The importance of HR for UAE growth



The father of competitive advantage, Michael Porter, argued, “The only meaningful concept of competitiveness at the national level is national productivity.”  Productivity (typically defined as output per employee) however, is a function of several factors. Research in this areas has demonstrated that productivity is a function of the person’s competence and ability; organizational systems; organization culture; resources available; external environment; and leadership style.

If you take out the external environment, you will notice that the remaining factors are all the domain of human resources. By human resources, I do not simply refer to the human resource function, but to the actual people that work in organizations. It is both interesting and self-evident, that a nation’s overall competitiveness is a function of its people. In other words, for any one nation to grow and prosper it must invest in its people. From developed nations like the USA and Britain to the developing countries in South-East Asia, this has been a high priority over the past several decades. Britain overhauled its vocational education system in order to ‘upskill’ its workforce for the advancing service economy. Singapore managed to become a global force in five decades by focusing on developing its workforce.

The UAE is another country that managed to become a global powerhouse in a very short time by attracting global talent and developing its local workforce. The challenge, if the UAE is to become globally competitive, is not simply maximizing productivity, but also ensuring the output is globally competitive. In other words, this is both a quality and quantity game. While the quantity game can be easily played by attracting expatriate workers, the quality match is much harder to win.

Think about environments that foster creativity and innovation or companies that are on the cutting-edge of research and development. What do they have in common?

1-      They empower their employees to create, innovate, and develop.

2-      Their leadership teams are inspirational and transformational.

3-      They have the systems and processes that enable employees to excel.

4-      They hire, nurture, and retain the best people.

How does this translate for us in the UAE?

First, most of these areas are within the domain of the human resources function in a company. The organizational culture is ‘owned’ by the human resource function in that it has the biggest effect on the company’s culture. Restrictive policies and procedures, ineffective recruitment and development systems, and poor leadership development programs all can have a negative impact on the quantity and quality of the workforce’s productivity.

Many organizations remain stuck on viewing employees as a ‘cost’ to the company despite the global shift towards considering people the ‘human capital’ of the organization. We might not be able to put a dollar and cent value next to an entry titled ‘human capital’ in the financial statements, but it remains a fact that without its people, an organization cannot produce or make profit. Developing and training our employees is not a benefit that we grant them, but a necessity for organizational success. Viewed in this manner, development, engagement, and positive cultures are investments the company makes to maximize its profits. Viewed at the national level, if every organization adopts these practices, we move the nation several steps forward towards global competitiveness.




About Layla Halabi

Layla Halabi, Partner at Learnactive, is a performance specialist with a broad background in Leadership and Management Development with more than 20 years’ experience in the GCC and the Middle East. Layla has extensive experience as an internal and an external consultant.

Layla holds a Master’s Degree in Training and Performance Management from the UK and a Graduate Diploma in Managerial leadership from the US. She is also a certified Global HR Professional and Senior HR Professional from the Human Resources Certification Institute in the USA; from the British Psychologist Society for Levels A & B (Intermediate) Occupational Testing and a certified Assessor and Assessment Centre Manager.


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