The Future of Work in Saudi Arabia: A Guide to Attracting and Retaining Top Saudi Talent
Saudi Arabia, like many nations in the Arabian Peninsula, has been historically dependent on oil for its economic stability. However, with substantial revenues from fossil fuels, it is heavily investing in diversifying its economy.
Pharmaceuticals, one of the strategic sectors in Saudi Arabia's diversification strategy, has reaped benefits and experienced rapid growth. The Saudi pharmaceutical market is now valued at over $10 billion.
However, to increase the employment rate of Saudi nationals in a country where a third of the population are expats, the government has made it clear to pharmaceutical companies that they must hire more Saudis.
Saudization in the life sciences sector
Since then, Saudi Arabia has been successfully driving Saudization in the medical and pharmaceutical industries. Locals have been given a preference for roles like medical representatives in order to fulfil this goal. The pool of talent has increased since the beginning of the pandemic, but companies have to think outside the box when recruiting. In Saudi Arabia, people are moving from pharma to medical devices or from healthcare to pharma, and vice-versa. Adaptability and flexibility are critical in markets now, especially for soft skills.
The appointment of increased senior Saudi hire’s are becoming common place including a female Medical Director at Eli Lilly pharma, which indicated a significant milestone for Saudi Arabia’s business community.
The challenges of Saudization
Hiring managers in Saudi Arabia face several challenges when it comes to Saudization. While there are jobs in Saudi Arabia, many Saudis are accustomed to government-provided jobs and about 66% of Saudis work in the government. As Saudi Arabia moves away from a reliance on oil revenue, citizens are being encouraged to compete more proactively for jobs in the private sector.
A vicious cycle can be created: the longer Saudi nationals stay out of the job market, the harder it will be for them to compete in an open jobs market.
Identifying qualified Applicants. Saudi job seekers can lack the necessary skills and experience needed to fill positions with Saudization requirements. Some employers have found that investment in additional training is required, rather than hiring an already experienced candidate. This can be costly and time-consuming, particularly if there are multiple positions that need to be filled quickly.
Lastly, insufficient hiring channels. The traditional recruitment channels (Job boards, LinkedIn Ads) have become ineffective, due to the specific requirements that Saudization poses. Moreover, these traditional channels lack transparency, process and cannot be replicated as a defined efficient process.
The resource pool is not just about hiring and training but also about attracting and retaining the right talent.
Attracting and retaining talent is a key factor in any business and the success of Saudi Arabia's Vision 2030 initiative.
To achieve sustainable results, Saudi Arabia will need to address the potential gap in human capital capabilities. This can be achieved by attracting and retaining top talent and effectively developing and upskilling the local labour force.
How to attract talent in Saudi Arabia
Most of the experienced and qualified Saudi Nationals are not actively looking for jobs. You will need to conduct a headhunting search when recruiting for senior-level and C Suite candidates.
You will likely need to branch out from traditional job-search methods and network with people in your industry.
Good candidates often refer good candidates. You can ask your Saudi National network for advice on whom you should be connecting with or ask them who they think would be a good fit for your vacancy.
Family plays a significant role in determining the career choices of Saudi Nationals. Employers that enjoy wide public appeal gain a further advantage by winning the endorsement of candidates' families. Providing expanded family benefits is also very well received by applicants.
Communication is crucial
Whether hiring a Saudi or an Expat, be sure to keep your candidates informed of the process and ask them open-ended questions about other opportunities they are considering. Candidates often mention that recruiting processes are inefficient, take too long and are extremely impersonal. Any feedback is better than no feedback.
Be flexible in areas where skilled workers are in short supply.
When recruiting for certain areas of your business, you should keep an open mind regarding Saudi National candidates, as they are in short supply.
Thoroughly assess your applicant's profile. Along with traditional interview questions around skills, take the time to get to know your applicant. Ask about family ties and other commitments that may affect the job. Saudi culture values family relationships a great deal; understanding these ties is important in understanding the person you are hiring.
Take the time to explore the applicant’s true intentions and motives for wanting to leave their current role.
Be mindful that a lengthy interview process can cause your applicant to lose interest in the role. If the candidate has time constraints, make sure you ask about them.
Certain aspects of the hiring process in Saudi Arabia differ from region to region, so it is important to understand these differences and take them into consideration when setting up a hiring process for your company.
- Notice periods can last for up to three months in Saudi Arabia, so it is advisable to be swift and prompt with all recruitment decisions, tasks, and processes.
- The company must take into account all possible scenarios related to its taxes and the Nitaqat System in order to accumulate realistic timelines and avoid hurried or wrong decisions at the last minute.
- Establish whether expectations are Gross or Net after Gosi.
How to retain talent in Saudi Arabia
Apart from traditional methods of retaining talents, such as offering flexible arrangements, a sense of belonging and training opportunities, it's important to consider how you can make your company a place where people want to stay.
Managing a candidate’s expectations, with relation to future salary increases and promotions of position are critical. One of the most common reasons we have experienced from candidates looking for new roles is yearly reviews not being what was expected.
Therefore to retain employees, managers should provide benefits other than compensation, like promotional opportunities, bonuses and incentives, and non-monetary benefits, based on their performance.
If the company wants to retain or keep employees for long periods, it should create a reward system that allows them to attain both their personal objectives and organisational goals.
In fact, Deloitte found that leadership support and recognition are among the top three most effective nonfinancial factors for retention. In today's "anywhere workforce," an employer's gratitude can help to motivate employees to go the extra mile and explain how their hard work helps the organisation. Some companies set up formal rewards systems to incentivise great ideas and innovation, but you can institute compelling recognition programs even if you have a small team or limited budget.
Give feedback on employee performance on a regular basis
Effective performance appraisal systems provide timely feedback on employees' performance, which can help employees to know about the importance of their performance and their existence in the organisation. Receiving performance feedback on time also indicates that managers pay attention to the work done by the employees and provide assistance on how they can improve their performance, which in turn helps them engage with their work and stay with the organisation.
A comprehensive hiring process. It is a great way to retain employees. Start by ensuring that you are hiring the right people. It’s best not to subject candidates to a long and drawn-out process as it may send them elsewhere. More so, going through interviewing in a way that helps you best understand the candidate and if they possess the right skills for the role or will be able to develop them on the job.
Goals of Saudization and why they matter
This program is important because it addresses important issues like unemployment, economic growth, and gender equality. By increasing the number of Saudis working in different industries, it can help improve the country’s economy and create new jobs for the people. This will also help them reduce reliance on foreign labour and strengthen Saudi’s economy by providing more opportunities for local companies.
The goals of Saudization are important because they help address some major issues facing the country today. According to the Publication results, the Saudi unemployment rate decreased to 9.7% in the second quarter of 2022, compared to 10.1% in the first quarter of 2022. Encouraging more young people into the workforce can reduce these numbers, which will have a positive impact on the economy and society at large.
The Saudi Vision 2030 plan will not be realised without the right talent in place, which means companies will need to work with their HR teams and recruiters to find candidates that meet their hiring requirements. Saudization is an important component of this process, but it should not be viewed as a side project or something that can be implemented overnight.