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UAE – An Expat’s View of Prevalent HR Practices

Murad Salman Mirza
Dubai

UAE is a fascinating country with a rich culture that has managed to sustain a strong country brand over a number of years by creating a delicate balance between the Eastern and Western living styles. It strives hard to satisfy the whims and desires of a global community that is magnetized by its tranquility and prosperity in a precarious region. Contributor Murad Salman Mirza

The tourists land here with high expectations of unfettered entertainment, the professionals arrive with dreams of earning a comfortable living and businesses strive to establish a solid footprint to benefit from its position as a regional hub.  This has resulted in a disproportionate number of expats as around 10% of the total population are UAE nationals (http://worldpopulationreview.com/countries/united-arab-emirates-population/).

Such a cosmopolitan environment also gives rise to varying expectations of working standards and comparisons are invariably done by the expats in terms of assessing the value gained from working in the UAE than pursuing careers in their home countries.  This article will take the readers/potential job seekers in Dubai on a journey of discovering some of the prevalent HR practices that can surprise and demoralize expats if they are not prepared to embrace them in advance.  Let’s begin…

Recruitment & Selection
Two types of contracts are allowed in UAE, i.e., Fixed Term and Unlimited.  Most of the employment contracts are fixed term, especially, within the local and regional businesses.  Generally, they are for the duration of 2 years with an ‘extension/renewal’ option.  The recruitment industry is swarming with headhunters/recruitment agencies who try to woo the best candidates for their clients on the basis of precisely scripted job descriptions, which can include specific preferences that might be considered discriminatory in other countries, e.g., gender, nationality, language, etc.  Relevant HR technology, e.g., Applicant Tracking System (ATS), online psychometric tests, etc., is used by the more sophisticated enterprises to streamline their recruitment processes.  Their clients come in at the selection stage after a suitable list has been forwarded to them.  Recent drive for cost savings and reducing the size of HR has incentivized most companies to engage outside help for hiring, however, large companies still prefer to do their own talent acquisition with some of them having formal assessment centers.

Employment Law

The legal framework governing the employment contracts is not very comprehensive and is primarily concerned with the basic administration of the contractual relationship, e.g., nature of contract, compensation & benefits timeframe and dispensation, schedule of leaves, dispute resolution, etc.  There are strict rules for staying with the same employer with penalties in place to discourage job hopping.  Bringing a family can also be an expensive proposition due to exorbitant fees and a stipulated sum of minimum salary to ensure affordability.  Certain professions, e.g., Hospitality, Healthcare, Teaching, etc., enjoy better perks, e.g., easier path for job switching, lower salary bracket for bringing family, health benefits, accommodation assistance, yearly return tickets, etc.  Labor courts are generally avoided by employees due to negative impact on career, excessive backlog of cases, exorbitant legal fees, language barriers and the uncertainty of desired outcome.

Organizational Dynamics
There is intense competition among different nationalities, especially, from different parts of Asia and Africa, to increase their own numbers within organizations since it increases their influence with the decision makers in terms of getting more lucrative salary packages and greater concessions in administrative matters.  However, this is not the case for western expats, especially, US. UK. Canada, Australia and New Zealand, who are routinely given the best privileges, which can be as good as the locals.  Attractive salary packages are used as an inducement for western expats to remain indifferent to the lack of ‘felt fairness’ element within coworkers from other nations performing similar jobs.  Organizational politics can be brutal as groups from different nationalities try to undermine each other in the hope of creating more opportunities for their own nationals.  This is also strategically done by ramping up their numbers within the talent acquisition function of HR to ensure that resumes/CVs from their nationals take precedence in terms of being forwarded and seen by the hiring authorities.

Company Culture

Multinational companies (MNCs) are generally the best organizations in terms of ensuring a conducive work environment that is galvanized by a set of stated core values as the basis for a cohesive culture under the watchful eye of the ‘corporate’ HR.  Local and regional companies are more likely to be influenced by the ‘cult-effect’ of their top leadership.  Cordial demeanor is expected from all employees irrespective of their grievances.  Aggressive outbursts are not tolerated and can be the cause for disciplinary action.  Unions or formal ways of collective bargaining are not allowed and generally seen as a threat to the ‘peaceful’ work environment.  Formal social gatherings for intermingling of senior management, especially locals, with employees are rare, although, some employee engagement activities are conducted at the functional level to foster a sense of team spirit.  Nevertheless, employees feel safer and comfortable in reaching out to their own ‘influential’ nationals since they ‘understand’ them and can empathize accordingly.

Financial Matters
All employees are expected to ensure that their financial affairs are in order since organizations rarely provide appropriate legal assistance or coverage in case of any problems.  Banking regulations require letter from sponsor/employer to open an account and monthly salaries are deposited in them accordingly.  Loans are given on easy terms and various incentives are available to embrace credit cards as a convenient means of transactions.  However, failure to honor payment terms can have severe penalties and people have been imprisoned and subsequently deported for being negligent in terms of their financial obligations, especially, when aggrieved parties file complaints to relevant authorities on dishonored checks.  Cash is generally the preferred means of business in riskier transactions.  It can be quite a challenge to hold back the temptation of engaging in excessive spending and risking default since there are so many lucrative shopping opportunities.  Nationals from countries with history of strong savings culture tend to fare relatively well in such a seductive retail environment.

Training & Development
Organizations tend to favor hiring talent who have the requisite skills to do the required job.  Further training and development is generally not seen as a productive investment, especially among local and regional companies, due to the prevalence of fixed term contracts and the propensity of job switching as higher skills are gained and better options become available in the labor market.  MNCs are again at the forefront of ensuring the availability of a dedicated, motivated and suitably skilled workforce.  Companies that do engage in such initiatives tend to use ‘golden handcuffs’ on their employees to stay longer with them by withholding certain benefits that are given to them upon serving an agreed amount of time.  Conversely, there are times when hefty training budgets are spent feverishly on ineffective, unsuitable or unnecessary training programs to ensure the depletion of the respective budget before the start of the new financial year since it justifies the functional budget allocation for future.

Performance Management
Formal performance management systems generally exist in large organizations with competency mapping done to ensure a visible picture of inherent strengths and weaknesses.  Key Performance Indicators (KPIs) are primarily used for monitoring, assessing and reviewing performance under the umbrella of Key Result Areas (KRAs).  However, performance appraisals can be deeply contentious since careers are made or broken during such activities and salary bonuses are at stake.  Relationships between supervisors and their team members are severely tested during the assessment periods.  Most of the companies prefer the yearly assessment of an employee’s performance with a defined criteria.  Ongoing assessments during the year are not common and employees try to embody a risk averse persona to ensure that their ‘report cards’ looks clean at the end of the year with a ‘pleased’ supervisor.  Career pathing is not a viable activity for majority of employees in most organizations since steady progression is limited or non-existent due to the preference for hiring locals/western expats in senior positions.  This also impacts the judiciousness of the performance management system and creates immense challenges for HR professionals involved in succession planning.  The maximum benefit an outstanding employee from other nationalities, especially, Asian and African, can hope for is a bigger salary bonus instead of a timely and well-deserved promotion.  Another aspect that exacerbates the respective situation is the practice of Emiratization (http://en.wikipedia.org/wiki/Emiratisation).

Conclusion
Working in UAE can be an exhilarating experience, however, one has to be mindful that the respective society runs with an undercurrent of conservative values and is apprehensive of its own national identity being eroded under the onslaught of expat talent.  Therefore, tread carefully and enjoy the ride while it lasts!