Human capital development in the UAE Islamic banking sector: addressing the challenges of Emiratisation
Creators: name: Qambar, Amal Sabah Obaid
Publisher: name: Cardiff Metropolitan University
Year: 2022
Subjects: Financial institutions (incl. banking)

description: 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.