Recent market swings have taught business the importance of top performers in management in helping to ensure continued success, Simon Blandford comments.
Talent remains vital to success in UAE
Recent market swings have taught business the importance of top performers in management in helping to ensure continued success, Simon Blandford comments To support the ambitious, but still attainable, long-term plans put in place by the UAE, organisations today have to capitalise on the past and plan for the future. Talented people are the key to its success and the recent market swings have taught us that it is not just a volume of people issue, but also one of concentrating on the creme de la creme in the region.
Progressive companies in the UAE have transformed their talent management policies to adapt to the changes. But given the instability over the past 18 months, and the light that is now appearing on the horizon, which companies will remember these lessons and who will thrive when the upturn begins? Twelve months ago companies were struggling to find the "talent" they needed to sustain the plans for growth in the UAE, and the GCC generally. Poaching key staff, inflationary pay spirals and high turnover to new, more attractive, jobs were commonplace.
The drivers for these changes in the employment landscape were many, although the most significant certainly included: ?Rising oil prices leading to industry diversification and infrastructure development in the region. ?Increasing nationalisation standards, expectations and aspirations. ?A global boom that created global "talent" opportunities and competition in many business critical roles. In the resulting war for talent, the UAE initially used cash as the main attraction policy. But along with this, it has invested in developing more sophisticated people management policies and procedures.
The need to attract and retain key skills to deliver planned business diversification and growth placed human capital management directly on board agendas. With this came a new focus on talent management, utilisation and development. The big question now is whether companies will capitalise on the evolution that has taken place, or, as a result of the global downturn, whether they will take a step back?
Meetings with senior human resources (HR) professionals and our recent Snapshot Survey confirm that talent management is still a high priority across the GCC. Much discussion has occurred, both locally and internationally, on the different ways that Abu Dhabi and Dubai have fared over the past 12 months and their plans for the future. On a more fundamental level, all UAE companies fall broadly into one of three categories.
Survivors: Companies that now have low cash liquidity and have been quite badly burnt by events. Stable player: Companies that are "maintaining" their position, albeit with reduced liquidity options. Investors: Companies that can still afford to diversify, grow and take risks as they have the cash reserves to do so. All three types are very different from the outside. But they are all still focused on two major issues when it comes to talent management: increasing quality and enhancing productivity.
Survivor companies can be easily identified as those whose main goal is simply to stay in business and they can do this by reducing operating costs and removing redundant posts. They also have poor liquidity and are the most risk adverse of the three groupings. These companies have been forced into the situation where they have retained only the critical staff and so employee numbers have reduced significantly.
The quality of the retained staff is more important than ever as they still run the risk of bankruptcy and this places performance right at the heart of the macrobusiness strategy. They also have to consider their external reputation by providing outplacement support to redundant staff. The challenge there is maintaining morale, developing staff and ensuring that "survivor syndrome", a spiralling discontent within the reduced workforce because they feel guilt at being retained, does not materialise.
It is vital that the company invests in the remaining staff to maximise the potential future growth of the company. Companies that find themselves with similarly tight liquidity issues, but with more assured income, are classified as "maintain" companies. Their risk appetite will also be slightly elevated on survivor companies and will be solely focused on maximum return for minimal capital investment.
The expansion opportunities for these companies is their ability to invest in new projects, although only those than are categorised as high priority. These companies have also reduced staff numbers, but the majority are finished with removing the deadwood, or those positions that are no longer relevant to the core business strategy. These companies need to focus on retaining and motivating business critical skills that are still in demand, and transferring those skills to the parts of the business that need them the most.
Implementing talent strategies and processes for maximising future development is normally key to this type of business. The challenge this produces also has similarities with survivor companies as maintaining talent is a key focus. The additional complication is realigning employees with the new priorities and ensuring the remaining employees have enthusiasm and passion for the remaining projects.
"Maintain" companies need to ensure they have strong leaders and a high performance culture that transfers skills to where they are needed the most, as well as aligning individual and team performances with corporate objectives. The third grouping is the "invest" companies that are fortunate enough to have high liquidity despite the downturn. These companies are utilising the downturn by acquiring distressed assets that complement the core business as well as expanding into new areas when strategic investments materialise.
These companies may be in a strong position, however the talent management challenges are equally as demanding as they have to align all staff with the new business objectives. The focus is on attracting the top leaders who can identify future growth opportunities and maximise the unique financial position they are in before the market turns. Like "maintain" companies, this also has to be coupled with removing unneeded positions to ensure that the "new" company has the right talent in the right positions with the right leadership and direction.
These companies should be focusing on implementing reward structures that are aligned with the flexible approach the business is taking and developing the leadership team to lead the business into the post-downturn market. Every company in the Gulf falls into one of the three categories. Those that cannot be honest with themselves on which category they fall into and consequently what action they should take to maximise the return on their human capital are in for a shock.
The past five years have been a talent management roller coaster, but most companies are now on stronger and more solid footing. For the UAE to come out of the global crisis ahead of the rest of the world it needs to remember the lessons it learnt and make sure their impact is felt within both short and long-term business strategies. firstname.lastname@example.org Simon Blandford is a principal with Mercer Human Resources Consulting in Dubai.