How can we understand human resources?

To understand what ‘human resources’ means, we have to first understand where the term came from. John R. Commons, an American economist, coined it in the late 1800s. He is celebrated as the first-ever social scientist to factor the conditions of laborers into the success of businesses. This little tidbit leads us directly to the definition of human resources. The term perceives employees as one of the resources an organization counts on to achieve its end goals: success and growth.

As we can infer from that, human resources refers to the employed workforce of a business. Human resource management deals with the maintenance of a strong workflow with the staff. This includes maintaining a conducive work environment within the workplace. John R. Commons’s perspective took some time to permeate the rapidly growing American capitalist market of the time. However, the idea had established itself as a concept by the early 1900s.

The backdrop of an expanding economy greatly influenced the idea and its subsequent growth. The American economy was expanding by leaps and bounds at that time. The introduction of an HR department, or its nascent likeness, was in part due to a need to manage the grievances of the developing economy.

Today, the human resources department is a necessary and welcome stalwart in every organization. The well-defined roles of today’s HRM stewards include maintaining a positive and productive work environment. Essentially, they are the glue that binds management with employees.

Why is human resources important in the UAE?

The UAE and its twin business hubs of Dubai and Abu Dhabi are multicultural and tech-savvy. It has established itself globally as a powerful and successful import, export, and re-export epicenter. That aside, it also acts as the core financial center of the Middle East. All in all, it is an exceptional place for MNCs and startups alike to thrive. Needless to say, this has created the need for proficient human resources departments for every mid-sized and large company. Additionally, much like the era that shaped the US in the early 1900s, the UAE is also going through a massive industrial and developmental phase. So, there is an increased need for human resource managers to temper the explosive growth of the predominantly expatriate workforce. That aside, the diverse nature of the nation’s demographics requires the steady hand of the HRM community.

In the UAE, the human resources department is a critical one. Like their global counterparts, they handle the spotting, recruiting, hiring, training, and managing of company employees. Moreover, they are responsible for maintaining a harmonious work environment. This directly increases productivity. It also plays a crucial role in the business achieving its long-term and short-term goals. Another really important feature of HR teams in the local domain is staying abreast of employment laws and regulations. Since the nation has a huge expatriate population, ensuring compliance is a non-negotiable necessity. Simply put, the department ensures that the workplace is legal, non-discriminatory, and balanced.

Now, let’s investigate HR 101 so that you have a better idea of what the role demands. Here, we’re going to look into some of the basic concepts that you’ll need to know. Additionally, we’re also covering some key functions that you’ll carry out in your HR role

8 Key Concepts in HR Management:

Anyone interested in joining the industry should have a rich understanding of the building blocks of HR. So, take a look!

1. Human Capital:

   As we mentioned before, the human resources team handles the management of company staff, who are viewed as company assets. So, in that context, it’s a simple enough jump to understand why. Human capital, as a term, represents the knowledge, skills, and experience that workers bring to a business entity. It signifies the value an employee brings to the business.

2. Employee Engagement:

   While the above explains why employees are considered business assets, it’s important to remember that they are human beings. Thus, employee engagement systems were put in place. These systems tackle each worker’s enthusiasm, satisfaction, and commitment to their roles. This is because the workforce and their happiness in their workplaces are directly correlated to their productivity. It even influences how long they stay and perform their roles with the enterprise. Thus, promoting employee engagement is a key and valuable facet of the human resources department.

3. Talent Management:

   One of the main reasons that human capital has earned the name? Because it refers to the skills and abilities that each employee brings to a role. However, the role of HR goes beyond that and involves identifying prime candidates from the talent pool. Additionally, it involves absorbing them into the company, developing their skills, and retaining them long-term. It also includes succession planning, which greatly affects the health of the company.

4. Succession Planning:

   Succession planning is a deeply important part of the skills an HR team member contributes to the company. It’s the process of spotting the necessary skills that the company needs to cultivate based on its goals. It involves identifying and hiring skilled personnel for the same. This doesn’t have the same impact on a well-established company as it does on a startup. However, we would be remiss if we dismissed its value out of hand. It can contribute enormously to creating a team that can act as a powerhouse for the business.

5. Compliance:

   We touched upon compliance briefly when we discussed the role of the human resources industry in the UAE. Now we’re going to learn about it in a little more depth. When an HRM professional addresses compliance, they mean the organization’s position within regional labor laws, regulations, and industry standards. Most are aware that the UAE has certain labor laws that affect who businesses hire, including diversity, visas, health insurance, and business hours. However, there is more to compliance than just that. It includes workplace safety guarantees and wages, too.

