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HRM’s Balancing Act Between Saudi and Expat Employees: The Seething Challenge


A major challenge of HRM in the private sector is to lure them which seem difficult due to lesser pay, longer working hours and less job security


Saudi Arabia, as we all know, is the largest Arab state in Western Asia. The country has been governed by complete monarchy since inception. The Kingdom is categorised as a high income economy with world’s second largest oil reserves and sixth largest natural gas reserves.

For the Human Resource Management (HRM) in Saudi Arabia, the opportunities are lucrative, namely, government development and investment programmes which have triggered the HRM activities manifold; the presence of the young Saudi population who can be trained to achieve the pinnacle of excellence.

In this article, I would like to discuss the manpower challenge of HRM that is far more serious and deeper today in the country. One has to take into account that the HRM policy framework and existing practices depend on the economical, political, socio-cultural forces and the unique nature of labour market.

In this context, I would like to give a detailed exposition on Saudization, the grave impact on the private sector and other cascading issues like unemployment and the prevailing skill gap of the Saudi nationals.

Saudization is the gradual replacement of the expatriate or foreign workers with competent Saudi workforce. It is indeed fair enough that a country should always focus on its ‘self-sufficiency’ and ‘security’ (Ministry of Labour, 2008). However, Saudization is mainly based upon quota system in which there is a desperate attempt to reduce foreign nationals in private sector. This has serious consequences when the manpower who will replace, lacks the requisite competencies and professional acumen to work in the organisations.

In doing so some of the growing HRM challenges in recruiting and retaining Saudi nationals are cited below:

• The expectations of Saudi employees are high, therefore, they are costly to hire

• Saudis prefer only high designation jobs that reflect status, so to satisfy such ego needs is not always possible

• The corporate sector had time again given feedback (research findings) related to the fact that expatriates are more professional, disciplined and adjustable as compared to Saudis

• There is also the government pressure and local influence on the organisation if it decides to fire the Saudi employee

Despite the Saudi government’s persistent efforts to remove expats from the private sector with Saudi natives, the irony lies in the fact that Saudis still have a fascination for public sector jobs. A major challenge of HRM in the private sector is to lure them which seem difficult due to lesser pay, longer working hours and less job security. In a recent daily (Arab News, January 8, 2014), the Government had openly blamed the recruitment agencies which were given licenses to hire Saudi natives but have failed to do so.

More so, the onus seems to lie on the HR of the private sector to solve the chronic unemployment bottleneck. Even unemployment of Saudis is mainly voluntary in nature as there are large numbers of Saudis who are university graduates looking for government employment, job holders looking for better jobs and even people who for social reasons cannot move elsewhere.

Another grave problem is that there is a huge disconnect between the competency required in the corporate sector and what is available. Here, the shortcomings of the academic system need to be highlighted. The professional work principles and values are sadly missing in their educational system and the restrictive religious tenets are incorporated in different areas of the academics. As a result the Saudi youths are not equipped to develop work-related competencies, or cultural competencies for that matter. In a latest survey (Qudurat research) of Aon Hewitt, the initial findings reveal that “Saudi nationals are reporting a growing disconnect between their job requirements and the preparation they have received for those requirements through their education, compared to foreign workers.”

In addition, Saudi nationals continue to report lower levels of work engagement than expatriates, which could impact their long-term motivation, performance and productivity at the workplace. The report shows similar results for nationals across all seven countries involved in the study.” (“Saudis keen to fill gap between education and job requirements”, The Saudi Gazette, August 8, 2012). Hence there seems to be a subtle realisation which is positive in a sense because Saudi nationals have shown a willingness to solve the problems with renewed understanding. The HR can take the initiative to groom and develop their skills in a constructive manner which I have discussed in the later section.

Emergence of New Era

Inspite of existing challenges, recent initiatives in the field of competency development and talent management by large organisations are indeed commendable. Organisations like Okaz are undergoing rapid restructuring exercises to gain efficiency and productivity. There is a thrust on training and development initiatives in current times by external organisations like American Society for Training & Development (ASTD) and companies like Zamil providing on-the-job training for Saudi youths, Jeddah Chamber of Commerce in the areas of training in management, human resources, industry leadership, etc. Even the HR in private sector can connect with organisations like Technical and Vocational Training Corporation (TVTC) in a proactive manner to hone the skills of Saudis.

There is also a growing receptiveness towards employee diversity now as stated by the Minister of Labour: “The Kingdom is committed to supporting diversity in the local workforce and has been investing in its talents through education, legislation and job opportunities.” (Fakieh supports diversity in workplace “The Saudi Gazette”, December 19, 2013).

The role of HRM is tremendous in this domain and I would recommend that they formulate separate long-term, continuous training and development activities, career counselling sessions, hardcore mentoring programmes (even reverse mentoring) for the Saudi employees where they are given the opportunity to learn what they may have missed out in their educational system to a great extent. The government may have to financially fund these corporate programmes.

The function of the HR Department is fast changing today because companies are transforming for better efficiency and effectiveness. Saudi Arabia has given strategic focus on HR development evident by the country’s national budget which allocated SR 150 billion for education and training.

Finally, from my work experience and an insightful analysis, I would like to comment that making Saudis self-reliant and competent is indeed a visionary thought by the decision makers of the country but instead of treating expatriates like enemies, their cooperation can be sought - to develop and groom the Saudis for productive employment in firms. Here lies the ultimate responsibility of the HR of private sector, to foster and stimulate a sense of collaboration and partnership between Saudi nationals and foreign workers and act as a bridge to Saudi government’s plan implementation. Who knows gradually foreign workers can be phased out in a decent and dignified manner without jeopardising the manpower base, economic and industrial development. Inshallah!



Dr (Prof) Deepanjana Varshney

Dr (Prof) Deepanjana Varshney is Senior Faculty-HRM at Faculty of Economics & Business Administration, King Abdulaziz University, Ministry of Higher Education, Kingdom of Saudi Arabia. She may be reached at








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