When The Product Is Human Being! Case Study Samples

Introduction:

Al Manal establishment is an import manpower housemaid that was licensed in 1993 by Abu Dhabi Government General Security Executive Council in Abu Dhabi. The firm is a family and was handed down by the founder to his Mohamed Saleh AlOthali, who is the current owner of the establishment.
Al Manal has experienced financial success over the years. It was started with AED 100,000 of owner capital. It broke even within the first 2 years of establishment and returned a profit of AED 245,000 in 1995. The profits have been increasing ever since. However, it experienced some turbulences and low performance leading to low profit in 2002-2004. IT could be attributed to the owner’s focus on new opportunities in the construction industry at the expense of Al Manal. In addition, the Ministry of Labor introduced new regulations that significantly increased operational costs of Al Manal. For instance, the cost of the licensing was increased from AED 100,000 to AED 1,000,000, bank guarantee was increased from AED 5,000 to AED 50,000. Besides, it obligated it to hire a local manager, provide housing for the maids and strict regulations for where the maids must finalize their medical test in conditional hospitals to assure the quality of reports.
The owner hired Mr. Abdulhameed as an expert manager from Bin Habib Establishment, which is a competitor establishment, in an effort to turn around the fortunes of Al Manal. He travels regularly to renew agencies agreements and bring more valuable agreements. In addition, Mrs. AlaaALOthali joined her family business as General Manager of the establishment towards the end of 2011. The two new employees proposed future plans to the owner to turn around the fortunes of the entity.

The Owner:

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 percent as no one had the experience to run those businesses. Mr. Mohamed Saleh AL Othali took the initiative to obtain a manpower supply license for AL Manal Manpower Establishment in 1994 and manage it on behalf of the family.
He opened the first branch in AL Muroor Street in 1995 with a relatively small staff and operations. It became a successful establishment in the 1990s with reputable service & customer loyalty relationship. He later opened other business portfolios in between 2001-2005 including; Emirates steel establishment in Abu Dhabi, AL Irshad Agriculture, AL Irshad pest services, Galaxy for décor work and Desert garden & constructing desert. This diversified portfolio gave him a chance to support AL Manal establishment using revenues from the other entities when it was in low waters financially.

Culture

Al Manal tries to match maids from each nationality with staff from the same nationality or at least same culture in order to bridge the gap of understanding human and market needs. It very challenging to control customer and maid satisfaction relationship. When an unsatisfied customer comes angry to the Al Manal office, the strategy is to be welcomed by the 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. AL MANAL office receives complaints from clients in an average of 50% out of the supplied manpower on a monthly basis. The challenges are even worse in a few cases that reach the Police when clients report suspected theft, physical insult on children, or run away maid. Al MANAL staff feels frustrated in dealing with those cases as they are expected to calm down irritated and unsatisfied customers and convince them their concerns will be solved without any formal training on customer service and psychology. The staff has always expressed their concerns of the quality of the product delivered when it is human beings is very difficult to test its quality, qualification, skills with the current lack of integrity of the foreign agencies.
As mentioned before the owner divided the staff by nationality so that staff from each nationality can deal with maids from the nationality as it would be easier to understand them. The relative staff is responsible for explaining the culture of UAE families. Advise them on how to treat and overcome homesick and provide tips to complete the 2 years contract peacefully. The staff tends to sympathize emotionally with the housemaids, welcome them, and ensure they get some rest when they arrive and a good meal. They later explain the UAE culture of dressing code, distance & physical touch. They are also explained to the contract provisions which include; 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. Al MANAL staff takes 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 and an infringement of their personal rights. The maids always expressed to the MANAL staff their frustration of unfair treatment to the labor privacy and human rights. This sometimes explains their attitude toward the family they are working for, why they work inactively with minimal motivation, and in some extreme cases why they try to hurt the family they work for. In this regard, Al Manal, fails to match customer expectations and gap performance.

