Career Planning in Retention of UAE Nationals

INTRODUCTION

Career planning plays a key role in employees’ performance and retention in the organization. In fact, by planning their career, employees can link their personal aspirations to the organization’s vision and goals creating a positive environment [1] .

Based on the importance we give to the career planning and since, we realized the scarce number of researches that focused on the impact of this factor on employee motivation and retention in the United Arab Emirates, our study will attempt to answer the following question:

How is career planning contributing in retaining and engaging UAE Nationals in workplace?

To that end, we will, in the first part, give a literature overview and then….

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LITERATURE REVIEW

The purpose of this study is to explore how career planning contributes in retaining and engaging UAE Nationals in workplace. In general, we have the power to shape our careers by the professions and positions we take in our life. Therefore, planning career is both organization and individual responsibility. In other words, on one hand, organization shall focus on planning careers and identifying the career paths for their employees and advise them on the logical progression available between existing jobs. On the other hand, the individual should also plan their careers and focus on what they want, develop themselves and look for job opportunities that match their aspirations.

In the below paragraphs, we will review the literature on how organization can engage and retain employees through career planning and will also look at career planning centered on employees. Then we will look at the retention and engaging policies that organization may adopt. On a later stage, we will explore the UAE Nationals are looking for in job and how the career planning play a major role in their decisions for leaving or staying in organistation.

Organization Centered Career Planning

Career planning and internal career development programs are proving to be critical in keeping valued employees in organizations [2] . Meat & Wool New Zealand, a company whose mission is to deliver innovative tools and services to support informed decision making and continuous improvement in market access, product positioning and farming systems, elaborated that, as an employer it is an effective way to contribute to your employee’s development, moreover, they stressed on the fact that, “assisting with career planning can also lead to increased retention, particularly if the organization provides growth opportunities” [3] . Similarly, Gaffney (2005), stated that employers who actively partner with their employees to align career direction with company goals are realizing better retention rates. She added that employees actively involved in their personal development report more satisfaction with their work and tend to stay longer with the organization [4] .

Career planning seeks to understand the employee’s objectives and to map their future by having a discussion on job requirements and financial rewards. Meat & Wool New Zealand defined career planning as the process of making and implementing career decisions [5] . In fact, a specific job or responsibility fits into employees’ career path plans [6] . According to Heller (2008), the ideal career path is smooth and clear of obstacles. He added that “such a path can be highly motivating: encourage your staff to follow it by offering them the support they need to develop the abilities that will ultimately take them on and up” [7] . Consequently, by having a career plan, an employee may make sound decisions for his future, by looking at the situation in a larger context and better evaluate the options. Employee will also know what is the mix of skills, qualification and experience he / she needs to develop in order to achieve his career aspirations and move in a career direction that is designed to meet his interests and financial goals [8] . Yet, it is important to understand the stage which your employee is at before starting career planning with them, as career goals and plans will change throughout a person’s life as they gain experience and achieve previously set goals. [9] Therefore, it is important for organizations to focus on developing enriched and more capable workers.

Most of the employees wonder if there will be opportunities for him/her to be developed and to progress in the organization. In fact, Armstrong and Murlis (2007) consider that “new graduates and MBAs very legitimately ask about how the organization manages and progresses talent, especially in an environment that is likely to have many fewer promotion opportunities than in the past”. They added that they need to be sure that the company has processes in place for identifying talent, for succession planning and for fair and reasonably transparent means of making promotion decisions. They emphasized that to apply this element of reward well, “organizations need to be clear what the career paths are and what the criteria’s are for making lateral or diagonal moves as well as promotions”. [10] Based on the above, we insist on the fact that companies should be keen to provide opportunities for progression because when the opportunities of promotion are limited, it will lead to the employee always having to do the same thing and having no prospect of development [11] and therefore considering leaving the company. According to Leigh Branham [12] , who specializes in employee turnover and engagement, there are seven major reasons for employees wanting to leave their employer and one of them is “Too few growth and advancement opportunities”.

Employee Centered Career Planning

The choice of a profession or specific career is usually made on the basis of some criteria that seem more important than interest in the work itself. In other words, individual do not accept a job for the only reason of importance of the job but also, we can list job security, the prospect of a career, or a higher salary that one could get in the field he/she would actually like to work in. In reality, most people need both money and meaning, both material and immaterial fulfillment. Paradoxically, according to Rothin and Werder (2008), this is not an either/or, but people who decide in favor of a degree or a career path that actually does not interest them at all run the risk of sooner or later suffering from boreout [13] and then leaving the company.

