HR Strategy for Labour Market Conditions - MyAssignmenthelp.com

Question: Discuss about theHR Strategy for Labour Market Conditions. Answer: Introduction The study focuses on the reflection of the labour market of the GCC countries as well as the macroeconomic condition of the organizations present in those countries. The self reflection of the article will describe many things such as organizational structures, HR challenges, issues that will hit the practice of the HR strategies. It will also describe about the internal and external business environment of the companies present in the GCC areas and the MENA region. However, after pointing on the issues and challenges of the companies, recommendations are also provided in order to mitigate the risks associated with the companies in the region. Current Macroeconomic Situation and Labour Market Conditions Macroeconomic Conditions: During the year of 2015, the workforce investment and the rate of market stabilization are low while the countries loss more than $340bn in terms of revenue. It can be seen that more than 40% of the companies in the Middle East are restructuring them in terms of focusing on three aspects of budget optimisation, efficiency and nationalisation. The reduced prices of oil in the year of 2014 created a significant impact on the slowdown of the demand and the reduced liquidity. All these effects are caused due to the impact of the global financial crisis It affects the hospitality, retail, tourism, manufacturing and oil natural gas companies. The GDP of Abu Dhabi falls from 4.4% to 1.7% in 2015. Labour Market Conditions: The rate of unemployment has been increased up to 11.6%. The recruitment rate of the government and the private companies is reduced in havoc amount. The hiring of middle level managers are restricted by the government as well as private organizations. As the GDP is falling down, hence, there is slower rate of recruitment of different employees of various organizational levels. The development of the GCC countries as well as MENA region has hindered due to the global financial crisis and the slower down of the GDP rate due to the lower rate of the oil prices. Five Challenges of Businesses and the HR Departments Due to the global financial crisis and the reduced financial crisis of the countries, there are several challenges that the HR departments of the companies as well as the organizational structures of the businesses faced that are described in the following: The HR departments of the organization face issues in recruiting senior managers and middle level managers because of their high pay package. Due to the strict practices of companies in cost cutting, downsizing of many teams in the organizations have been on the practice (Maghyereh et al., 2016). Trainings of employees are not provided on the regular basis to the employees for their career development as well as improved work performance. The revenues of the companies are decreasing day by day due to the global financial crisis. As a result of it, the human resource managers are cutting down the employee sizes that lead to increased unemployment in the countries. Apart from that, the salary structures are also revised to a lower level that causes lack of motivation towards the work (Bauer et al., 2016). The budget optimisation and the efficiency of cost in terms of the administrative functions regarding employee development are not in the practice. Internal and External Business Environment The internal business environments of the government and private organizations of the GCC countries as well as the MENA region include restructuring of the organizations while they have to focus on the core segments of the business as well as the business departments that focus on the cash return ratios. The organizations have to strengthen the capabilities in developing their middle and senior level managers while boosting different departments such as finance, IT, and procurements (Hesse Poghosyan, 2016). The external business environment includes higher rate of unemployment rate i.e. 11.6% along with slower rate of recruiting people. Fall of oil prices and the global financial crisis lead to the loss of the economy of the countries of GCC and MENA region. Apart from that, the retail sector, manufacturing sector, banking sector, hospitality and tourism sector also seems to witness macroeconomic disruption. These led to the sluggish growth of the business both in terms of market capture and in terms of revenue generation from these countries (Timilsina, 2015). Effects of Challenges on the HR Strategies The challenges that are pointed in the above have significantly created impact not only on the human resource department of the organizations but also to the overall businesses of the companies. As the existing employees are not getting the desirable payment and compensation, hence they are not properly motivated towards their field of work. As a result of it, they are less productive in their work (Rogers, 2015). Due to the fall of oil process, the economy of the GCC areas and MENA region is running at loss, hence the companies are not able to recruit new people in their all departments of the organization. The career developments of the employees associated with the organizations are at stake as the countries are witnessing a serious downturn in the economy. The companies are not providing proper training and development to the junior level managers so that they can be promoted to middle level managers while increasing their responsibility (Breyer Gerlach, 2013). Recommendations The recommendations are to be formulated as per the challenges faced by the organizations in the human resource department which is mentioned in the above. The recommendations are: The companies must restructure their financial departments so that they can recruit required senior and middle level managers wherever required. The government of Saudi Arabia in its Vision 2030 formulate strategies that will not only develop the economy of the country but also it will substantially reduce the rate of unemployment from 11.6% to 7% by development of more private sector companies along with the improvement of education (El Fadel et al., 2013). Effective training and developmental programs are to be set in order to increase the effectiveness of the skills and attributes of the employees. The departments of the organizations must be restructured in a proper way so that they do not downsize any departments in the long run. As the quality of education will rise, hence the companies can recruit people from the country itself while providing competitive package to the newly recruited people (Cashin et al., 2014). Conclusion It can be concluded from the fact that the executives of GCC and MENA have formulated strategies that are responsible for the development of the employees careers and the increase in the rate of employment in the countries. There are several issues that the companies of these countries are facing that are creating impact both in their business processes as well as to their different employees of several operational departments. 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