Good Case Study About When The Product Is Human Being!
Al Manal establishment, an import manpower housemaid licensed in 1993 by Abu Dhabi Government General Security Executive Council in Abu Dhabi.MANAL was inherited from the father who established it to his sun Mohamed Saleh AlOthali who is the resident and the owner of the establishment.
Al Manal Organization’s business performance had been doing well, started with AED 100,000 of owner capital with a profit of AED 245,000 in 1995. In few periods, it had some turbulences and low performance leading to low profit between 2002-2004. The establishment faced low profit since its owner was focusing on new opportunities and opening new business in construction industry leaving AL MANAL to the current staff to run the business. Moreover in 2011 challenges grown big for the industry as the Ministry of Labor introduced new regulations like the cost of the licensing was AED 100,000 and become one million for licensing, bank guarantee from AED 5,000 to AED 50,000, license to Department of economy AED 8,000, a local manager is a must to be hired, housing for the maids, strict regulations for where the maids must finalize their medical test and Immigration Department forbidden the manpower establishment to deal with embassies directly.
The owner hired an expert manager from competitor establishment (Ex-employee in Bin Habib Establishment) to handle those issues from industrial experience in 2003 Mr. Abdulhameed.
At that time the family had some licenses inherited from the father who died back in 1990 leaving multiple licenses that were rented to strangers for yearly profit as no one had the experience to run those business. He took the initiative to take AL Manal Manpower Establishment in 1994 for manpower supply license to manage it on his own.
He Opened his first own branch in AL Muroor street back 1995, with relatively small staff and operations. Which was successful establishment in the 1990s with reputable service & customer loyalty relationship. He later opened other business portfolio in between 2001-2005 (Emirates steel establishment (Abu Dhabi, Dubai, RAK). AL Irshad Agriculture, AL Irshad pest services, Galaxy for décor work, and few others construction establishments (Desert garden & Constructing desert). This mix portfolio gave him the chance to support AL Manal establishment from other business revenue during its low profit periods.
He assigned each nationality he is importing and supplying to the market to similar staff nationality to bridge the gap of understanding human & market needs. Yet it’s very challenging to control customer & maid satisfaction relationship. When a customer comes angry to the MANAL office the strategy is to be welcomed by the relative staff who served him along with the Public Relation Manager to calm the customer down and show caring attitude that his case is very important although it might be not! The MANAL office receives complains from clients in an average of 50% out of the supplied manpower on a monthly basis. The frustration shoots up when few cases every few months reach the Police when clients report suspected theft, physical insult on children, or run away maid. The MANAL staff feels frustrated in dealing with those cases as they need them to be expert in cooling down customers who sometimes are in pain, shock & grieving if the case touched their love ones. Up to date they deal with it upon their different individual skills, they never went to training that might help them to improve their services and control their own personal emotions. The staff has always expressed their concerns of the quality of the product delivered when it’s human been and very difficult to test its quality, qualification, skills with the current lack of integrity of the foreign agencies.
As mentioned before the owner distributed the staff by the nationality they are responsible of hiring to assess the made when arrived to be welcomed by her own nationality staff. The relative staff is responsible for explaining the culture of UAE families. Advise them how to treat and overcome homesick, tips to complete the 2 years contract peacefully. The staff tends to emotionally sympathize with the housemaids welcome them, assure they get rest when arrived and a good meal. Later explain the UAE culture (dressing code, distance & physical touch), no vacation, no day out, not allowed to bring in the house of the family any stranger, not allowed to talk by the family phones without requesting permission. The MANAL staff is used to take all mobiles in the custody of the housemaid upon arrival from their countries per the practice in Abu Dhabi; this has been always viewed by the housemaid as unfair treatment as the office is taking their own assets (sometimes new mobiles). The made always expressed to the MANAL staff their frustration of unfair treatment to the labor privacy and human rights which sometimes drives their attitude toward the family they are working for, working inactively with minimal motivation, and in some dangerous cases tries to hurt the family they work for. This culture the worker lives and believes shoot fire back to MANAL establishment as a provider of labor not matching the client expectation (customer expectation & gap performance).