Business Model

The Business plan for setting up Al Manal Organization was developed by the owner and the senior staff. There were no mission, vision and a clear strategy for the firm. It was guided by business values of their housemaid's safety, customer satisfaction and 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. AL MANAL offers supplying different occupations;
Housemaid : Philippine & Indonesia agents contracted with Al MANAL send their workers after being trained in their countries institutes on all housekeeping skills including; ironing, cleaning houses, washing cloths and all other housekeeping skills.
Babysitter: in this category there is the Education Bachelor degree labor, the client tends to take them to babysit children and help their children with school homework.
Cooker: Its one of the most scares resources in the agencies. It is very difficult to find a good cooking maid. Mr. Mohammed commented that it takes him double the standard period for ordering maid when he wants a cooking maid.
Male and female drivers: The preferable driver is one with a GCC driver licensing which is not very easy to find. Therefore, the client orders 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 problems with clients who will have to bear cost losses before the driver is licensed and start serving them.
Gardener: usually does not 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 have new born babies, disabled 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 fluctuates 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 and 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).

Positioning

AL MANALestablishment 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 recruiting the Pilipino with lower salary than the contracted.
Competition is high in this industry due to the high number of establishments. A customer has a wide variety of manpower establishments to choose from. Normally, customers pick up 2-3 to visit or view the website then goes for the lowest prices with best guarantees for refund and exchange. Al MANAL owner view the competitors not only the old reputable establishments like AL NARJES services EST& Bin Habib who started with AL MANAL, but also those in the other emirates like Dubai who by their different emirate regulations may be able sometimes to offer a bit better prices. He explained that as the costs are fixed by embassies, ministries and internal affairs departments the costs is almost fixed for all the competitors, the rest of the cost is minimal to lead to cost discrimination leadership. Mr. Mohammed advised that the bottom line of the competition is the “Quality” & “Variety” of CVs available for client. The client is looking for experienced skilled labor with degree. AL MANAL has vast experience of 20 years and survived competition and was always one of the best suppliers in the market. Between1995-2007, its famous competitors were “AL NARJES” &“Bin HABIB”, nowadays ALMANAL don’t consider them equal competitors anymore as they are behind AL MANAL. The current competitor in Abu Dhabi in the 2010-2015 I,ALMadina Agencies & Services &AL AHLIAY in Dubai. Those competitors are providing more than AL MANAL construction labor not only housemaids.
AL MANAL opened its official operation in 1995 in Al Moroor Street. It started with few employees back then to kick off the operations. The location was chosen as it is closer to the local inhabitant areas AL Mushrif, & AL Muroor. After AL MANAL was known to the clients and established its reputation it moved to another bigger location in Tourist Club Area to accommodate the expansion in both staff and operation. In 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, and car parking bottleneck. The owner had a great bargain to rent it for 5 years at fixed reasonable low rent price from a friend, which was great in the current increases in rent. The location is central and an active area in Abu Dhabi it is close from Cornish area where wealthy expat prefers to live. It is close to AL Bateen area, AL Kharamah, AL Za’ab areas where also locals are populated. Being close to Local families is very important as they approach AL MANAL for two housemaids, one driver & Gardner every 3 years in average as many families with good treatment to their housemaids maintain their modes more than the two years contract.
MANAL website: http://manalmanpower.com/applicant_category.php?category_id=1Address: P.O. Box 44282 Abu Dhabi, Telephone: 00971 2631 8822, Fax: 00971 2631 3399 Email:

Operations

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 following are the usual step in MANAL establishment for customersorder of different types ofhousemaids, and these steps are as follows:
After ordering, the client pays AED 1,000 as a deposit and one copy of his passport and one personal photo to start the visa procedures in 15 days; and if the customer does not finalize the visa, or even do not bring the visa in 15 days, the deposit is not returned back to the customer.

After finishing the visa, the client pays half or the entire housemaid’s costs.