6. Diversity and Inclusion:

   As mentioned under compliance, workforce diversity is valuable and important to a business. The HR team has to ensure that the business welcomes employees regardless of their ethnicity, gender, or religion. Further, they must foster a culture of fairness and equal opportunity within the enterprise.

7. Performance Management:

   Now we get into the crux of the HR industry and a key term. Performance management is the process of setting performance expectations and monitoring employee performance. This typically involves delivering feedback and conducting performance appraisals based on data. This is a data-intensive process, but thankfully, technology has made it simpler today.

8. Training and Development:

   This is an obvious one. Training is the process of identifying the information and skills new hires need to be equipped with. Development here refers to providing opportunities for them to learn new skills and grow. It is a pretty proactive system that has been established for a purpose: to boost professional development and the overall success of the workforce.

Main Functions in Human Resource (HR) Management:

We’re about to dip our feet into the key roles that human resources departments play. This is relevant to businesses in the UAE but applicable worldwide. The previous section went over the basics of HR, and now we approach it from the perspective of skills.

• Hiring:

  We all know that hiring new employees is a key feature, so we won’t stay on the topic for long. Needless to say, this includes crafting job descriptions and sitting through and conducting interviews. Based on the candidate’s CV and the latter, the HR team decides whom to hire.

• Compensation and Benefits:

  This is typically negotiated and approved before hiring. Soon after the interview process, the department crafts an offer letter that covers employee salary and perks. It also must include bonuses and annual paid time off.

• Employee Onboarding:

  While an HR manager’s role begins before hiring (finding a good candidate and interviewing them), onboarding is a critical moment. Once a new hire has been finalized, the human resources team has to ensure that they transition well into their roles. This includes organizing their orientation and training. In the UAE, it also covers the visa process for expatriates and kickstarts their medical insurance.

• HR Policies and Compliance:

  A necessary mastery of human resources for any company HR team. Each region has its labor laws and regulations. The HR department has to ensure that the hire is legally in compliance with the law. This includes enforcing company policies appropriately.

• Employee Relations:

  We’ve all seen this in movies and TV shows. It is the role of the human resources department to mitigate workplace conflicts and disputes. We like to think of the iconic American TV show ‘The Office’, and imagine it. They are supposed to take note of grievances and concerns to build a positive work environment.

• Employee Development:

  A lesser-addressed part of human resources. Employee development is a strategy to provide opportunities for employee skill development. This is done through intensive training programs, coaching, and mentoring. It encourages the workforce to maximize their potential in their roles.  This, in the long run, will be a boon for the business.

• Performance Appraisal and Feedback:

  It is the HR department’s job to maintain data on employee performance and take notes. These insights are shared with management, allowing them to fully determine their capabilities. It influences the employee’s salaries, promotions, and responsibilities in the future. It also enables the business to help workers improve through tailored performance improvement plans (PIP).

• Employee Engagement and Retention:

  As we mentioned above, one of the HR team’s pivotal roles is to create a good working environment. This includes building programs and initiatives that improve morale and help them feel recognized and valued. It also reduces turnover and boosts productivity.

• Legal and Ethical Compliance:

  Legal compliance was covered above and pertains to local employment laws. However, ethical compliance involves regulating employee behavior and ensuring that the workplace feels comfortable for all.

• HR Analytics:

  A newer, interesting aspect of human resources. They then glance through it and try to get a sense of how the staff are doing at work. It touches upon talent management, performance review data, and much more. Recent years have seen technology like AI get incorporated into tasks, making analytics easier.

• Strategic Planning:

  HR professionals must create strategies that align with the organization’s overall goals and objectives. They often unite with C-level management to achieve this.

• Management Change:

  As any fan of ‘The Office will tell you, big transitions like restructurings, acquisitions, mergers, and layoffs are scary. It is the human resources department’s job to make this as smooth and painless as possible. They minimize disruptions during these difficult times by communicating between senior management and staff.

There’s more! We have covered human resources as a topic on a number of our blogs. Moreover, LUBM has partnered with highly ranked UK and European universities to offer MBA courses in the field.

A Comprehensive Guide to the MBA in Finance Syllabus

If you’re interested in a blog about redefining human resources in the UAE, have a look here!