Business plans for setting up Al Manal Organization were developed by the owner and the senior staff. There were no mission, vision and clear strategy for targeting higher profit. Yet it was guided by business values of their housemaid's safety, customer satisfaction.to build loyalty.
The business plans were very traditional by targeting higher profit by acquiring forging agencies to supply the best available categories candidates of housemaids. ALMANAL offers supplying different occupations;
Housemaid : Philippine & Indonesia agents contracted with MANAL send their workers after being trained in in their countries institutes for all housekeeping skills (ironing, cleaning houses, washing cloths and all other housekeeping skills, cooking is subject to local training.)
Baby sitter: in this category there is the Education Bachelor degree labor, the client tends to take them to baby sit children & do school homework with them.
Cooker: Its one of the most scares resources in the agencies, it’s very difficult to find a good cooking made, Mr. Mohammed advised that he himself when he looks for good cooker he sometimes waits double the standard period for ordering a made.
Driver male & female: The preferable driver is the one has GCC driver licensing, yet not very popular to find otherwise the client order a driver with his own country driver licensing. Then the client pays the cost of UAE driving license, the period of having the license vary from one to another, causing other problems with clients who will not bear continues cost losses without being licensed and start serving them.
Gardener: usually doesn’t require specialization, if in some cases requires MANAL send the scope of work and requirement to their agents to provide.
Midwife & nurse: This category needs a nursing 2 years diploma and is required by families who has new born babies, disable family member, or elder parents who need specialized care.
Supply since establishment is from different countries; Philippine, Indonesia, Sri Lanka, India, Ethiopia & Bangladesh. The nationality of supply fluctuate in supply based on the political and economic updates
AL MANAL establishment targeted to keep good relationship with loyal customers & target to keep them satisfied by price discounts & providing extra services, like easier exchange for a nanny, finalizing their request end to end (taking the housemaid to finish the health tests & issuing for them health card & UAE ID cards).
AL MANAL establishment has been positioned as average priced compared to other Abu Dhabi manpower establishments suppliers. It was not cost leader as it had to be more expensive sometimes when it took ethical decisions, example when the embassy of Philippine tried hard to enforce the contract for their housemaids in 2012, AL MANAL advised their clients to stick to the new salary rules. Those who tried not to stick to pay the contracted salary, AL MANAL tried to offer them other cheaper nationalities to avoid violation. Although the clients were looking for cheaper Pilipino, the MANAL staff assured the owner decision to stick to the regulations, this build customer trust in the business ethics as others kept brining the Pilipino with lower salary than the contracted. The competition is high in this industry as customers open the advertisements finding tremendous number of manpower establishments, & pick up in the normal scenario the lowest prices with best guarantees for refund and exchange. MANAL owner view the competitors not only the old reputable establishments like AL NARJES services EST but also those in the other emirates like Dubai & Sharjah who by their different emirate regulations may be able sometimes to offer better prices.
فى الجزء هذا لازم نتكلم عن المنافسين ونحط قائمة بيهم ونقول انوا بيعطي اسرع وبعد بيتيح سرعة اجراءات استرجاع الخادمة وفى مدة اقل عن باقى المكاتب الخادمات عن باقى المكاتب , و لية مندوبين يخلصوا اجراءات الاقامة للخادمة بدل ما تتعب ربة المنزل او زوجها مع سعر رمزى وانهم بيجيبوا الخادمات من مكاتب موثوق فيها بتجيب خادمات مدربين وموثوق ف ثقافة مناطقهم عدم الهروب من رب العمل كحديث عن الجودة كاحد نقاط القوة لدية وان هذا مش متوفر فى كتير من المكاتب
ونتكلم فى نقطتين واضحين ومرقمين ان سياستهم فى السوق ل
opened its official operation in 1995 in Al Moroor Street. It started with few employees back then to expand to have a staff crew of 14 employees then moved to another bigger location in Tourist Club Area in Abu Dhabi. The last 4 years they changed the location to Khalidya Street in Abu Dhabi behind AL Muhairi Center to avoid the crowd area of Tourist club.
