SME Corner: Entrepreneur Yunib Siddiqui helps a small company struggling with its HR obligations.
How to know when your business needs a PRO
I now have 20 employees in my company and I understand that there are certain employment obligations I have to fulfil, such as hiring a PRO for the company. Is that correct? And what about other requirements, such as health insurance for staff or even pertaining to Emiratisation? Any light you can shed on this would be helpful. SP, Dubai
Congratulations on the growth of your company. Either you’ve been doing all the running around so far or you have been using an external services provider as a PRO.
When I started my business I made it a point of accompanying the PRO to understand how the business licensing and visa processes worked. This may not be practical as you grow but you gain valuable insight into what a PRO’s job entails.
I know free-zone business owners who, despite their size, don’t use a PRO. Free zones offer a streamlined one-stop regulatory shop. In this scenario it might be easier to nominate an administrative employee to look after the regulatory requirements.
To my knowledge there is no regulation compelling you to hire a PRO. Your need to hire a PRO depends on the amount of time it takes and costs incurred. If you’re using a third-party service provider, then each service will be chargeable. At some point it will become more economical to take the service cost in-house.
If you haven’t made the effort to understand how the licensing and visa process works then you’re going to find dealing with your PRO or an external services provider frustrating and expensive. PROs, in my experience, survive in the grey area between what you know and don’t know. A routine process that should take an hour could take a day or two. Ask questions, understand and note down the process and time it takes for future reference. Have your accountant reconcile the service and government fees carefully and in a timely manner.
Having a rudimentary understanding of what a PRO’s job entails will ensure you hire the right person to do the job as well as set and manage expectations.
When I was first establishing Jones the Grocer we struggled to obtain a particular license. The PRO, at the time, went and returned three times without the required document to allow us to begin trading. We were at an impasse. The fourth time I accompanied the PRO. I spent an hour with the officials allaying their concerns and I left with the needed document. To get the job done, be prepared to step in when needed.
When it comes to health cover, Dubai introduced a new mandatory health scheme last year that is being rolled out in phases. For a company like yours with fewer than 100 employees, it must offer health cover by July 2016. However, I suggest you provide medical cover now so that your team is cared for.
The Emirates ID card is mandatory for all citizens and residents of the UAE. Your employees won’t be able to register for primary services, such as utilities, without presenting their Emirates ID card. While the onus is on the resident to obtain the card, I recommend you encourage and assist employees to complete the simple application process.
As your business grows, your employee nationality mix will change. Perhaps you will employ more from Asia and fewer from Europe or vice versa. Your visa processing fees for certain nationalities can go up or down as your employment mix changes. A good PRO should be able to give you advice on how the visa process works and how the growth of your business might impact your hiring strategy and costs.
The Emiratisation programme is an important part of the UAE’s strategy to employ citizens meaningfully in the public and private sector. Depending on the type of business and the number of employees there is a prescribed percentage of Emiratis that should be employed. For example when a trading company reaches 50 employees they have to hire one Emirati or 2 per cent of the workforce. As I don’t know exactly what your trading activities are I recommend you take advice from your PRO or from the Ministry of Labour.
One last word of advice: if you haven’t hired an experienced human resources person, now might be a good time. Most PROs work in tandem with HR. An efficient working relationship between these two will help you navigate the regulatory system smoothly as you grow.
Yunib Siddiqui started his first business in London at the age of 22. He is the chief executive and owner of Jones the Grocer in the UAE. He can be contacted at SMEbizCorner@gmail.com
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