AL MANAL Establishmentapproves the work contract with the embassy before and sends the visa by email to the agents outside UAE. Now due to the changes, the contract will be signed in UAE embassy in the housemaid country after passing the security & heath check.

The office sends the other contracts approvals, the examinations and tickets booked for the housemaids in 45 days.

AL MANAL office communicates to the client the housemaids arrival date, clientpays the remaining costs upon delivery. In the meanwhile the housemaid is lectured about the UAE culture and tradition and duty expected. Al MANAL staff informs him/her the regulations in UAE, encourages the housemaids for work and gives them the address of the office for any complaints, urging them to seek the office for help not to run away.

The client has the opportunity to interview the housemaids to see the extent of his/her experts.

The office takes a photo copy for the contract between the client and the office, the contract between the office and the agents, the contract between the client and the housemaids, and the housemaids CV.
The client has 3 months to examine the housemaids in getting her/his work done in perfect way, then he/she can return the housemaids back or get the final contract to keep her/him for 2 years or more depending on the contract.

Last, the office keeps on checking each year with the customer as a customer service to ask for some complaints.

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; assuredeployment 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&Indonesianagencies 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, AED3000 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 16600for 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

Turbulent times due to Industry & internal factors:

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 2011. MANAL’s problems were attributed to a combination of several internal and external factors.

Internal Factors:

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 the available employees to run & manage the office; this caused the company performance to fluctuate between 2002-2004 to 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 refundable. The owner handled the business up to 2002 then left it to one of the family member who was following up on the business beside his university studies (Mr. Faisal AL Othali) yet the owner connection touch and experience was missed. For this period the customers were complaining that they don’t have good applications, the regular customers preferred the maid with experience & good cocking skills. As a result of the absence of the owner and the lack of experience 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 2003 the owner realized that he must go back to focus on the business as the loyal customers had communicated their feedback and concerns to him directly in multiple occasions.
Late 2003 he negotiated hiring Mr. Abudlhameed who was working for a competitor in Bin Habib establishment, as he had great experience in the industry in Abu Dhabi and had experience in leadership leading previous recruitment teams in BIN HABIB.
In December 2003 Mr. Abudlhameed arranged a trip to Asia to interview agencies looking for better conditions, guarantees, experienced & trained candidates. They succeed to sign more agreements than before to increase supplier agent’s agreements than ever before.

Industry Challenges &New Policies

In the past five years regulations in Manpower is changing, ingeneral 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.
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 supply 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 amendments.
In 2002-2004 the owner explained that another reason for 2002-2004 lower profit was due to the big competition internationally from different countries of the world targeting the low cost labor in Asia & Africa. Example was the 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 over agencies. The owner targeted to increase the liquidity for foreign agencies advances to be able to win valuable deals & elite foreign agencies to provide his loyal customers with the best labor he can be proud of. Due to this completion & annual inflation the prices for those foreign agencies kept increasing yearly.

Industry Factors:

