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Human capital development in the UAE Islamic banking sector: addressing the challenges of Emiratisation

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posted on 2022-10-17, 13:23 authored by Amal Sabah Obaid Qambar

The  development  of human  capital often  faces  challenges  due  to skills  gaps in  the  labour market and  this  is  exacerbated  by  the distinctive  differences between  the  skills  gained through education and those required by the private sector. Such imbalances challenge the success  of  the  Emiratisation  policy  and  therefore  the  intention  of  the  government  in creating a knowledge economy. The financial sector has a complex operating environment compared  to other  sectors  because  of  the  financial  regulations  and operational  processes. This creates challenges  in  terms  of  having  the  right  people  in  the  right  job, as  well  as complying with the Emiratisation policy. Human  capital  in Islamic  financial  services  may  stall  the  growth  of  the  sector, due  to  the fact that there is a lack of essential training programmes, entry requirement and retention in this   sector   due   to management   and   cultural   differences,   a   lack   of   support   and encouragement,   absence   of   career   progression   or   personal   development,   unrealistic expectations, competition and confidence issues and lack of teamwork for new entrants as well   as   senior   managers.   Consequently,   understanding   the   factors   influencing   the challenges of  Emiratisation will  help  improve the  human  resource  development  practices of senior Emirati managers working in Islamic banks. Therefore, this study develops a framework for human capital capacity building in Islamic banks  in  the  United  Arab  Emirates  (UAE)  in  order  to  counteract  the  challenges  of Emiratisation  and  improve  the  human  resource  development  practices  of  senior  Emirati managers  working  in Islamic  banking.    In  the  process,  the  study  adopts  the  Spellerberg (2001)  model  from  which  attitude  and  behaviour  can  be  taken  into  account  given  the interdependent relationship that exists between human and social capital.In responding to the aims of this study, a questionnaire was undertaken with seven Islamic banks in UAE. A total of 182 responses were received. Also,secondary analysis research was conducted to explore current  best  practice  used  intheinternational  banking  sector in  regards  to developing human capital.The statistical  results  reveal (eight)  variables  that  significantly  impact the  use  of  human capital for Islamic bankingin the UAE: (a) trust and reciprocity; (b) networking; (c) wasta; (d)  attitude  and  behaviour;  (e) uncertainty  avoidance;  (f) years  of  service  in  conventional bank; (g) Islamic values; networking; and(h)individual/collectivist. The findings indicated that investing  in  human  capital  and  augmenting  it  along  the  way is  highly  important. Hence, organisations  could  be  the  trigger  that  generates  knowledge  through  individuals who   are   part   of   the   said   organisations,   which results   in   enhancing organisational performance  and  develops  social  capital  as  well.    It  also  shows  that  cultural  and  social issues  have a great  impact  on  organisations  and  individuals’  attitude  and  behaviour. Further, it highlights that the principles of Islam influence human capital and social capital development  owing to the  fact  that  it  shapes  individuals  and  organisations  perceptions, feelings and acts towards others. The study has significant implications for banks in the UAE in providing a direction for human capital building in Islamic banking. The framework developed in this study is a major contribution to current theories and practices in the field of human capital and social capital which demonstrate the Emiratisation policy challenges within the financial sector,as well as how cultural and social issues impact on organisations and employee performance in banks. 



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