Labor Market Issues - Essay Example

Name: Tutor: Title: Labor Market Issues Course: Date: Introduction The Hospitality industry plays a great role in the growth and development of global economy. Increased mobility of the workforce as well as globalization process of the hotel industry has become a reality. As a result, organizations that provide the hospitality services are largely faced with the challenge of managing their culturally diverse workforces. Therefore, it is critical for the organizations in hotel and tourism industry to develop more culturally sensitive methods for selection, particularly within a cross-cultural work environment which seems to be a big challenge for the hospitality industry in Saudi Arabia and across the globe (Choi, et.al. 2000). Workforce diversity is considered an essential challenge, thus a requirement for organizations that are run the hotel business through a carefully managed reputation and embraced as one creating job opportunities. It is important that such businesses promote cultural diversity within their workplaces through diversity training initiatives. This creates conducive work environment or relationships amongst individuals employed in the hospitality industry that deals with the day to day service provision to global customers (Wong 2004). Arguably, development of multicultural diversity programmes for training employees is non-negotiable initiative, an ongoing process that should be implanted to enhance a sustainably cultural diversity work environment. The study analyzes the extent of cultural diversity and the social composition of Saudi Arabian employment environment with emphasis placed on the labor market composition. The nature of employment relationships and varying labor markets in the hospitality industry in Saudi Arabia Saudization Scheme Over years, the Kingdom of Saudi Arabia has largely depended on the immigrant and expatriate workers for its industries, hospitality and tourism is the most notably. However, increased unemployment among the nationals of Saudi Arabia, has forced the government to introduce and implement Saudization policy. The policy authorizes the replacement of expatriates by local workers. This creates twofold implications for the Saudi Arabian hotel and tourism industry. Immigrant workers have taken on jobs identified with low pay for local residents or positions which nationals would not prefer occupy. Furthermore, the hotel industry has at length relied heavily on expatriate managers for their technical expertise and this must be reassigned to Saudi citizens (Muhammad & Henderson 2005). Saudization process creates an understanding of both challenges faced by the hotel industry and the available indigenous labor opportunities to participate as well as perform in hotels Saudization scheme. The social and cultural values of Saudi Arabia indicate that Saudis can potentially participate within the hotel workforce. This is due to their kindness, benevolent and sincere nature in their employment dealings and they uphold their ancestors’ values throughout their lives. However, their family social commitment might bring about difficulties in the areas of job requirements fulfillments without high absenteeism (Kwintessential 2007). The government of Saudi Arabia has focused on the Saudization of its workforce in the hotel industry as a strategic objective to re-invest into the public sector the labor force as well as address the problem of unemployment dominating Saudi graduates. The policy aims to mandate the private sector to employ more Saudis by establishing a priority for acquiring the domestic workforce. This means that companies identified with large number of nationals on their payroll, stands a great chance to bid for the public sector projects. On the other hand, Local chambers are supporting the government to attain the goals of Saudization through organizing internship projects for the youths so as to create employment for graduates. Saudi officials are planning to increase the cost expatriates visas compared to the private sector as a way to address the unemployment problem as well as make the recruitment process for young Saudis relatively attractive. However, some Saudis argue that the enhanced availability of cheaper workers from other countries has hindered Saudis who seek for employment from attaining work interested in (Abu-Alsamh 2004). Although the recognition and effective management of workforce diversity is a comparatively complex phenomenon, most organizations particularly in the hospitality industry are fostering cultural diversity initiatives. This helps such businesses to essentially create for them competitive advantage since diversified competencies are as well developed. Therefore, managing cultural diversity is the best way to respond to the need to discover, respect and fully acquire the benefits having a well-developed employee complement that emanates from diverse backgrounds in regard to ethnicity, race as well as the gender and social background. It has been suggested that the creation programmes for cultural diversity training must be intensified to enable the hospitality and tourism businesses to develop harmonious as well as efficient work relationships amongst their employees, a failure for such businesses to be pro-active on the cultural diversity issue can be catastrophic since the industry provides services to different people from different geographical locations (Bell 2005). Research indicates that great opportunities exist for the indigenous workers in Saudi Arabia to take on bigger roles within the hotel industry. However, a stable economic environment in addition to the governmental support is required to create more opportunities for Saudis to undertake positions in hotel workforce. The indigenous workers have been identified with the potential to develop into competent employees in the service industry. Most of the indigenous employees show positive attitude towards the hotel industry jobs. Therefore, sufficient training alongside with effective leadership must be encouraged by employers so as to transform the positive attitude into improved job performance (Wong 2004). According to Gustafson (2002), a negative relation exists between employee level of training and turnover within the hotel industry in Saudi Arabia. This implies that the hotel industry is faced with the risk of shortage of skilled human resources, organizational justice, training programmes, management skills and industry information. As a result, the distribution of job opportunities, employment conditions and relationships, are different between the Saudi nationals as well as foreign workers and this might lead into job dissatisfaction in the hotel industry. High turnover among the Saudi employees has been identified as a major challenge facing the hotel organizations. The Saudization process, a mandate applied by the government to employ Saudis is a major contributor of high turnover within the hotel workforce. It is important to suggest that increasing the commitment of employees as well as their work satisfaction will minimize labor turnover (Gustafson 2002). In order to create employment opportunities and make them available for the private sector particularly those that provide hospitality service to employ locals, the government of Saudi Arabia established a support fund referred to as Human Resource Development Fund (HRDF). This is to address the problems faced by unemployed Saudis where they are encouraged to participate within the private sector. The aid targets individuals who already have skills and hold recognized