The Kingdom of Saudi Arabia is undergoing a talent revolution. According to Saudization or 'Nitaqat' implemented by the Ministry of Labour, up to certain levels, Saudi companies are required to hire local population. Announced in 2016 by the Saudi government, the key plan of 'Saudi Vision 2030' is to reduce the number of unemployed Saudi nationals.
The program aims to lower the current unemployment rate from 12% to 7%.
Saudi Arabia, the largest oil-producing nation in the Middle East, relied heavily on expatriates from Pakistan, India, Philippines and Arab countries, such as Lebanon or Egypt. The dependence on expats led to 10% of nationals being unemployed, putting a strain on essential services and infrastructure. Additionally, there was a need to create employment opportunities, aside from the petroleum industry, on which the economy had been heavily reliant. This raised the government’s concern as foreign workers increasingly led to the rising unemployment among the local populace.
The first phase of Saudization went into effect from September 2018, wherein car dealerships and sellers of clothing, furniture and household utensils had employed as much as 70% locals for the sales job. The reform is expected to create 60,000 jobs for the Saudis. The demand is for 700,000 positions by 2020.
Organizations in Saudi Arabia are gearing up to meet this demand. However, there are a few challenges they are faced with, while implementing the Saudization scheme.
- Firstly, there is a dearth of recruitment companies specializing in Saudi talent. So, when hiring for a particular role and going through the Nitaqat process, organizations don't have the requisite knowledge or support. Hence, organizations face problems in setting up a streamlined hiring process and having a precise job analysis to hire the right talent. Also, the mismatch between industry demand and talent supply further complicates the situation.
- Secondly, there is a wide skill gap in terms of job requirements and current skill sets of Saudi Nationals. So, companies need to hone the skills of the local workforce by creating targeted training plans to support their career advancements.
Challenges Before Saudization
Since the government launched the new policy, companies have been at the forefront in implementing changes. However, companies are facing issues in employing, engaging, training and developing the right candidate pool with the required skill set.
Identifying skilled prospects happens to be one of the biggest challenges facing organizations, who are now required to employ local talent to meet the government’s guidelines. From a mismatch between demand and talent supply and unstructured recruitment process to find the right fit, organizations face several problems in identifying top talent.
Mismatch Between Talent Demand & Supply
Recruiting in Saudi Arabia can be challenging, especially for those in the private sector. Graduate profiles of Saudis indicate that there is a mismatch between private sector requirements and the supply of Saudi labor with relevant skills. According to the data from the Ministry of Education, out of a total of 129,000 Saudi tertiary graduates in 2014, 65.3% came from social sciences and humanities background, and 16.8% of graduates came from engineering and science fields - the two fields associated with high-skilled sectors. When it comes to female students, Saudi women universities only offer a narrow band of degree majors deemed gender appropriate by the authorities. This effectively excludes women from careers in engineering and science. Hence, the demand for skilled talent continues to far exceed the supply of its national talent pool.
Unstructured Recruitment Process
Many companies in Saudi don’t have a standard hiring process. Unstructured face-to-face interviews and untargeted interview questions do not turn out to be an effective measure of top talent. This affects the speed of hire and quality of employees and also creates a vacuum between quality candidates and companies that are striving to reach out to them. It further gives rise to a mismatch between organizational requirements and the candidate’s skillsets, leading to poor hires. Since recruitment is unstructured and HRs mainly base their hiring on face-to-face interviews, a lot of relevant candidate information gets lost. There is no empirical data to prove if candidates possess the skills required to be successful in their jobs.
Identifying the Right Fit
As companies have begun hiring local talent, finding the right fit has emerged as a task at hand. Before Saudization came into the picture, the focus was not so much on hiring the local talent. But, with the government push, organizations are now looking to hire high potential Saudi nationals. Even as government initiatives like TAQAT act as a bridge between job seekers and employers to provide and exchange information and applications, the story is far from over. The bigger picture remains to shortlist the right talent as per the organizational need. There is no means of identifying high potentials from the available pile of applications. There are no defined behavioral, cognitive and technical competency frameworks. Organizations lack the understanding of whom and how to assess effectively. Modern techniques of assessment are not being used in talent identification.