Jack Welch (2005) stated: “Working to fulfill someone else’s needs or dreams almost always catches up with you” [14] . In fact, people often choose careers very different from the ones they would actually like to follow. They choose the wrong options, and their problems grow from that point onwards [15] . Rothin and Werder (2008) insisted that parents can also influence their children’s choice of career, and that there is also pressure from social standards and expectations. They added that if such pressures lead people to choose the wrong course, boredom, under-stretching and lack of commitment are the likely results [16] .

In their book, “Boreout, Overcoming workplace demotivation”, Rother and Weder (2008) [17] identified three career stages as listed below:

Stage 1:

We are at the beginning of our career, with little or not professional experience. We may be highly motivated and are looking forward to professional life and its possibilities. We also know about the dream of sweet idleness, but do not in our wildest dreams think that something like that can happen in real life. We expect stress and a challenge.

Stage 2:

We begin work and quickly establish that the world of work is not nearly as stressful as is always claimed. And so we learn to control the amount of work we do, while still sending out the appropriate messages. As we assume that idleness is pleasant, we plan our routines so that we have as little as possible, or even nothing at all, to do.

Stage 3:

After some time, we begin to suffer from boreout. Although we recognize that idleness is anything but fun, we maintain this condition. We become dissatisfied and remain so; our behavior has become self –defeating. We do not try to discuss this with a superior, or seriously consider changing job.

When employees understand what the organization needs and how their personal career aspirations fit into the overall plan, a new contract develops. [18] The psychological contract refers to beliefs that individual hold regarding promises made, accepted and relied upon between themselves and another. According to Armstrong and Murlis (2007), a psychological contract is implicit; it is also dynamic and it develops over time. From the employee’s point of view, security of employment, career expectations and the opportunity to develop skills are three aspects of the employment relationship covered by the contract; while from the employer point of view, commitment and loyalty are two aspects for the contract [19] . On other word, as long as the employee was doing a good job they might expect continuing employment and be able to contemplate promotion up the career ladder. In return, the employer expected high levels of performance and loyalty from employees.

However, the reality does not much match the above. As indicated by Holbeche (2003), “organizations were simultaneously telling employees that they were responsible for managing their own career, while shedding jobs and abandoning previous career management practices which maintained the myth that careers could be planned. Lined with continuing organization change and uncertainty, jobs for life have become a thing of the past. In their place organizations talked of offering employability to employees in return for versatility and multi –skilled outputs, plus a willingness to find other employment gracefully when they were no longer needed. The changing psychological contract has various implications for HR”. [20]

Even though, the shift in the paradigm by introducing the idea of the employee managing his / her own career has caught none because many employees lack the time and know-how to do this, Holbeche (2003), emphasized on the fact that the skills of career self-management can be learnt and the wise employer makes resources available for people to do this. Yet jumping the corporate ship is risky, so an employer that can offer an attractive internal career change has a chance to retain valuable talent. An employee may develop a new specialty, assume an altogether different job, or sometimes return from a management track to an individual contributor role. [21] Holbeche (2003) added, in “today’s changing organizations this may not mean conventional promotion. Career management will need to be much more individually tailored than the provision of blanket training opportunities. Imagination and flexibility will be needed on the part of both employees and employers if a satisfactory development route is to be found” [22]

Retention

Nothing helps retain talent so much as addressing people’s personal issues [23] . Therefore, in order to retain employees, organizations must develop policies that engage and retain employees in their organizations. In fact, retention policies take into account the particular retention issues the organization is facing and sets out ways in which these issues can be dealt with (Armstrong and Murlis 2007). This may mean accepting the reality, as mentioned by Capelli, that the market, not the company, will ultimately determine the movement of employees. Capelli, as stated in “Reward Management, A handbook of Remuneration Strategy and Practice”, by Armstrong and Murlis (2007), believes that it may be difficult to counter the pull of the market [24] . Since employer are preparing employee to be more employable, the challenge today will become to retain employees who are highly employable – and helping people develop themselves and their careers has been proved to do this. It is therefore a business imperative that organizations attract and retain talent by providing people with opportunities for growth [25] . You can’t shield your people from attractive opportunities and aggressive recruiters. As Armstrong and Murlis (2007) noted, organizations have to design talent management policies by designing jobs and developing roles that give people opportunities to apply and grow their skills and provide them with autonomy, interest and challenge; they added, by providing talented staff with opportunities for career development and growth [26]

Employee Engagement

Retention is fundamentally related to engagement. Employee engagement is a recent management phenomenon. The premise is that it is a magnetic rather than a coerced approach to convincing people to want to do what is necessary to generate a competitive advantage for the company. Engagement is measured in terms of emotional commitment to the organization, initiation of improvements, support of coworkers, and the like. [27] Ernest and Young, on of the big consulting firms stated that “A few leaders/Managers drive most of attrition” [28] . With reference to Fitz-Enz (2009), over the past five years a dozen independent studies have been published identifying twenty-six separate factors that have been identified to have some effect on engagement. The figures below show the frequency of occurrence. These eight drivers appeared in several of the twelve studies [29] .