In /2011 the Ministry of Labor issued new regulations for this industry, increasing the License cost from AED 100,000 to one Million Dirham onetime payment kept guarantee as long as the license is active. Increased annual bank guarantee from AED 5000 to AED 50,000. Hire a Local manager,pay for 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.
Once the contract is 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 (Hong Kong, Malaysia, Singapore),then 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.
Additional supply matter was the 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 in the industry, MANAL survived those challenges due to long experience in the field for 20 years, the owner cash liquidity strength enhanced his position, &the high quality of suppliers agreements they kept focusing on maintaining ( up to 2003 one agency for each nationality, after 2004 for each nationality 3 reputable big agencies) . When one nationality supply becomes limited they act quicker by focusing on another nationality supply to compensate the low supply. Some businesses couldn’t stand the storm and running for very low profit. Currently they are not importing Philippine maids and focusing on Indonesian and increased the agents to 4 agents to compensate the cease supply from Philippine.
Another change in the industry is that in UAE manpower supply establishment like Al MANAL were stopped to deal directly with embassies. Recruitment agencies should not require potential employers to deal with embassies when signing contracts for domestic staff. This rule on Philippine, Indonesian & Siri Lanka now and may extend to other nationalities any time. This big change occurred enforced the manpower suppliers who wish to issue a visa for those nationalities to direct those to go to the UAE embassy in their countries and do health & security check (finger & Eye prince), if they pass those tests they can resume their visa deployment. This was huge change that clients admired as the tests will be reliable not like before subject to the flexibility and fraud of those countries.
Based on the above it has been a drastic drop in the number of available housemaids clients tended to maintain their current maids by offering salary increase till those changes are stable. In the same time Philippine maids are afraid to go for vacation and not be able to find work again. With the increase number of competitors who are working in the same industry as Al MANAL and demand from the clients of high and specific standards for their recruited housemaid or nanny, such as language, age and experience when in the same time taking into consideration the difficulties arouse in importing the maids, the available supply went to those who have qualified foreign agent, this reflected in the profit maintained by Al MANAL the last 3 years.
On the other hand the challenge of having returned housemaids and nannies from their clients has a big impact on the company performance; it is just like removig 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 forced 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 cannot 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.
Al MANAL as a recruiter acts in each situation differently, sometimes acts with bias between the worker and the clients to try to resolve to conflicts, this can be 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.
The owner explained his worries of the current situation with Philippine as their recent requirements are not welcomed by the UAE families in particular & immigration departments. The demands includes one day off, using mobiles, working maximum 8 hours. For UAE nationals they are used to the maids living with them, a day off is not easy to swallow, some conservative families see it as a door for trouble and intruding their home privacy. The major difficult condition is the maximum working hours of 8 hours, huge reluctant from the clients where shared with Al MANAL staff when they heard about this, they said they are helping with home daily works that are spread over the day not focused on straight 8 hours, they can have their nap, break and they have the advantage of free accommodation and food, why to bother will move to Indonesian, the cost is not only money any more, its dramatic change that is not comfortable at all to clients.

Profits analysis

Profitover the years; source Mohammed AL Othali, owner:
Provided by MANAL owner:
The tables given indicate that MANAL establishment has had succeed to achieve stable supply of maids in average of annual of 1400 maid, monthly average of 120 maid over the last 5 years.
A steady growth of MANAL operational revenue over 20 years is observable. The tables reflect the information provided earlier by the owner in profit decrease in2002 &2003 due to low quality supply due to owner absence. Although the highest recorded supply of maids was 1653 maid in 2011, it was a companioned with significant decrease of revenues due to the phenomenal new regulations costs. Otherwise stable revenue is maintained over the 20 years of operations.
*1,225,700 profit was sucked by 1Million paid to renew the license leaving the profit only AED 225,700

Heading to Ambiguity

In 2014 Mrs. Alaa Al Othali MANAL General Manager proposed to the owner new expansion plans. She joined late 2011 per the new regulation in 2011 to hire Local Manger. After spending two years in the business she prepared expansions options to open new branch. She advised that 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, and Khalifa City B. These new areas are specifically focused on the young& local families. In order to address the rising population density, a branch of MANAL manpower supply is a prospering expansion option to observe the demand increase & to have bigger portion of the industry promising profit.
Her proposal included suggestion of establishing strategy, changing the web site image, add to the website mission, vision, values to reflect higher standards of focused management approached. If going for opening new branch she suggested hiring more Arab native speakers as this will be good timing to inject Arabs to the current staff, as the current staff are loyal and been with the office for long years and no one wants to replace them. She advised that this will contributesubstantially to the potential customers and retention of the existing ones.
On the other hand, Mr. Abdulhameed suggested not to expand now, the changes are huge in the industry, human rights are active for labor rights & maximum hours worked, those changes may lead us to change the business into part timers maids, or switch the current branch from the maidcategory to labor & construction or any other upon updates.