With the advent of Saudization, there has been a greater emphasis on upskilling and reskilling Saudi nationals to take up responsible positions. Those at an executive level need to be trained for senior roles, while those already holding senior roles need to be trained for managerial roles, and so on. However, organizations face issues in understanding the training needs of individuals and themselves. From lack of training resources and training the right employees, to the shortage of Saudis at managerial levels, companies face numerous challenges.
Lack of Training Resources & Local Expertise
Due to an extremely high demand for accomplished and qualified Saudi skilled talent, salaries have abruptly soared for blue-chip quality candidates. Even marginally qualified Saudi supervisors and managers have seen a steep rise in their remuneration, owing to high demand. Unfortunately, only a few successful companies have the adequate training resources required to prepare the first-line of Saudi management for the demands of leading an extremely diverse workforce. Also, there is a shortage of experts who have a deep understanding of the local talent and can offer adequate resources to understand, comprehend and implement learning and development programs to benefit the Saudi workforce as well as companies.
Training & Developing the Right Candidate
As organizations continue to hire Saudi nationals, they seem to be lagging in their ability to provide targeted training. Since organizations are making new hires to accommodate policies, they also need to invest in their relevant training and development to keep up with the changing needs. There is a dire need for upskilling the workforce and, therefore, the role of learning and development needs to change to ensure successful upskilling to create future-ready organizations. The need to learn, unlearn and relearn is of paramount importance and targeted training needs to be provided based on individual skill gaps, trainability, and aspirations to make it possible.
Lack of Skilled Local Talent at the Managerial Level
Major investments in infrastructure and economic diversification are creating new job opportunities in Saudi Arabia. Now, more than at any other time in its history, young nationals are under pressure to develop managerial and practical skills to help the country become a knowledge-based economy. Employers often struggle to find nationals for vacancies that demand certain technical skills, managerial experience or professional qualifications. So, it is time for companies to step up and invest in Saudi nationals to identify high potential employees, upskill and prepare them for higher roles and responsibilities. Any business must have a successful leadership team in place which is exceptional at leading people and driving the growth of the business in a sustained manner. The leadership of a company is responsible for creating and maintaining a workforce that embodies the company’s mission and vision in a way that enables the organization to consistently grow in the right direction.
How Are Organizations Gearing Up for This Challenge
As companies continue to struggle to streamline their recruitment processes and set-up their L&D programs, not all hope is lost. HR consultants have come up with solutions that target all the major problems faced by Saudi-based companies. Organizations are gearing up to enhance their recruitment and L&D initiatives. Listed below are some solutions that companies can adopt to solve their problems and adhere to Saudization guidelines.
Overcoming Recruitment Challenges
Hiring decisions cast a long-lasting impact on the company’s productivity, attrition and success rate. However, recruiting candidates for different job roles becomes a roadblock for many, as every job role requires a new set of competencies against which a candidate should be measured. An organization facing problems in recruiting top talent, post Saudization, can commence by defining competency frameworks and further leverage talent assessments to create a stellar team.
Define Competency Frameworks for Each Job Role
Saudi HR departments need to work closely with internal stakeholders to create competency frameworks at both the organizational and the job-role levels. They can seek help from experts who can assist them in charting distinct competency frameworks based on the job role and job level. The purpose of creating competency frameworks is to accurately identify skills that each employee needs to succeed in his/her job roles even as they transform in the future. Competency frameworks describe different competencies with its specific set of behavioral indicators and measurement criteria. Competency frameworks also map the expected behaviors at various levels throughout the organization. Many successful organizations view competencies as a cornerstone for talent management and have categorized the competency framework as an essential step in organizational success. So, competency frameworks for the required behavioral, cognitive and technical competencies can be laid down and can be customized as per the company’s requirements and further vetted by subject matter experts.
A Competency framework for a particular job role consists of three vital aspects, i.e., technical expertise, personality traits, and aptitude.
Corresponding to the competency framework and behavioral indicators, relevant questions can be asked to candidates during interviews.
Leverage Talent Assessments to Hire the Best Talent
The three vital aspects that help in onboarding a quality talent with the perfect balance of required skill set are behavioral assessment, aptitude, and domain expertise. Based on niche competency frameworks, curated by SMEs along with internal stakeholders, assessments are created to evaluate job applicants.
