The Impact of Economic System on Human Resource Management Practices in Dubai

30 Dec 2019

The Impact of Economic System on Human Resource Management Practices in Dubai

Business success depends on human resource management (HRM), which includes policies, practices, and systems. However, these HRM practices vary based on national context and geographic location. The economic system practices will have a certain impact on the ways in which organizations regulate their HRM, economic and social development. According to research, all aspects of an organization's behaviour, including HRM practices, are subject to its institutional context. 

The economic growth of the UAE is high compared to other GCC countries, majorly because of the tourism industry. Moreover, the Expo 2020 in Dubai is expected to take the economic growth to the next level. The HRM challenges in Dubai are special as the ratio of nationals to expatriates is the most disproportionate in the world with nationals being fewer than 20%. This disparity is even more evident in private divisions, where almost 99% are exiles. Therefore, the businesses operating in Dubai have to cope with certain challenges while managing work and employment relations. 

Economic System Impact on HRM Practices

Recruitment and Selection

Though companies follow international standards to recruit expatriates, the way they recruit UAE nationals is unique, which is through personal relationships and affiliation to particular tribes or families. Most of the companies and human resource consultancy in Dubai acknowledge the governmental recommendations and give priority to UAE nationals. The Absher initiative by MOHRE is aimed at enhancing the skills and participation of UAE nationals in the labour market. This will create more opportunities for locals and eventually boosts the national economy. 

Training and Development

The training and development is a crucial HRM practice, which companies are encouraging nationals to develop their skills. Companies also investing in training and development through recruitment consultants in Dubai for expatriates; however, this training is for immediate organizational needs. But for nationals, the training is for long-term benefits. The government also supports the development of nationals in higher education, graduation, and post-graduation to become a talented Emiratis and contribute their skills to economic growth.

Performance Management and Compensation

Performance management of individuals is challenging but can be achieved easily with the help of Dubai recruitment companies. Few companies approach distinctively while compensating nationals and expatriates. If the businesses are witnessing significant growth because of the growing economy, then the compensation will also be high.  

According to research, government companies determine the way in which HRM is structured and organized. The national business system theory recognizes that the authoritative nature of employment relations, segmentation and specialization of tasks, roles, and skills, and centralization of coordination and control system are crucial to determine the HRM practices in Dubai. 

Though the employment policies are favourable to UAE nationals, employing expatriates creates flexibility and opportunities for diversification in private companies. Therefore, firms are recruiting talent from the international employment market with the help of human resource consultancy in Dubai. This will also minimize the investments involved in the training and development of nationals by recruitment consultants in Dubai. Moreover, the firms are focusing on developing job security policies for expatriates because these expatriates also contribute a major part to the Dubai economy.

The companies are structuring and organizing HRM practices with strategic objectives to ensure future growth and development of the organization as well as the country's economy.

Greenland Human Resource Consultancy in Dubai is a leading recruitment agency connecting employees and employers with the right opportunities. We are one of the topmost Dubai recruitment companies who offer end-to-end employee training and development programs to streamline your day-to-day operations. We are also known as the best recruitment consultants in Dubai for helping companies with exceptional performance management strategies.

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