competence, though it includes those not trained and can not meet the requirements for the available jobs (HRDF 2007). The government of Saudi Arabia has made efforts to ensure that working places for Saudis is conducive. This is enhanced through the establishment of various programs including encouraging foreign investment as well as Human Resources Development (HRD) financial scheme. It is a scheme, announced by the Saudi government in 1999 and it provides apprenticeships, which operate as a school-to-work transition program. The reports indicates that the HRD Fund offers about 75 percent of the total training cost ,and thus covering 50 percent of the Saudi salary within the private sector (HRDF 2007). The bias among Saudi nationals toward government positions has over time weakened the public sector productivity, causing labor competition as well as forcing current expenditure to increase. As a result, Saudi policymakers have focused their concerns on the issue of joblessness. It has been argued that the work ethos of Saudi nationals can developed as the new opportunities are established. However, this can only be attained if the right wages is given, and thus Saudi employees will take on lower-skilled positions and in the long run manual jobs, particularly those in hotel and tourist industry. The idea of cheap expatriate labor force in perpetuity can not be considered a practicable decision for the Saudi Arabia's national security because leads to unemployment. The private sector, therefore, will be required to shift their focus to reliance on actual productivity gains in a given capital, labor and total factor productivity (Sfakianakis 2011).  Women’s Employment in Saudi Arabia The Saudi government is developing policies to enhance the status of women in regard to employment. However, various social, legal, educational as well as occupational factors continuously hinder Saudi women to fully participate in the labor market. This prevents the Kingdom of Saudi Arabia from achieving its full economic potentials. Although involving women entirely into the labor market can not be easily achieved, it can only be attained if the Saudi Arabian Kingdom focuses on a knowledge-based economy. Therefore, women’s employment has been considered a crucial element within wider macroeconomic policy developed to promote equitable social as well as economic development. This implies that the Saudi government will be required to endorse, implement, and make obligatory legislation so as to foster equal participation within its labor market (Bashraheel 2010). It should be the responsibility of the government to implement policies identified with the capability to create employment opportunities specifically for women. Furthermore, institutional mechanisms which are appropriate enough to promote women’s well-being and improvement in the workforce particularly in the hotel and tourism industry must be considered. For instance, a quota system for the women comparable to Saudization and other incentives including the family-friendly workplace practices must be put in place. However, collaborative work among the Saudi government, NGOs and the private sector should ensure that the policies promote equal participation among the women within the labor market. The existing employment legislation will be rigorously implemented, with a focus on ensuring that women work in competition through appropriate training as well as fair workplace practices put in place. The education system for Saudi public will be revamped so as to prepare women for the existing digital and hospitable marketplaces in addition to the creation of strong support systems to encourage women take on jobs. This indicates that women in Saudi Arabia must be prepared for higher level positions of decision-making and accountability, for instance, hospitable service provision within the hotel and tourist industry. Such measures will result into robust, competent, and equipped labor force in Saudi Arabia to deal with future challenge and reach its opportunities (Choi, et.al. 2000). In order to have a critical evaluation of the employment relationships and varying labor markets in the hospitality industry in Saudi Arabia, a comparison is made with other countries. In this case, cultural diversity management has been assessed in hotels and agencies within the Johannesburg, Sandton and Roodepoort cities of Gauteng proving in South Africa. The two countries operate differently in the global marketplace or workforce of today’s business environment. The research indicates that few hotel managers within the hospitality and tourism industry in Gauteng are competent in the areas of cultural skills. Therefore, the significance of being committed to sustainable process of employee development, particularly at individual is not a major issue. This is in direct contrast to U.S and Saudi Arabia hospitality and tourism industries where the importance of cultural diversity is largely considered in the employment sector. This implies that multi-cultural diversity is yet to be considered an important subject of discussion within the hospitality and tourism industry of South Africa, unlike in Saudi Arabia where Saudization of jobs is promoted among Saudi nationals. It is apparent that most of the hotel managers in Gauteng province of South Africa are not knowledgeable enough about the various cultures and languages of their employees as well as tourists or clients (White 1999). South Africa is undergoing extensive change regarding multicultural staffing, and thus important for the industry to review its efforts based on multicultural diversity training. This is critical in preventing crisis associated with immense proportions. It is important to argue that development of a fully inclusive as well as supportive diversity culture within the workplaces is one of the pressing challenges and basic concerns the hospitality and tourism understory in South Africa is faced with. Therefore, it is crucial to increase sensitivity within the hospitality and tourism businesses of the Gauteng province and across the globe on the significance of promoting effective cultural diversity workplace training programmes. It is only through empowering employees from various cultural as well as other backgrounds, can a given business in the hospitality service become successful. All employees in the hotel industry are expected to deal in more culturally diverse work environments (Wentling & Palma-Rivas 2000). Conclusion It is critical for the organizations in hotel and tourism industry to develop more culturally sensitive methods for selection. The social and cultural values of Saudi Arabia make the Saudis to potentially participate in the hotel workforce. The distribution of job opportunities, employment conditions and relationships, are different between the Saudi nationals as well as foreign workers and this might lead into job dissatisfaction in the hotel industry. Increased unemployment among the Saudi nationals, has forced the government to focus more on Saudization policy. Various social, legal, educational as well as occupational factors continuously hinder Saudi women to fully participate in the labor market. The work ethos of Saudi nationals can developed since some new job opportunities are established. However, this can only be attained if the right wages is given and thus Saudi employees. Bibliography Abou-Alsamh, R. (2004) Bumpy road to Saudisation. Al-Ahram Weekly. Retrieved on 23 February 2012 from, Bell, B., (2005). Saudi Arabia’s job market rethinks. BBC News. 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