change and commitment of the workers. Most organisations utilise psychological methods in selecting personnel who will conform to the present or targeted commitment culture. Employers within the service sector use unstructured interviews usually carried out by unqualified interviewers and the common accord is that: selection within the hotel industry is unofficial, simplistic and reactive”. Consequently, this has simplified recruitment process in hotel industry as compared to other private sectors where recruitment process is not as simple. This has led to employment of less qualified workers within hotel industry (Janardhan 2010). Objectives of the Study Main objective 1. To investigate the turnover in Saudi labor market in the hotel industry. General Objectives 2. To investigate the effect of the Saudi-isation program on human resource practices within hotels and explore Saudi Arabian’s work values. 3. To investigate how the management within hotel industry recruits, employ, train and treat fairly the Saudi Arabian national is important in evaluating Saudi-isation within the hotel industry. Research Questions 1. Why the turnover in the hotel industry is higher than other industries in Saudi labor market in Saudi Arabia? 2. Is the turnover in the managerial level or in the operations level? 3. Is Saudi workforce developing to the managerial level in hotels? Study problem Recently there has been notable unemployment among Saudi Arabian nationalities and hotel industry which is thriving, and hence needs labour can play a major role averting this problem. Research significance This research study derives its significance from the recent growth of hotel industry within Saudi Arabia which has turned out to be a major source of employment in Saudi Arabia. The Saudi Arabian government has implemented policies within its national plans aimed at “nationalizing” the labor and this has greatly impacted hotel industry. The significance of the study also comes from the need to have the hotel industry in Saudi Arabia implement effective and practical managerial and recruitment processes. Research hypothesis H1: The turnover in Saudi labor market in the hotel industry is higher than other industries in the private sector H2: Most of the managerial levels in hotels are foreign as a result, they do not support Saudi employees for development them: The managements of hotels avoid the Saudization programs Research Methodology Study Sample The study will investigate eight three-five star hotels within Saudi Arabia, namely, Hilton Hotel, InterContinental, Holiday Inn Express, Kempinski Hotel, Golden Tulip, Westin Hotel, Le Meridian Hotel and Rosewood hotel. The study will obtain data from the management and employees of these hotels and it will include both the expatriate and local employees. Research Design This study will employ exploratory case study research design. This is because it allows the individual subjects under study to be investigated. Qualitative research approach will be adopted whereby semi-structured questionnaires will be administered to the subjects under study and some data will be collected through interviews. Observation will be also be used to examine, assess and analyze the available resources. This will be done using observation check lists. Already Existing data about hotel industry in Saudi Arabia will also be important because it will also be utilized to add up on the data being presently recorded (Matthews 2009). Research Instruments Data will be obtained by use of self administered structured and semi-structured questionnaires. These will have questions on labor market in hotel industry in Saudi Arabia and any other information related with hotel industry in the country. Telephone and online interviews will also be used hand with call back cards to collect information on subjects that are not easy to access. Observation check lists will also be administered to collect data on through observation while the existing data will be used to add up more information on the data being collected (Li & Zhao 2008). Data Collection Procedures Data will be collected by use of semi-structured questionnaires that will be administered to the subjects who will be managers and works, both expatriates and local workers from three-five-star hotels within Saudi Arabia, to respond to and also through face-to-face and telephone interviews. This will be carried out with the help of trained research assistants. Observation will be also be used to collect data on the available resources through observation check lists (Li & Zhao 2008). Data Analysis Methods Data obtained from fieldwork consisting of questionnaires and interviews information will be entered in a computer spreadsheet. SPSS will used in analyzing quantitative data to generate frequencies, means, standard deviation and computation of inferential statistics (Matthews 2009). Ethical considerations Research permit will be sought from the relevant management from the hotels under the study. Mutual agreement/ consent of the subjects will be sought by explaining the purpose of the study. Confidentiality will be maintained by ensuring no received information from the subjects under study is disclosed to unauthorized people except to the team implementing the study. Only the necessary data will be collected and used for the purpose of the study (Matthews 2009). Bibliography Alsini, I., 2007, Saudi-isation in the Hotel Industry: Opportunity or Challenge, University of Surrey, Surrey. Alotaibi, H., 2007, Unemployment Jumped to 12%. Okaz. Booth, S, & Hamer, K., 2007, Labour turnover in the retail industry: Predicting the role of individual organizational and environmental factors, International Journal of Retail & Distribution Management, Vol. 35/4. Cho, S., 2006, Perceptions of distributive and procedural justice in employee benefits, Journal of Human Resource Management, Vol. 6/3. Janardhan, N., 2010, Expatriates face a changing reality in Gulf countries, The Daily Star. Jameson, F., 2006, Human Resource Strategies and Organisational Performance, Journal of Human Resource Management, Vol. 19/1. Li, K, & Zhao, X., 2008, Asymmetric information and dividend policy, Financial Management, Vol. 37/4. Matthews, G., 2009, Research Techniques, McGraw-Hill, New York. Said, A., 2011, The Saudi Hotel Industry, NCB Economic Department, Makah. Wong, R., 2010, Turnover takes a turn for better, Business Management, Vol.18/3. Read More