Introduction
Most of the countries in the GCC have relied on the importation of foreign labor to achieve its development goals and also reduce the overheating pressures on the issue of labor market. With the turn of years the years, job creation for GCC citizens has become a challenge and unemployment could rise in the coming years unless restructure and refocus the labor strategies (Gyton, 2016).
Reflection1
I believe that the countries in the GCC made a choice to import high rate of labor so as to achieve development objectives, which included the development of infrastructure and services that were largely required by urbanizing societies. In addition, the shortage in the size of the working-age national population in the region led to the reliance on short-term labor inflows, this assisted in meeting the labor market.
Reflection-2:
The falling labor productivity in the oil sector has been due to the reduction of prices of oil, therefore, in my opinion, the trend of falling labor productivity shows the presence of significant challenges facing the labor market in the GCC.
Reflection-3:
The labor market in the GCC reflects that the employment of the trained and skilled individuals is high compared to the untrained, especially during the year when oil business is booming. The HR focuses on the skilled labor due to the fact that their population is low in the region.
Reflection-4:
However, the HR departments have neglected aspect of the assessments of individuals, yet are a process that is directly related the labor market condition. Thus, it is important for the oil sector to employ highly skilled personnel that are capable of assessing the labor force in the organization.
Reflection-5:
Despite the importance of the knowledge that the oil industry has on labor markets and the economic situation of the region, generally they lack a holistic picture of the real situation, this is directly attributed to the high level of specialization that is required by GCC decision makers.
Conclusion:
For the finding I mentioned above, it is difficult to have a realistic assessment of the outcome of labor market condition that is related to the GCC, however, the economic crisis in the region has resulted to the shifting of the demand of the skilled employees to comprehend the role and functions of HR and also to handle the unique phenomenon described in the article.
Step 2: Based on the article (‘Labor market: HR to the fore as businesses hit ‘reset’). Identify five challenges faced by the businesses and HR departments in GCC as a result of the current macroeconomic situation and labor market conditions in GCC countries.
Business / HR Challenge-1:
There has been a challenge of finding skilled by the organization in the GCC countries, this is due to the fact that the large population in the region consists of unskilled individual, and thus the organizations are being forced to employees who are unskilled to occupy senior positions.
Business / HR Challenge-2:
The other challenge is lack of capital to improve the HR, as the prices of oil went down in the region, consequently the profits went down, and thus it was very difficult for these organizations to invest in the latest technology which required a huge amount of money so as to be implemented.
Business/ HR Challenge-3:
The other major challenge faced by business organization and the HR department is the GCC is that the oil business is very competitive; there are numerous companies in the industry competing for the existing scarce labor force. In addition, apart from the oil industry competing for the labor resources, other industries in the region are competing for the same resources.
Business/ HR Challenge-4:
The other challenge is handling the cost of employing individuals by the business; this challenge was as a result of the decrease of the prices of oil and the returns of the business. The organizations find it difficult to handle this cost due to lack of money to pay the worker.
Business / HR Challenge-5:
The other challenge is enforcement of existing regulations and laws that were set by the governments in the GCC region. It was difficult to implement these rules and regulation since they were seen to be complex and very opaque and most of them only applied to the public sector.
Step 3: Evaluate the effects of the challenges (presented in step-2) on the HR Strategies of organizations in the GCC
Effect-1:
The effects of challenge to the HR are clear, the shortage of skilled labor in the industry has led to the employment of the unskilled labor, and this has led to the reduction of performance of the labor force. In addition, the organizations in the industry are competing for the available labor force.
Effect 2:
Low productivity was as a result of lack of capital to improve the HR department, this led to poor performance of the organizations, consequently resulted in the decrease of the region’s economic performance due to lack of opportunity to generate and expand the labor force. In addition, this resulted in pressure for HR reforms in some organization
Effect 3:
There are several effects related to competition in the oil industry; for example, huge number of organization led to a reduction of the prices of oil, this in turn to the reduction of returns earned by the business. In addition, those business organizations that could not sustain competition were forced out of the industry.
Effect4:
Due to lack of money to pay workers and also employ new ones had negative effects on the HR strategies; it was seen that the HR department was strategizing on cutting down the number of employees in the organization; this resulted in a reduction of the performance output.
Effect-5
These deficiencies of lack of proper laws and regulation adversely affect the business organization in the region, in addition, the complex regulation scared away foreign investors, leading to low growth rate of the economies of the countries in the region. Consequently, it made it difficult for individuals in the region to sustain the living standards.
Step 4: Recommend five HR strategies to overcome the challenges identified in Step
Recommended HR Strategy-1:
Since there is a challenge of little labor force in the region, the HR should come up with proper medical treatment strategies for the employees, this will ensure those that the available employees are healthy and also improve on their productivity.
Recommended HR Strategy-2:
The organization should not forget the human in HR should be treated as assets, and it is always important to protect the firm’s assets, therefore, the HR department in an organization should come up with policies and practices that will ensure that the employees do not leave the organization.
Recommended HR Strategy-3:
The other recommendation is that the HR should also focus on foreign labor, sourcing employees from other countries will help to ease the pressure of less number of skilled labor force in the market. In addition, the HR should advise the government on how to improve on the foreign policy to make it easier to employ individuals from other countries.
Recommended HR Strategy-4:
The other recommendation is that business organization should ensure that they hire skilled personnel to handle the senior position; this will ensure that the labor force is properly managed and also guided to the right direction in achieving organizational goals. The skilled employees would be able to handle the changes in the organization.
Recommended HR Strategy-5:
Finally, the HR should be allocated funds, these funds could be used to handle the extra cost in case of any change in the future, in addition, and extra fund can be used by the management to implement new technologies in the HR department.
References
Gyton, G. (2016). Labor market: HR to the fore as businesses hit ‘reset’. PM Magazine.<http://www.cipd.ae/people-management-magazine/feature-articles/hr- businesses-hit-reset#>
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