1.1. About BTN Company
BTN is a private
company providing management consultancy services and located in Ras Al
Khaimah, the fourth largest of the seven Emirates forming the United Arab
Emirates. The company was founded in 2003 with a vision to help local
organizations improve their performance by providing solutions, new strategies
and best practices.
The Company has
over 40 qualified employees belonging to 10 different nationalities. The
company is spending around 10% of its annual expenditure on recruitment and
development of its human resources.
The company
believes that its long term success is depending on the loyalty and quality of
its human resources and also that loyal employees can create loyal customers
(McCarthy, 1997). This is significant because there is a lack of employee
retention in UAE and good employees can quickly move to other companies to look
for better opportunities. The employee retention in the company has the same
behaviour as in the region as 4 employees have left in the previous year while
2 have joined up. Although the company spends good budget on employee
development but still it is not enough to turn the tides in the face of moving
employees. The company has the usual policy of giving away gratuity at the end
of employment which depends upon the number of years of service and it is a
onetime payment given at the close of service period. This payment is never
invested anywhere by the company and it simply depends on the current position
of an employee. There are no additional benefits that are offered at the
company although the employees are free to contact any individual financial
advisor who can devise them a personal saving plan for future pensions. Such
plans are not present at the organizational level and mid level organizations
such as BTN Company are suffering from the loss of important talent that would
otherwise stay in a place for longer period and therefore produce better and
long time results for the organization (WEF, 2014).
1.2. Research Significance
The topic of this
research was chosen due to the importance of pension scheme and retirement plan
for any employee anywhere. The absence of such plans in the UAE affects the
long term domicile decision of expatriates and makes the country a transient
place to work for 5 to 10 years maximum, but not to live permanently.
The researcher is
an employee of BTN and aware of the serious impact of the absence of a federal
pension scheme on the loyalty & motivation of the staff and on the long
term success of the company. The researcher is aware that the “end of service
gratuity policy” is not encouraging staff to stay in the company for a long
term as they will be always looking for another company offering a high salary
to make their end of service higher. The company is spending significant funds
on recruitment and staff development but if its staff can’t be loyal also its
customer won’t be too.
Since the
establishment of the company, 44 employees have left the company: 75% of them
have resigned and the other 25% were terminated. The researcher has learned
through discussions with the previous staff that one of the common reasons was
the instability and insecurity caused by the absence of a federal pension and
retirement plans in the country.
0 comments:
Post a Comment