ونضيف علية ان المكان قريب من مناطق البطين والمشرف والكرامة والزعاب وشارع المطار الى بيكثر فيهم المواطنين بعد علشان الخالدية مكان بيسكن فية الاجانب والعرب اصحاب الوظائف المتميزة الي يشغلوا عندهم سائقين وخادمات لكي يسهل عملية مقابلة الخادمات والسائقين والتعامل مع المكتب بمعنى يكونوا قريبين من العميل
Focusing on other expanding the owner portfolio & business opportunities, as the owner was busy establishing new business in another field (Construction Industry & other services ) while trusting that the available employees will run & manage the office and internal affairs; this caused the company performance to go into downward trend.
The staff are acting by experience no training has been provided to extend their skills and communication skills to improve their customer service. In many cases as most of them are Asian they get scared and intimidated from some local clients threats of taking them to police if they don’t refund certain costs that are not contractually not on al MANAL. The owner handled the business up to 2002 then left it to one of the family members who was following up on the business beside his university studies (Mr. Faisal AL Othali) yet the owner connection and experience was missed. For such period the customers were complaining that they don’t have good applications, the regular customers preferred the maid with experience & good cocker. As a result of the absence of the owner and the carelessness of some employees; the level of MANAL services declined. The customers started to complain especially those loyalty customers who used to get good services from Al Manal office. In the end of 2004 the owner realized that he must go back to focus on the business as the loyal customers had communicated their feedback and concerns.
Late 2003 he negotiated hiring Mr. Abudlhameed who was working in Bin Habib establishment, as he had great experience in the industry in Abu Dhabi and had experience in leadership leading previously recruitment teams.
In December 2003 Mr. Abudlhameed arranged a trip to Asia to interview agencies looking for better conditions, guarantees and experienced & trained candidates. They succeed to sign more agreements than before to increase supplier agent’s agreements than ever before.
Main Issue: Industry Challenges & New Policies
In General business at maids’ recruitment agencies is getting slower, and supply fewer domestic helpers are flying into the country as a result of the insistence of some countries to follow their own rules rather than those of the UAE, this is the same issue Al Manal Company is suffering from low supply and qualified candidates CVs .
There are difficulties in getting new maids and nannies into the UAE when two sets of rules needs to be followed, one set from the labor sending country and one set from UAE, especially when these rules are constantly changing as each labor sending country has different policies based on their own labor laws on the minimum age and minimum salary for the maid, on the prescribed working days, among others.
Ministry of Labor in the UAE aims to standardize these requirements through the unified contract. But to be able to do this, countries with existing labor laws will have to agree with the changes
In 2002-2004 the owner explained that another reason for 2002-2004 lower profit was due to the big competition with big companies in Saudi Arabia and Qatar who goes to Asia with huge liquidity taking most of the good business there, leaving for MANAL the left overs agencies. The owner targeted to increase the liquidity for agencies advances to be able to pay higher deals to foreign agencies comparing. The prices for those foreign agencies kept increasing due to completion from different countries of the world, Mohammed,2014.
In /2011 the Ministry of Labor issued new regulations for this industry, increasing the License from AED 100,000 to one Million onetime payment blocked as long as the license is active, and bank guarantee from AED 5000 to AED 50,000, License to Department of economy AED 8000. This huge jump of expenses caused the company to lose a big portion of their income to cover the additional costs reflected in the lowest record revenue ever achieved.
Also The UAE Ministry of Interior introduced the new standard contract for housemaids on June 1, 2014 to protect the interests of both housemaids and their employers this led to a shortage of maids especially from the Philippine’s nation which already imposes strict measures in maid deployment from their home country. Before this standard contract was introduced as the Philippine laws mandate them to verify contracts for housemaids before deployment to ensure that their rights are protected, without necessary verification, they cannot deploy housemaids.
The verification of contract is to ensure that they get a minimum $400 (AED 1,469) as a monthly wage, a minimum age deployment of 23, a weekly off, and no placement fees, among others.
