Gulf contracting companies are failing to train and manage their staff properly, a report has claimed.
A study by Booz and Company has found that contractors in the GCC are hiring new staff too quickly, often on temporary contracts, and failing to retain talent.
It claims that the business model, a hangover from the boom in markets such as the UAE, is not appropriate for long-term growth of the construction industry.
"Despite the significant changes in the construction industry, few contracting companies have evolved their operating model to accommodate this change and position themselves for future growth," said Ahmad Yousuf, a partner at Booz and Company.
The report blames the shortsightedness of current staffing policies on companies' focus on meeting customer demands for cheap prices and on-time delivery. As a result of this, firms fail to budget for employee training in their pricing of projects.
But it also says that the issue is as much a problem for companies as it is for staff. Many employees find themselves unable to cope with greater responsibility when they are promoted. Problems also arise when companies bring in new workers over the heads of those that have worked in their positions for some time.
"As a result, many of the incumbent employees choose to withhold their knowledge and expertise from the younger employees in a bid to maintain their control over power and decision making," the report claimed.
"This aggravates the human capital problem further since it frustrates the ambitious, new generation and creates a bottleneck during normal operations. There is also the danger of the firm losing the experience of its older generation if they chose to leave the company without sharing it with their younger co-workers. The resulting knowledge vacuum causes delays and misuse of resources."
One of the UAE's biggest contractors, Arabtech, was not available when contacted by Gulf News, while MEP giant Drake and Scull declined to comment.
But Naseem Ghori, CEO of UAE building façade manufacturers Alcobond Dubai, told Gulf News that a short-term attitude towards staff was the result of an emphasis on profit.
"If a company hires employees on a temporary basis then it shows that it is more profit-oriented. Profits are necessary for a company to survive. However proper investment in long-term development is vital for a company to succeed," Ghori said.
"Underdeveloped human resources policies in a company lead to decreased productivity, unmotivated employees and bad working conditions," he added.
Booz and Company's Yousuf said that in general companies needed to change their staffing model if they were to survive in the current market.
"These weaknesses became prominent in the GCC contracting companies during a period of rapid growth, and unless resolved they will continue to pose a long-term risk to their ability to prosper further.
"Companies need to identify and address these weaknesses as soon as possible unless they want to risk running themselves out of business," he said.
From / Gulf News