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Saudi Arabia, a global economic powerhouse with ambitious plans for Vision 2030, is grappling with a pressing issue: a talent crisis. With the Public Investment Fund (PIF) creating new companies at a remarkable pace, the demand for skilled professionals has soared.
Yasir Al-Rumayyan, the governor of PIF, proudly disclosed the creation of 400,000 jobs in the last five years, with plans to generate another 1.8 million jobs in the next five years. The nation's race for talent is on, but the question lingers – where are these resources coming from, and who foots the bill to fill these positions?
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Salary Wars: A Double-Edged Sword
As a result of Saudization, recruitment activity is at an all-time high in Saudi Arabia, with companies clamoring for Saudi professionals. The consequence? A dramatic salary surge, as fresh graduates in the private sector have seen their incomes grow by a staggering 30% in just a year. Some are even being offered packages that are 60% higher than their current salaries. Employers are being pushed to their limits to retain their workforce, yet they struggle to keep pace.
The salary wars may seem advantageous to employees reaping the benefits of inflation, but on the flip side, businesses find it increasingly challenging to both attract and retain talent. It's a conundrum, and the stakes are high.
Skilled Worker Shortage and Unrealized Revenue
A 2018 study by Korn Ferry painted a sobering picture: Saudi Arabia is expected to face a skilled worker shortage of a whopping 663,000 by 2030. The price of this shortage is exorbitant, with unrealized revenue projected to reach a staggering US$206.77 billion by 2030.
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Solving the Talent Crisis in Saudi Arabia
To tackle the talent crisis head-on, several measures need to be considered including:
1. Government-Led Upskilling Initiatives
Governments should lead the charge in upskilling their citizens through investments in education, the expansion of early education programs, and the establishment of specialized bodies for skills and leadership development. Tax incentives for companies that train employees in crucial areas can further incentivize upskilling efforts. Additionally, individuals looking to enhance their career prospects should be made aware of platforms where they can choose to work on real-life, industry-specific projects to stand out to recruiters during the hiring process.
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2. Helping Organizations Adapt and Learn
Organizations have a pivotal role in retraining and redeploying their existing workforce, especially in digital skills. Fostering essential behavioral competencies like ambiguity management, strategic thinking, and innovation orientation is key. Encouraging learning and development through various methods, including e-learning and coaching, enhances agility in adapting to evolving business demands.
3. Collaboration between Education and Industry
To bridge the gap between educational curricula and industry requirements, organizations should actively partner with local educational institutions. Initiatives such as software labs and close collaborations equip students with the skills they need to thrive in the workforce.
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4. Proactive Talent Planning and Scenario Building
Leaders must engage in proactive talent planning to ensure they have the right skills for the future. Quantifying the consequences of the talent crisis, such as unrealized revenues and wage premiums, guides decision-making. Talent models and scenarios must be used to prepare for the future workforce.
5. Effective Employer Branding and People-Centric Culture
To attract and retain top talent, organizations must invest in a strong employer brand and cultivate a people-centric culture. It's not just about saying talent is valued; it's about genuinely committing to talent development.
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6. Labor Rules and Immigration Policies
Governments and organizations need to operate within a pro-business labor environment. Policies that make it easier to enter and exit jobs, coupled with openness to immigration, can attract skilled professionals. As seen in the UAE, new visa entry systems can be implemented to draw in talent.
7. Exploring External Talent Markets
In the interim, Saudi Arabia can explore external talent markets to bridge the skills gap while the younger generation gains experience and comes up the ranks. This can provide a temporary solution to the immediate talent crunch.
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In conclusion, while the talent crisis in Saudi Arabia is undeniably daunting, it also presents an opportunity for transformation. By investing in leadership development, upskilling, and innovative approaches to talent acquisition, Saudi Arabia can navigate this challenging terrain and build a brighter future for the Kingdom.
Qureos, through its innovative solutions, stands as an example of how technology can play a pivotal role in reshaping career development for individuals and facilitating efficient recruitment for businesses, contributing to the overall solution to the talent crisis.
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