Age-old problems

The
mix of cultures throughout the region, combined with the lack of technological
infrastructure make Africa and the Middle East difficult markets to enter, says
Alan Hosking

Because
emerging countries are generally lagging behind with regard to globalisation
trends and practices, most of them present their own unique set of HR
challenges. Generally accepted practices and thinking cannot be taken for
granted, and in order for companies to avoid serious financial loss or legal
action, it is important for them to familiarise themselves thoroughly with
local legislation, customs and conditions in countries they propose entering.

However,
this has not hindered numerous multinationals such as Sweden’s Volvo or Korea’s
Hyundai from developing a presence in such regions. Two other multinationals
dominate their sectors on the African continent. McCann-Erickson has the
largest marketing communications network on the continent, with full service
agencies in 23 African countries, where they are building over 30 international
brands such as Motorola and Coca Cola. The Ernst & Young Africa Group has a
network of 27 offices covering 51 African countries, offering what they call an
"on-the-ground" service. Their offices are staffed by 11,000
professionals across the continent, over 400 of whom are based outside South
Africa.

South
Africa is referred to as the economic powerhouse of Africa for good reason. Its
business infrastructure is of a first-world standard, which has resulted in
most multinationals having a very strong presence in the country. South Africa
is, in many cases, used as an "African headquarters". Since the
demise of apartheid legislation, more and more multinationals are appearing in
the South African market place. Ford has returned to the country after years of
absence, and this trend continues.

Labour
laws in developed countries are very different from those in Middle Eastern and
African countries. In the United Arab Emirates, no unions or strikes are
permitted, and foreign nationals risk deportation should they attempt to engage
in any union activity or organise strikes. Workers are also forbidden by law
from collective bargaining. Saudi Arabian regulations also forbid union
activities.

Research
by international management consultants PricewaterhouseCoopers reveals that HR
managers in the Middle East have been very slow to embrace new technology and
e-business, and they have been reluctant to use modern IT and Internet
techniques to improve operational efficiency.

In
addition, findings indicate that HR managers play a far less significant role
in their companies than their European counterparts, with administrative
activities accounting for about 50% of their time. Local HR skills therefore
tend to be more administrative than strategic and business-driven. However, the
gap is narrowing.

HR
people in the Middle East are generally not regarded as having sufficient
skills to fulfil the four key roles required in the region, namely that of
strategic partner, administrative expert, employee champion and change agent.

A
Deloitte & Touche Middle East survey highlights employee retention as a
challenge in Middle Eastern countries. The survey points out that to try and
retain staff, HR managers have to take into account conditions in the external
market and in the workplace. It recommends that once a company has identified
its most valuable people, proactive strategies should be put in place to retain
these resources. Other factors to emerge from the survey were shortages in the
labour market, which contributed to high turnover, uncertainties in the
workplace and organisational turmoil.

Local
customs can also affect the way businesses are able to operate. In Oman, for
example, non-Muslim workers are required to respect daytime fasting in the
month of Ramadan by not eating or drinking in public. Despite such
requirements, however, Oman is considered very attractive to foreign workers as
it has generally good living conditions.

African
countries present their own challenges for HR professionals. All have very
different labour laws and while some countries are attempting to become
investor-friendly, others are making it more difficult for themselves to
attract foreign investment due to restrictive labour and other laws, and bad
mismanagement at very senior levels.

South
Africa has five legislative Acts that regulate employers. These are the Basic
Conditions of Employment Act, the Labour Relations Act, the Skills Development
Act, the Skills Development Levies Act and the Employment Equity Act. They
apply to all business activities operating in the country, whether foreign or
local, and carry penalties for non-compliance.

On
the other hand, technological infrastructures in the business centres of South
Africa are generally world class, and HR has embraced the Internet as a means
of doing business, with some very active on-line recruitment firms such as
CareerJunction and Jobfood gaining high prominence. More and more HR services
are Web-based and HR practices are, in some cases, on a par with first-world
standards and in certain specific disciplines quite possibly ahead.

Immediate
past president of the Institute of People Management (IPM) in South Africa,
Tiisetso Tsukudu, says there is an increasing pool of highly skilled people in
Africa who have received excellent training in the US, UK, Europe and
elsewhere. They have brought their skills back with them on returning to their
home countries and are now in top-paying jobs in the fields of telecoms,
finance and mining, among others.

Tsukudu
says that ethics in business, on the other hand, is a huge challenge facing HR
in Africa. In some countries, corruption has become so endemic that it is
almost an accepted way of doing business. In Nigeria, where years of looting
government coffers has resulted in a lack of funds to pay workers, people in
the workplace are severely demoralised because they are owed salary arrears for
many months. This general demotivation has permeated all levels of the
workplace, resulting in productivity problems.

Another
challenge in the workplace in African countries concerns the impact of AIDS.
Durban-based MD of Vizual Business Tools in South Africa, Dawid Swart, says
that discussions with Malawian HR managers have revealed that a major portion
of their working time is taken up arranging and attending the funerals of
employees who have died of AIDS. Tsukudu agrees that HIV/AIDS is affecting
people’s roles at work, pointing to a new phenomenon in the workplace known as
"funeral fatigue".

AIDS
is no longer affecting only the unskilled and the uninformed in central and
northern Africa. Despite better education and training, many professionals in
these countries have also contracted HIV because of longstanding superstitions
and cultural beliefs. In South Africa, there is a high level of awareness of
the impact of AIDS in the workplace and numerous consultancies with qualified
medical doctors provide specialised support for companies in the management of
AIDS among their workers. Risk managers and actuaries also provide financial
planning and projections to enable companies to plan strategically and minimise
the effect on the company.

Diversity
management is also a challenge in Africa. With so many different cultures and
creeds, and with xenophobia being a very real problem in African countries, HR
directors have to ensure that culture integration and the integration of
expatriates is handled by experienced experts. A case in point is the work
being done by UK-based Dr John Wenburg, president of Pecos River Aon Consulting
for British Airways in Africa. Wenburg says that BA has moved away from using
expatriate managers to appointing managers from the country they are operating
in, and this has resulted in their having to deal with major diversity issues.

While
all people issues are complex, Middle Eastern and African countries present
added complexities because of the dynamics that have been in existence there
for centuries. The challenge for HR therefore is not to attempt to eliminate
these complexities, but to manage them within certain parameters.

Who’s
going where?

Africa
is fast-gaining interest from Western investors. For example:


Korea’s Huyundai and Sweden’s Volvo both operate from Botswana


Canadian-owned marine minerals corporation Afri-Can has a strong presence in
Namibia


McCann-Erickson has agencies in 23 African countries


Ernst& Young Africa Group  has 27
offices covering 51 African countries

Further
information

Probably
the most comprehensive Web site for business and other information on Africa is
South Africa-based www.mbendi.co.za, which features a unique one-stop
information, intelligence, research and advisory service called African
Resource Network for companies and business people wanting to do business in
Africa.

Other
useful Web sites:

PricewaterhouseCoopers:
www.pwcglobal.com

Deloitte
& Touche: www.dttus.com

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