The UAE’s private services industry needs a lifeline - no doubt about it.
Historically, two of the biggest concerns of the services industry have been rental and staff costs. While the issue of rent is something that will eventually find a middle ground through continuous dialogue between the lessor and lessee, resolving staff costs is the need of the hour considering the impact of COVID-19 on the sector.
If anything, the pandemic has only exposed this Achilles’ heel on a larger scale, while at the same time bringing back the focus on a possible solution - temporary agency employment (TAE).
Let’s start with F&B
To understand the idea behind TAE better, let us take the case of the UAE’s F&B sector. Most standalone restaurants in the UAE witness peak customer rush coinciding with the weekend - from Thursday evening to Sunday.
To meet demand on these days, they are forced to employ staff on a full-time basis. What if F&B outlets are able to maintain a lean staff on their payroll and hire additional staff from a centralized pool of specialized labor, as and when required?
In short, have the flexibility to hire from a system that recycles trained human resources on demand, without adding to an establishment’s overheads.
For the private services industry in the UAE, which runs on low margins and staggered demand patterns, extrapolating this model will give breathing space to almost every sub-sector within it. All the while giving workers the freedom to choose their working patterns and explore other avenues of life.
Regulations can set the pace
Although new to this part of the world, TAE has been around for a long time in more mature economies where it finds value as an alternative employment model. Its effective implementation in the UAE requires the government to act as the central node of the ecosystem.
From thereon, the synergy between i) designated employment agencies, ii) the private services sector, and iii) the resource pool will carry the model forward. Here’s how it can be done:
• Employment agencies that can match applications, absorb workers, and make them available to a third-party against relevant labor contracts should function within the government’s purview for transparency and swift execution. These contracts should outline the shared liabilities and legal obligations of each party involved.
The ultimate aim of “organized temping” after all should be to promote decent work in the UAE while also providing security to the workers, many of whom are likely to be expats, in matters such as health, employment conditions, life insurance, social protection and flexible residence visas.
• The private service organizations on their part should put in place processes with a short learning curve and a safe working environment, to accommodate a rotating workforce for effective operability.
• The resource pool should be mature enough to handle exacting work, constantly honing their skills to give their best to the industry. What is seen as the gig workforce can then very well be substituted by an organized network of temp workers who take their work seriously without compromising on family and personal interests.
When these three elements of the ecosystem align perfectly, organizations get to plan revenue flows better by freeing up complex overhead costs, and workers get the benefit of setting their own idea of work-life balance.
As a country known for embracing innovative HR practices in recent years, the UAE should explore the viability of this employment model in helping the private services industry recover, for a renewed normal.
- Adeeb Ahamed is the Managing Director of LuLu Financial Group, Tablez and Twenty14 Holdings.