Driver

Frequency of Mentions

Trust and Integrity

8

Nature of the Job

7

Individual/Co. Performance sight

6

Career Growth Opportunity

5

Pride about company

5

Coworkers/Team

4

Employee Development

4

Relationship with Supervisor

4

Figure- Drivers of engagement – Extracted from ROI of Human Capital, measuring the economic value of employee performance

In parallel, in the study conducted by Ernest and Young, one of the key actions to improve retention and engagement is to focus on career programs

In the above we captured the differences between Organisation and employee centered career planning and we also tried to highlight the importance of career planning in the retention and employee engagement. And since this study focus on the UAE Nationals, we will in the paragraphs below give an overview of the characteristics of the UAE market and what influence UAE Nationals in planning their careers and commit to their workplace.

Characteristics of the UAE market and Nationals

UAE Demographic

Based on the research paper conducted by Al-Waqfi. and Forstenlechner (2010), the demographic setting is a unique characteristic of the United Arab Emirates, even among the Gulf Cooperation Council (GCC) countries. “Depending on the source consulted (Government of the UAE, 2007, Grant, Golawala, & McKechnie, 2007, Toledo, 2006), citizens are estimated to account only for 15 to 20% of the total population” [30] .

Nationals Preferences

Nationals strongly prefer to work in the public sector. In fact, government offers higher salaries, more job security and a less demanding environment compared to the private sector as stated by Al-Waqfi. and Forstenlechner (2010). The Federal Government is trying to retain and motivate human capital by establishing a motivating and innovative employee workplace, enhancing a performance culture and merit-linked rewards, and developing career planning mechanisms [31] . However, one of the challenges of nationalization, i.e. emiratization, is the limited future employment opportunities in the Government and Public Sector [32] .

Characteristics of GCC labor markets.

In his study, Stereotyping of citizens in an expatriate dominated labour market: Implications for workforce localization, Employee Relations, Forstenlechner (2010) stated that the current labor situation has strong implications for the employability of nationals. He elaborated, that a “cheap pool of skilled labor puts downward pressure on wages and consequently reduces the incentives of nationals to compete in many sectors of the economy”. In other words, “the comparably high reservation wage for Gulf nationals is often not being met. This – in combination with the predominant expectation of a social contract with a strong emphasis on welfare – has led to a strong preference among nationals for jobs in the public sector (Mellahi, 2007), resulting in highly segmented labor markets and “a low elasticity of substitution between national and foreign workers” [33] .

What do Nationals Want?

Godwin (2006) provides several reasons for the preference of UAE nationals for the government sector; higher salaries, better employment conditions, greater job security and often shorter working hours (Godwin, 2006; Kuntze and Hormann, 2006; Mellahi, 2007). [34] Paradoxically, in his presentation, “ Practical tips and proven strategies for recruiting nationals into private sector companies” [35] , Al Hassawi (2010), emphasized that Emiratis are not really different from Expats, they have the same needs; Learning, progression rewards, and recognition, and same aspirations to be successful, contribute and fulfill their vision. Nationals want to know, what is the future opportunity? What capability do they need to build? What value should they create? And what support will be provided –development, assignments, mentoring, coaching? [36]

Similarly, Forstenlechner in his presentation “The fundamentals of developing a comprehensive Nationalization program framework” in the 2010 Emiritzation summit

Young nationals’ preferences and perceptions regarding work, they found (as stated in the figures below) as advancement opportunities is one of first 4 most key factor that make a job attractive.

Based on the above, we can realize that career planning and management offered by organisations is one of the key factors that UAE Nationals consider to join or leave company.

In his study, “Workforce localization in emerging Gulf economies: the need to fine-tune HRM”, Forstenlechner (2010) argued that for fully trained nationals, retention has become a key issue for a variety of reasons from dropping interest in the position to a perceived slow promotion process or poaching by competitors. He added that other companies approached those trained in managerial roles and not bothering with training local people; “they rely on making substantially better offers to those already groomed for management” [37] .

Retention of UAE Nationals

Retention is clearly identified as one of the key benefits of career management. Retention is a crucial and traditionally undervalued topic in the UAE. Retention rates among national employees in the private sector currently are at around 40 per cent, with one reason for low retention being the lack of career development plans within organizations (AMEInfo (2007) as stated in Forstenlechner (2010)). [38] In fact, lack of focus on a commitment oriented corporate culture fails to support employees with training or career paths