Managing Workforce Changes in Oil Industry

This assignment analyzes how businesses in the oil industry can manage workforce reductions and implement new strategies to adapt to market challenges. It outlines various approaches like layoffs, role restructuring, training programs, recruitment of multi-skilled employees, outsourcing, and collaboration with other organizations. The focus is on minimizing costs while maximizing efficiency and developing a skilled workforce for future success.

Running head: Human Resource Management 1
Human Resource Management
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Human Resource Management 2
Human Resource Management
Summary
The recruitment market of the GCC has been affected by the unpredictable economy
which has caused massive layoffs in many organizations. However, the falling oil prices in
my HR department have become an opening to restructure and refocus. A loss of $340 billion
in revenue in 2015 Manama (2016) was experienced by the oil exporting countries from the
MENA area even though the market is in the process of stabilizing with sluggish investment
in the workforce. To respond to such a shift, 40 per cent of organizations in the Middle East
is focusing on a restructuring exercise in three main areas namely nationalization, efficiency
and budget optimization. Contrariwise, the rapid adjustment in the oil prices in 2014
University of East Anglia (2016) has led to reduced liquidity and a decrease in the demand.
The restructuring of the organizational structures has been accompanied with many
remarkable implications such as recruitment of middle to senior managers and re-educating
the existing employees and reducing the size of some teams. According to Munoz et al.
(2011), The HR can assist by reducing the time it takes to the development of managers by
empowering the low-level ones. The GDP of Abu Dhabi has also been affected by the
disruption of the macro economic; however, the governments are refocusing with the aim of
strategizing their response such as Saudi Arabia (Mottaghi, 2015).
Challenges
The unpredictable economy due to the fall in oil prices will affect my business both
internally and externally. The falling in oil prices will lead to massive layoffs due to the
decline in GDP within the organization which will have a ripple effect (Iverson and Zatzick,
2011). The business will also face challenges due to the restructuring of the organizational
structure as a response to the shaky economy. The restructuring will impact on the overall
budget and efficiency of service delivery. Additionally, the reduction in the GDP will directly
lower the investment in the workforce.
Effects of the challenges on HR Strategies
The decision of massive layoffs will result in direct costs which will be incurred as a
result, and this can be in the form of severance pay to the outgoing worker and the overtime
payment to the remaining employees and the costs incurred for temporary services. Also, the

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predicted massive layoffs will lead to increased turnover from the senior employees for fear
of job security. This will affect the HR strategy of training of employees on customer service
because the employee already invested in will be gone.
The restructuring have physiological and psychological effect at the individual level
of the workers such as uncertainty, identity loss, changes in reporting associations and
recruits, all of which affect the performance of the employee and the business as a whole
(University of East Anglia, 2016). This will influence the traditional HR strategy of
recruitment practice which aims at recruiting the appropriate and qualified employees in
respective departments. Such a change may affect the quality of the hired employees which in
turn will influence the quality of service delivery (Armstrong and Taylor, 2014). The training
and organizational development of the business are likely to be affected by the restructuring.
(Ashkenas et al., 2015)
HR strategies
HR strategy for Massive Layoffs
1. Layoff planning and Strategy
Identify the issues commonly associated with layoffs through research or previous company
experience. Then determine the ways in which the layoff will contribute to the goals of the
business in addition to the particular department that require a low-cost structure for
profitability.
2. Which personnel should be involved?
To determine the employees to be affected by the layoff plan, the considerations should
include; inclusion of the line managers in the process, notification of the union leadership of
the issue at hand (in situations it exists).
3. Pre-layoff step
Necessary prevention of violence guidelines and dispute resolution should be in place, initiate
a process of escort of laid off workers.
4. The layoff process and after-math

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Identify the exact number of employees to be laid off, identify and train the people to respond
and monitor the progress, set up clear and accessible communication channels to calm
rumours, hire appropriate counsellors, and develop process of informing the affected workers.
Initiate an immediate process of discussion with the remaining employees regarding their job
safety and organizational commitment towards their work.
HR strategy for organizational restructure
1. Restructuring strategies
After the business has decided reduce the number of employees due to the nature of the
economic market, current labour market and the goals of the company, the HR can achieve
this by reducing the number of staff by layoffs, rearranging roles to develop well designed
jobs, regrouping work units for the purpose of efficiency.
2. Training and development strategies
This includes equipping the remaining employees with skills to undertake the new roles and
providing them with opportunities for development in readiness for the future positions in the
organization.
3. Recruitment strategies
This plan includes the hiring of new workers with multitasking abilities not in the former
employees in consideration of the cost benefit analysis.
4. Outsourcing strategies
The organization uses external agencies or persons to complete specific tasks which do not
require a full time employee
5. Collaboration strategies
The business can decide to collaborate with other organization with the aim of sharing the
training costs of workers and for exposing their employees to other companies to acquire
skills and insight. The primary aim of this strategy is to reduce costs while maximizing
benefits.
The fluctuations in the market prices of oil directly affect the organizational process
and practices which necessitate changes majorly in the areas of nationalization, efficiency

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and budget optimization. The human resource department is central to such changes for it
must act immediately to the evolution while at the same time safeguarding goals of the
organization and its competitive position in the market.

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References
Armstrong, M., & Taylor, S. (2014). Armstrong's handbook of human resource management
practice. London: Kogan Page Publishers. Retrieved from:
http://www.academia.edu/download/31856253/Human_resource_managment_practic
es.pdf
Ashkenas, R., Ulrich, D., Jick, T., & Kerr, S. (2015). The boundaryless organization:
Breaking the chains of organizational structure. New Jersey: John Wiley & Sons.
Retrieved from:
http://www.ccsenet.org/journal/index.php/ijbm/article/download/11576/8189
Iverson, R. D., & Zatzick, C. D. (2011). The effects of downsizing on labor productivity: The
value of showing consideration for employees' morale and welfare in high‐
performance work systems. Human Resource Management, 50(1), 29-44.
Manama, B. (2016, April). Economic Diversification in Oil-Exporting Arab Countries.
In Annual Meeting of Arab Ministers of Finance. Retrieved from:
http://www.imf.org/~/media/Websites/IMF/imported-legacy
sidebar/external/np/pp/eng/2016/_042916.ashx
Mottaghi, L. (2015). MENA Economies Hit by Conflicts, Civil Wars, and Lower Oil Prices.
Munoz Castellanos, R. M., & Salinero Martín, M. Y. (2011). Training as a source of
competitive advantage: performance impact and the role of firm strategy, the Spanish
case. The International Journal of Human Resource Management, 22(03), 574-594.
University of East Anglia. (2016). Restructuring affects staff well-being regardless of job
cuts. ScienceDaily. Retrieved from:
www.sciencedaily.com/releases/2016/02/160201220120.htm