A good way to get a handle on how a potential hire will be the right fit is to have them take a personality or behavioral assessment. The results of these assessments can be immensely helpful in pinpointing candidates best suited for the job, team, and organization. While some may still ponder on what makes a personality assessment an important recruitment tool and whether it is a worthy investment, the truth is that recruiters need to go beyond CV analysis to avoid potentially bad hires and make an efficient candidate screening. Research suggest that assessing a personality is a reliable method of predicting future job performance. Personality assessments are based on the Big 5 Factor Model. The Big Five personality traits have been shown to predict important job-related outcomes, such as job performance, a person’s potential for burnout, his/her trainability and the subsequent job satisfaction. These five factors are:
Meanwhile, aptitude tests help in identifying the innate, learned or acquired ability to perform on-the-job tasks by measuring candidates based on their numerical ability, verbal and abstract reasoning, speed and accuracy. An aptitude test aims to evaluate job candidates while completing certain tasks without any prior knowledge or training. Organizations can use aptitude tests as a way to assess the specific capabilities of potential employees. Aptitude tests are an accurate way of predicting the potential contribution of a candidate and the likelihood of him/her achieving success within the organization. It can sometimes be difficult from an interview alone to assess a candidate’s skills, so an aptitude test provides the employer with a greater insight into his/her capabilities. The test consists of the following major competencies:
- Logical Reasoning: The Ability of an individual to apply reasoning to solve problems and arrive at suitable solutions.
- Numerical Ability and Data Analysis: The Ability of an individual to apply basic mathematical concepts to solve work-related problems. This requires one to work with numbers and analyze data to make decisions.
- Communication Skills (Verbal Ability): The Ability of an individual to reason with words/ written text and comprehend a problem correctly and evaluate the options to arrive at the best possible solution.
- Attention to Detail: The Ability to capture every minute detail and present the work in a clear, complete, precise and easy to understand language.
- Critical Thinking: The Ability to use rational thinking and critically assess situations to identify assumptions, draw inferences and evaluate arguments.
Last but not least, domain tests enable hiring managers to shortlist the top talent by revealing a candidate’s skill set required for the job role at hand. A competency framework for every job role differs as per the job’s KRA and KPI. On the other hand, technical tests aid recruiters in discovering exceptional coders, architects, testers, developers and more, thus making your technical hiring a hassle-free affair.
Overcoming Learning and Development Challenges
Even before you can identify your learning and development strategy or work on your training initiatives, you need to define two important concepts. First, the learning agility which indicates if the person can learn, and at what pace and ability. Second, identifying which skills can he/she learn easily in a shorter duration, i,e. proximity analysis. Having understood who can be trained quickly and which skills can he be trained in, you can then work on launching your training programs.
Measuring Learning Agility: the Ability to Quickly Acquire New Skills
Companies must emphasize skill development among Saudi nationals by strengthening educational and vocational training. Skill-based training is important to raise the employment of the younger generation. Companies need to invest in upskilling young minds to find suitable candidates for any job openings. With the development of the Saudi economy, the labor market has become specialized. The demand for relevant skill sets and niche specializations, both in public and private sectors, is on the surge.
In such a scenario, learning agility becomes a crucial competency to have. The ability to continually and quickly learn, unlearn, and relearn mental models and practices to apply that learning in new and changing contexts to achieve desired results assumes critical importance amid an ongoing talent revolution. Saudi companies need to assess the learning agility of potential hires and existing employees to ensure that they can keep up with the changing job role demands. Job descriptions need to mention that employees must be capable of upskilling themselves and learning on-the-job to take care of future tasks. During job interviews, candidates should be asked to solve problems or accomplish tasks that they have never attempted before to assess their comfort levels in dealing with change.
To identify the Learning Agility demand of every job role, industry and organization, a Learning Agility Matrix can be created. Based on different permutations and combinations of learning ability and learning intent, four categories have been identified- average, enthusiastic, latent and high potential.
A person with a high learning intent and ability possess high learning agility and vice versa.
Proximity Analysis: Identify the New Skill That Is Easiest to Learn
It’s important to identify skills that employees can learn very easily by building upon their current skill sets. These new skills that an individual can learn with ease and in less time, based on their current skill sets, can be identified with the help of the proximity index. For example, an individual proficient in excel can easily learn SPSS and then R, following which they can be proficient in data analytics by further upskilling to learn Python.
