How is HR as a function perceived in the region?
Andy Williams, senior director – HR, Visa [AW]: HR is still coming up the curve from the days of being known as ‘personnel’. Given the legislative landscape in the Middle East, in many organisations there is still a fear factor involved in dealing with HR, especially in locations outside the UAE.
Overall quality of HR talent is improving in the region as Dubai’s resurgence continues and people are choosing to stay longer, bringing stability to the marketplace.
Nawaf A Dhubaib, HR director, KSA and Levant, Philips [NAD]: In one of the HR forums held in Riyadh in November, the Saudi deputy of the Ministry of Labour asked if there was a clear understanding of HR in the Saudi Market and whether there were nationals qualified to undertake the function.
HR professionals and business leaders generally misunderstand the HR role, believing it is a reactive function to the needs of the business rather than a strategic partner that adds value to it. This might be because the HR function is a relatively recent discipline in the region.
Zakaa Farhat, HR director, Johnson and Johnson [ZF]: Over the past five years we have seen a change in perceptions triggered mainly by the economic crisis. Companies have recognised growth opportunities in Middle East markets, which has pushed HR – as a key internal stakeholder – to differentiate itself.
Yaser A Alsaeed, corporate HR director, Zamil Industrial [YAA]: HR is seen as a developmental function in the Middle East, where most companies are formulating, adopting and implementing new HR strategies and practices.
Abdullah Yala Hashem, HR director, Virgin Mobile Saudi Arabia [AYH]: Nowadays, HR is tagged as a key strategic partner in the management of businesses, affecting organisational competitiveness and ?nancial performance. Personally, I notice that change in how we perceive HR as a business enabler and partner in success.
Ibrahim A Aloraini, president, Saudi Human Capital Club [IAA]: HR in the Middle East is not yet mature, since most GCC markets are not fully regulated. The function is unsophisticated in terms of practices, disclosure and the availability of specialists.
Kevin Martyr, HR director, Saudi Tadawi Healthcare Group [KM]: HR is still seen primarily as an admin function rather than a true business partner that can have a positive impact on the business. In many organisations, this is beginning to change, but as an HR professional you need to build your own credibility within the organisation and demonstrate the positive impact HR practices have on the bottom line. You must develop these practices so that they shape and support the strategic direction of the business.
Reyana Menzel, head of HR and learning, KPMG Lower Gulf [RM]: HR in most organizations has a long way to go in transforming itself from a transaction-focused function. The way it is perceived is enforced by the business and its requirements, but progressive firms are moving towards hiring strategic HR partners.
What are the main challenges you face as an HRD?
AW: It’s difficult to convince senior talent to relocate to the region, particularly to Dubai where the schooling situation and increasing house rental prices are dampening enthusiasm. Ongoing unrest in some areas also presents challenges, but we have increased the use of flexible working practices and operate a liberal leave policy when required.
NAD: It’s hard to gain trust as a strategic player in the organisation. Presenting HR projects in terms of ROI is proving difficult, as there is a lack of well established ‘formulas’ linking HR’s performance to its financial impact on the business in a forward manner versus an ‘autopsy approach’. Another challenge is elevating the HR team from labour intensive operational tasks to tactical and strategic value-added ones by leveraging IT solutions.
ZF: International companies have started to re-align their internal resources to create leverage. Many are implementing shared services and center of excellence concepts. This drives a one-size-fits-all approach which might not work in our region as it does in Europe. On the one hand, the matrix organization is adding an additional challenge which doubles the effort of the HR business partner in driving core HR practices.
YAA: Keeping up to date with changing regulations and political dynamics, measuring employees’ work performances, managing talent and boosting employee retention. We need to focus on strategic career planning and create work-life balance, gauging this and job satisfaction by carrying out regular staff surveys.
AYH: The most challenging aspect is finding and keeping talented people, especially in the current economic climate. In HR, we need to set clear people strategies within our organisations and communicate these to everyone.
IAA: The Gulf countries must urgently certify and license local HR practitioners and equip them with the best global practices.
KM: Over the past year, we’ve had to create an HR team that would provide the right support to the business. We built a set of HR policies and procedures and ensured these were implemented and measured correctly by coaching the team in best practices. Another challenge was boosting the number of Saudi nationals working with us, which we have done by bringing in a new recruitment process and providing development opportunities. We have also been working on making sure we offer the correct level of compensation and benefits by engaging the services of an HR consultancy to build a new grading structure that links pay scales to market rates.
RM: Changing and maintaining the business perception of HR, providing HR education that is relevant to the workplace and building initiatives to continue being an employer of choice.
Difference in GCC countries
How do HR challenges differ across the GCC countries?
AW: They vary significantly. For example, Qatar remains a challenging location for attracting talent because of the restrictions on work permit transferability between employers, high prices for schooling and housing and the construction work ahead of the World Cup in 2022.