In UAE manpower supply establishment like MANAL were stopped to deal directly with embassies. It says recruitment agencies should not require potential employers to deal with embassies when signing contracts for domestic staff.
Once the contract was ratified, the Philippines overseas labor office would issue a letter of verification, permitting domestic staff to travel to the UAE. However, now the Philippines refuses to approve the new standard contract, so there are no letters of verification. That means domestic staff hoping to work in the UAE cannot legally leave the Philippines.
Philippine workers who are eager to work leave their home country for a visit to a close by country, and depart to GCC to work violating their own country regulations. In UAE they are welcomed when they do so as the Immigration issues their visas normally. Those group works with the old conditions and salaries.
In addition a ban on visas for Ethiopian domestic helpers to the UAE, which was imposed in 2012, is still effective and the Indonesian government is also currently making changes in its deployment policies, which has affected maid supply and accordingly caused shortage of housemaids and nannies in the industry, MANAL survived those challenges due to long experience in the field, the owner cash liquidity strength, & the high number of suppliers agreement they kept focus on increasing. When one nationality supply becomes limited they act quicker with other nationality to compensate the low supply. Some businesses couldn’t stand the storm and closed their business>>>Names as example-manal
Based on the above it has been a drastic drop in the number of available housemaids and a market shift in favor of the housemaids not the recruitment agencies as without new recruits their bargaining power has increased, example of that demanding much higher salaries than the legal minimum.
With the increase number of competitors who are working in the same field as Al Manal and demand from the clients of high and specific of standards for their recruited housemaid or nanny, such as language, age and experience when in the same time taking into consideration the difficulties arouse when obtaining a maid into the country this caused the company business.
On the other hand the challenge of having returned housemaids and nannies from their clients have a big impact on the company performance, it is just like have to remove a faulty product from the market for a production company. The reasons of having returned domestic helpers can be due different reasons as a common complaints by maids range from being made to overwork, being underpaid and underfed, being denied opportunities to visit their families in their home countries and physical abuse, sexual harassment, among others.
In the same hand we can not ignore the clients side of the story as according to the police, crimes involving housemaids went up 20 per cent in 2009 as compared to 2008. In 2009, 451 crimes involving housemaids were recorded, up from 341 in 2008. In these cases, 17 children were assaulted by the domestic workers.
MANAL as a recruiter will need to try bias between the worker and the clients to try to resolve to conflicts, this can by done by first studying the reasons the client wishes to return the helper or the reasons the worker wishes to return back to her home or having another family to work for. If the problem was not resolved within three months the domestic helper will be returned back home and the client will be provided with alternative helper for free which means loss for the company however, if the issue was from the client then the maid will be given another opportunity to work for another family.
MANAL in 1995 tried to establish relationship with foreign agencies in Indonesian & Philippine & other nationalities. The contracts with those agencies was very limited, as the establishment had relatively small team of 3 (manager, 2 staff) back then. Nowadays it has 13 employees’ specialized staff for each nationality.
The foreign agencies provide the housemaids supply needed to be promoted and distributed for customers; the customer comes and selects his order via internet and web site or by presence in MANAL office. The higher foreign agent contracts the higher the supply of candidates accordingly MANAL tired multiple times during low profit years to target more qualified agencies in Philippine and Indonesia as those two nationalities are the highest demanded.
The agency contract states both parties' responsibilities & rights, AL MANAL pays the agent agreed margin, agent provide (50-100 house made) minimum monthly. The agent is responsible for submitting valid CVs to MANAL establishment; assure deployment of the selected worker within 20 days after receiving the visa & ticket. If the worker canceled the agent pays for the visa processing fees.
The agent shall provide 3 months probations period, for medically unfit & refusing to work even if the reason is homesick. AL MANAL will deduct remittance and cost of two way ticket from agent. If worker refused to work, the agent must solve the problem within 7 days, otherwise AL MANAL send the worker without notice deducting all the cost from agent.
The agents must provide the correct information about the worker (Real age, marital status, work experience, language, education, skills, & recent photo), otherwise MANAL has the right to return the worker because of incorrect information as this is deceiving the MANAL clients.