Proximity index analysis can be used to:
- Compare skills required for one job family, vis-à-vis skills needed for other job families
- Understand the commonality between skills in different job families
- Develop the Proximity Index Chart for all the job families
To ensure maximum engagement while aligning business goals with the learning and development process, a proximity index analysis becomes necessary. The data will help you understand the best course of training for every employee as it takes into consideration existing domain knowledge while matching it with the skills required in the organization.
Based on the data provided by the proximity index (which tells you about the trainable skills for every employee), you can also determine new job roles for the employee, thus eliminating redundancy and achieving maximum efficiency within the workforce.
Identify Training Needs
How it approaches learning and development defines an organization's capacity for growth. Any company delving into the training and development of its workforce should first learn how to properly identify and assess training needs. Training Needs Identification Assessment, which is a pre-training assessment, helps in creating the right training program for employees. Meanwhile, Training Effectiveness Assessment, a post-training assessment, helps in assessing the effectiveness of the training program in successfully filling skill gaps in each employee to improve their performance.
Designing a Comprehensive Training Program with this TNI Suite
Need for Skill Gap Analysis
A skills gap is the difference between skills that employers want or need and skills their workforce offer. Conducting a skill-gap analysis helps you identify the skills needed by you to meet your business goals. It can also inform your employee development and hiring programs. A successful skills gap analysis will provide a clear path for professional improvement, and increase the chances of promotion for the concerned employees. This helps the organization in an overall increase in productivity, employee retention and boosting bottom-lines. There are several ways to conduct skill-gap analysis depending on the level you are at.
Throughout any hiring process, organizations necessarily aim at gathering as much information on their candidates as possible. The problem is that traditional methods of getting to know candidates — resumes and interviews — often don't yield the best insight. Research indicates that up to 78% of resumes contain misleading statements, while 46% contain actual lies. Similarly, interviews — especially unstructured ones — are subjective and ultimately serve as poor predictors of job performance. In contrast, properly developed and well-validated assessments are a reliable and objective means of gathering job-related information on candidates. Pre-employment tests introduce an element of objectivity into the hiring process by providing concrete results that can be standardized across all applicants. Employers can then use this data to make better informed, more defensible hiring decisions.
Companies also employ the 360-degree feedback tool to identify gaps in behavioral traits of an employee as perceived by other stakeholders. It gives a holistic picture of the candidate through multiple lenses. The 360-degree assessment process helps leaders increase their awareness of their leadership strengths and development opportunities and form the foundation for their leadership development plans. When the results of a function or team are consolidated, it provides invaluable input on the hidden strengths, areas of improvement and blind spots. Since more and more employers are using 360-degree assessment for development and continuous improvement of their workforce, the demand for adopting a 360 assessment tool is on the surge.
"We use it for managers to have insight and visibility into how team members are working collaboratively together - if they see certain areas that need improvement across the team, they can hone in on those areas moving forward."
-Mikaila Turman, Director, GoodHire
Here’s what a 360 Degree Feedback Report Covers
Meanwhile, the real picture gets revealed when employers use assessment and development centres. Organizations can conduct assessment and development centres to get a detailed evaluation of an individual’s role/organizational fitment by assessing him or her on various attributes required to be successful on the job. Assessment centers are generally used for three major purposes: (1) to predict future behavior for an informed decision making, (2) to identify developmental needs, and (3) to develop assesses on behavioral constructs of interest. It can be used to assess prospects or current workforce for various use cases ranging from recruitment and training need identification to high potential identification and succession planning.
Traditionally, assessment centres were conducted offline in the form of a team-building activity. However, with the advent of technology, assessment centres have evolved too and organizations are gradually moving towards newer and more convenient methods of developing their workforce. Traditional assessment centres were conducted completely offline but that incurred a lot of logistical costs and were prone to being biased. Eventually, organizations are adopting a blended approach, a mix of online and offline activities, to understand the developmental needs of their workforce. But, this approach still has the same drawbacks as the traditional one. With the advent of technology, organizations are now moving towards a virtual environment where employees solve problem statements and come across day-to-day work challenges in a simulated environment. All the offline activities are replicated in real-time and scores can be captured in a consolidated report. Employers can save a lot of time and cost using this method. Additionally, individual development and group development plans provide a holistic view of the skill gaps and how can they further be honed.
