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November/December 2014

New Insights on Workforce Engagement in Saudi Arabia


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Forget the old cliché of a comfortable, secure job with a corner desk in a government office. Saudi nationals — young and not so young, men and women — are on the move in the country’s hot labor market. And more than ever before, thousands of them are seeking work that means something to them, their families and friends, and the nation’s boom economy.

Today’s market for qualified and motivated Saudi nationals looks more like a fast-moving river than a quiet pond as employers and employees struggle to define what’s needed to attract and retain best-fit employees and what else needs to be done. Employers don’t need to install a revolving door at their entrances — yet — but with the nation’s leadership determined to transform the labor market, employers want the latest trends and data to help shape their value proposition.

With mounting evidence that workplace turnover among Saudi nationals is on the rise, Mercer’s Kingdom of Saudi Arabia (KSA) consulting team conducted a two-pronged What’s WorkingTM study designed to capture employer and employee views on issues of attraction, development, and retention. Responses from 116 HR managers, business owners, and senior executives, along with more than 400 men and women currently in the Saudi workforce, produced some surprising findings.

Primary among these findings was the significant disparity between what employers and Saudi employees consider important when it comes to attraction, development, and retention of Saudi nationals.

LENGTH OF EMPLOYMENT

As employers work to retain key Saudi talent for the long term, employees appear to be working to a far shorter time horizon. Of those surveyed, 1 in 4 Saudi men and 1 in 3 Saudi women indicated that they planned to stay with their current employer no more than one to three years. Furthermore, up to 17% of respondents across all age groups (from 21 to 50+ years of age) said they planned to stay with their current employers less than one year.

VARIABLE PAY

Two-thirds of employers and HR managers surveyed ranked short- and long-term variable pay as having either a moderate or a weak impact as an element of reward alongside annual or off-cycle adjustments to basic pay. That was in stark contrast to the 9 out of 10 of Saudi nationals who saw this component of compensation as either important or somewhat important (see Figure 1).

BENEFITS

Views on benefits varied significantly too, specifically on the value and use of noncash rewards. Forty-one percent of HR managers rated retirement benefits as having a weak impact in the reward mix. Moreover, the majority of HR managers (70%) ranked time-off programs as having either a moderate or a weak impact. In stark contrast, the majority of Saudi employees ranked both retirement benefits (78%) and time-off programs (58%) as important elements to consider in the pay mix.

When asked to rank specific noncash elements, HR’s view about the importance of noncash recognition programs (27%) differed from employees’ view (60%), as it did with work-life programs such as telecommuting and flexible work (40% versus 66%) and workplace facilities and perks such as free drinks and food (32% versus 63%).

CAREER DRIVERS

The market view of the so-called Saudi “dash for cash” appears to be somewhat overrated — or at least in need of a rethink when it comes to what drives Saudi nationals to enter or stay on in a job. Based on the survey findings, competitive pay is at the top, but it’s followed very closely by training and development and competitive benefits. In a clear message to HR departments, women respondents ranked training and development first, followed by competitive benefits, then career opportunities.

Just as telling is the fact that the younger the Saudi national — male or female — the higher the value placed on training and development: 61% of those aged 21–25 rated this benefit as very important, against 6% of those aged 46–50. In contrast, the older the age group, the greater the focus on company stability, job security, and work-life balance.

WORK ENVIRONMENT

And another note to HR: Very few respondents across the kingdom viewed their workplace environment in a favorable way. In every age category bar one, from the youngest (21-year-olds) to the oldest (50+), less than 5% stated that their opinions counted and that they were respected in the organizations where they worked. Only those aged 41–45 felt slightly more confident (9%) that their views counted.

Although the labor law on this benefit is still quite vague, the value that Saudi nationals place on flexible working arrangements (that is, part-time work, shared jobs, working from home, etc.) is not. This benefit is of considerable interest to those newest to the workforce (close to a quarter of 26- to 30-year-olds rated it highly), but that drops to 8% for 46- to 50-year-olds and then shoots back up to 33% for those 50 and over. This is a clear message, nonetheless, to those charged with creating work environment to suit Saudis across every stage of their productive working lives.

WHERE TO NOW?

The survey has confirmed — and in some cases, uncovered — disparities between what motivates Saudi nationals to choose to stay in or to leave a job, and what employers consider important to achieve the same objective. As talent continues to flow in and out of organizations — and embedding Saudis into their nation’s workforce remains a government imperative — the dialogue between workers and bosses on these topics must continue.

Now more than ever, Saudi nationals with the skills, opportunities, and motivation have a feast of choices about where to work. For employers, there is still some work to do. Those with the most enticing value proposition will be best-positioned for success. One thing is certain: A one-size-fits-all value proposition is no longer going to work in a dynamic job environment, and those that ignore the signals will end up paying the price.

 

Download Mercer’s full report on workforce engagement in Saudi Arabia.

 

CONTACTS

Tom O’Byrne (Riyadh)
Principal, Mercer KSA CEO
+966 11 434 7576
E-mail
Najla Najm (Riyadh)
Senior Associate, Talent
+966 11 434 7578
E-mail

Download PDF: New Insights on Workforce Engagement in Saudi Arabia

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