Although there is a contract binding those agreements with the foreign agencies, it happened multiple times that MANAL never heard of few African & Indonesian agencies after receiving the advances! Al though MANAL tried to obtain bank guarantees to protect its right, it incurred some losses from unethical foreign agencies.
On the other side of the river, MANAL provides the clients with standard guarantees! The Client may exchange his/her selected/delivered housemaid, refund the housemaid cost within the probation period. On the other had If the housemaid runs away, the client will not be refunded and carry the whole loss (AED 14000-16600) as no guarantee is provided from the agents on such cases (They ask client to sign on those conditions when they take their housemaid). Discussing this particular condition with Mr. Mohammed he explained that if a client takes his case to the Immigration Authority & file a case against MANAL establishment or any other manpower office, the client might be refunded his losses! Yet as this is frequently happens and the worker is under the custody of the client, the agent doesn’t refund MANAL for those cases, accordingly MANAL can’t beer those losses from multiple clients.
The prices of the housemaids were low back in 1995 where it used to cost between AED1500-3000 based on the nationality (AED 1500 for Indian, AED 2500 Indonesian, AED 3000 Philippine). The prices kept inflating with the time till it reached in recent years AED 14000 to AED16600 for Indonesian & Philippine, in the main while Mr. Mohamed advised the profit didn’t change much as the profit margin kept stable in average of AED 1000 to AED 1500 per housemaid. The other inflated cost went to cover the increases in all other manpower importing expenses. For example out of the AED 16600 for Philippine made AED 15,000 goes fully to Philippine agent to cover the cost of medical check, the compulsory training cost even for the experienced made (way for the importing country to gain more money), one way ticket & any related embassies expenditure. The rest of 1600 covers the internal cost varies from one worker to another average of AED 400 for picking up from airport, accommodation till client pick up and meals.
Al Manal’s performance between the years 2002-2004 was considerably poorer than in the previous years since it was established. Profit decreased reflecting turbulent between 2002-2004 profits reached its minimum AED 524,100 in the last 5 years. MANAL’s problems were attributed to a combination of several internal and external factors.
Heading to Ambiguity
Khalifa City is one of the most dynamically developing parts of Abu Dhabi. Up to date it consists of three separate administrative divisions – Khalifa City A, Khalifa City B and New Khalifa Cit. The last one is specifically focused on the young families. In order to address the rising population density, a branch of the company will be opened in each of the districts.
Considering the fact that the workload is expected to be high in the discussed regions, the newly opened departments must be capable of functioning on a fully autonomous basis. In other words, bookkeeping, legal and financial professionals should be located there together with the operational staff.
Furthermore, since Khilifa City can be regarded as a new, autonomous market, supervisory officers should be assigned to those divisions as well. This step will ensure that customers expectations are met.
The tables given below indicate that the venture in question is expected to be a profitable one. A steady growth of the entity commercial operations is clearly observable. Although insignificant decrease of the collected revenues is observable, these phenomenon can be attributed to the capital investments made by the company.
Financial statements analysis
The analysis of the financial statement indicates that the developed venture will be a considerably profitable institution, although significant resources will be allocated for capital investments. In particular, the most consuming area of the company operations will be linked to the Department of Economy, financial remuneration of the employees and fuelling of the company cars. Other overhead expenses are relatively tolerable by the contemporary market scales.
Overall, the positive nature of then financial statement shows that the discussed project is worth being implemented. The use of the recent technological accomplishments will enable to reduce the discussed expenses in the long run.
Expected maid in 2015-2016
Considering the fact that Abu Dhabi is one of the most dynamically developing commercial hubs, further expansion of the discussed institution is possible. Furthermore, its transformation into a housing construction company is possible. The managerial staff will be invited from overseas. The operatives will be hired from the available local workforce. In order to ensure compliance with the legislative framework of the United Arab Emirates, employment contracts will be created between the company and the local staff, while for the foreigners residence permits will be arranged.
In order to solidify the image of the company, franchise agreements with the leading construction institutions will be entered into. This option will substantially contribute to the increase of the potential customers and retention of the existing ones.
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