Measuring the ROI of Your L&D Programs
Having a well-structured and updated L&D program is essential for employers looking to attract, engage, and retain the best people. L&D is the biggest global driver of employee engagement. The way L&D is carried out has changed immensely over the last decade. This change is driven by factors such as the need for higher employee engagement to develop and retain employees, targeted learning based on competencies to achieve higher ROI, and continuous learning to cope up with the changing nature of work and short skill shelf life. Experts in the industry have often stressed the importance of tying training goals to business impact—specifically how training relates to the return on investment and expectations. When developing L&D objectives, organizations should probably think regarding the business and performance outcomes of your training program.
Lower Costs: You can tie training objectives to lower costs regarding employee turnover rates, fewer workplace accidents, and improved efficiencies.
Accelerate Time-to-Profit: Tie competency and performance metrics back to time-to-profit or time-to-market measures.
Operational Efficiency Improvements: Skills development training could be related to business goals relating to operational efficiency.
Improve Customer Satisfaction: Your training can directly affect your customer satisfaction scores.
The Saudi government has accorded high priority to developing skilled Saudi employees and raising productivity, lowering their dependence on foreign expertise, but the concept and practices of talent management are not properly understood and implemented in local corporations. There is an increased need for improved talent management that demands effective talent attraction, development, and retention. However, to witness the impact of making smart decisions, organizations need to take the guesswork out of making future business decisions as it turns out to be extremely valuable for any business, regardless of size or industry.
How Mercer | Mettl Helped World-Class Technology Consultants to Hire Saudi Nationals
Mercer Mettl closely worked with one of the biggest global IT players to cater to the requests of their client National Industrial Development and Logistics Program (NIDLP). Introduced by the Saudi government to achieve its vision 2030, the program aims to transform the Kingdom into a leading industrial power and an international logistics in a way that generates ample employment opportunities for Saudi nationals, boosts trade balance and maximizes local content.
About the Client
Spread across the Middle East and Europe with an employee strength of over 7,200, this technology consulting firm is the harbinger of digitization as it envisions improving business performance by building sustainable IT infrastructures. The organization focuses on agile IT, digital workplace, cybersecurity, business process excellence, and customer experience.
To align itself with the government’s new policy of Saudization, the client wanted to recruit local population in sales and business development roles. They were looking for a partner who could closely understand the job role and its requirements and assist in making better people decisions. The basic requirement was that the content needed to be specific to the Saudi Arabian geography and hence Arabic.
Client Needed to Recruit Across:
Our in-house team of experienced psychometricians met with internal stakeholders and HR to understand the business needs. Based on their requirement to make quality new hires and most importantly the right fit, our team created competency frameworks basis skills and sub-skills and thereby customized personality assessment to relevant personality traits. Also, the assessments were translated into Arabic for the local population.
The job applicants went through a personality assessment that collected responses on the Likert scale that allowed individuals to express how much they agreed or disagreed with a particular statement.
The assessment consisted of 8 competencies and 17 sub-competencies to give a holistic view of job applicants.
The insightful reports revealed information about individual personas and suggestive workplace behavior. The assessment content assisted the HR department in zeroing-in-on the top talent which was suited for the existing job openings across the three job levels.
The Mercer | Mettl Way
Mercer | Mettl assessment platform helps organizations create customized skill-based tests across cognitive, behavioral, personality, and functional skills. It also helps objectively measure, track and analyze prospective candidates and current employees. We leverage psychometric sciences to enable organizations to make data-driven decisions around their people for recruitment, employee development, and talent management. Mercer | Mettl assists organizations through the recruitment and development journey.
Mercer has worked with the General Authority of Zakat and Tax (GAZT) in defining the right competency frameworks for them as a part of their Human capital transformation project. Given its experience of similar kinds of job roles for various other geographies, Mercer has also been working in defining frameworks for Saudi Arabian specific frameworks.
How Can Mercer | Mettl Help in Your Saudization Journey
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Topics: HR Trends