NAD: The Saudi market, with its growth potentials and minimal taxation regulations, is very attractive to businesses. However, typical SWOT market analysis tends to overlook additional indirect operation costs such as those associated with attracting, retaining and developing national employees. As typical workforce operating cost models often underestimate true costs, especially with MoL nationalisation requirements, most organizations revert to short-term solutions. For example, they might focus on buying in talent instead of building it in-house, which results in an unsustainable vicious cycle of talent poaching and higher payroll costs.
ZF: The EVP is different in each country – what attracts someone to the UAE is not the same as what draws someone to Saudi Arabia, which is a bigger market. The diversity challenge also varies by country, as can getting visas for new hires.
YAA: There are differences in cultural adaptation, government regulations, political and social issues. Each GCC country has its own economic, social and labor requirements, so specific HR strategies and measures must be tailored to fit.
AYH: The Saudi Arabian labor market is very dynamic and changes very fast, making it different in terms of localization and the development of young talent.
IAA: The term ‘Saudization’ is perceived negatively by the expat population because it suggests terminating the employment of a non-national and replacing them with a local. Also, Saudi Arabia has one of the youngest populations in the world. Our organisation is playing a vital role here in removing the trade-off between Saudization and operational drop. Knowledge transfer is very important and takes time – localization should be a handshake between the local national and expat SME.
RM: The main difference is within labour laws and visa processing – bearing in mind culture differences and political stability.
How do you make your organisation an attractive place to work?
AW: Visa is in the Forbes Top 35 Most Valuable Brands, but we work hard to ensure that our employment policies and benefits are ‘best in class’. We undertake an annual employee engagement survey, hold focus groups to address the outcomes and regularly review our benefits offerings to keep up with changes in the market. We are committed to attracting high quality UAE graduates into our business and we’re expanding our intern program this year to attract more talent from local universities. We want to create a pipeline of locally educated talent to fuel the growth in our business regionally.
NAD: We focus on maintaining an attractive pay scale, especially accounting for changes in the cost of living and making it separate from the performance pay increase. We invest in employer branding, offering flexible working hours and attracting nationals by providing development programs that expose talented employees to different markets and geographies.
ZF: The EVP for Johnson & Johnson is based on our culture and credo. The new generation of talent is mostly attracted to our company for the learning experience and growth opportunities. We take succession planning very seriously and our diversity strategy is fundamental to the attraction of diverse talent.
YAA: We emphasize our HR initiatives, which include a Saudi graduate development program and management career development scheme. We comply with all new government regulations, specifically within the nationalization program.
AYH: Our Saudi Arabia competency framework forms the backbone of our HR management strategy. Its consistent use in multiple HR programs, policies and procedures constitutes a significant step towards the development of a performance and growth-oriented organizational culture.
IAA: We are urging local HR functions to drive strategic initiatives such as employer branding and succession planning, and convert the nationalization approach into a friendly objective. More importantly, EVP can be formalized to improve the alignment between HR processes and overall business aims. Once this is in place, employees will be empowered to take charge of their own development.
KM: Over the past 12 months, we have created a set of company values and recognise those that ‘live’ these values on a regular basis. We have also created a program that focuses on different populations of employees and provides basic job skills training, professional development of our pharmacists, management development and executive coaching for senior management. Due to the geographical spread of our business, the courses are delivered using a mixture of online and classroom-based learning. Nationalization is another priority and we have recruited Saudis into many positions, supporting them with professional development and English language courses. In terms of employee engagement, we have boosted motivation and morale by launching a company newsletter, holding regular briefing sessions, running our first opinion survey and implementing listening forums hosted by executive management.
RM: We run a national competition called Ace the Case in which graduate employees work on real KPMG cases, helping us to identify a top talent pool. Winners go forward into an international contest. Our nationalization program includes short-term secondments, student internships and graduate schemes, and to build talent we run a future partner program in which directors are assessed and mentored to develop their financial and community capital. We have also designed a program in which people management leaders are appointed to provide coaching, leadership and counselling to staff as well as influencing decisions on policy changes and improvements across the company.
What success have you had with these programs?
AW: Measuring the impact of HR is always challenging. We focus on the low employee attrition rates across MENA and year-on-year improvements in our engagement survey scores.
NAD: It is ineffective and counter-intuitive to attempt to attract and retain talent by setting salaries higher than market pay. Negotiating pay packages with employees who have been offered better pay by competitors is a short-term remedy only that will do employees and line managers more harm than good.
ZF: At just 5%, our staff turnover is low. Almost 90% of our managers and leaders have been promoted from within, a third of our senior board members are female and we have employees from 28 nationalities across the region. The EVP has been changing for the new generation, with more people seeking work in a dynamic and challenging culture that drives creativity and innovation.
YAA: With our nationalization program, we are focusing on creating jobs for nationals rather than discontinuing expat employees. Female employment is another aspect. The rate of filling a key vacancy through succession planning is 40%, while employee satisfaction is 60% and employee wellbeing is addressed through workplace safety programs, family health care packages, stress management training and employee recognition and recreation activities.
AYH: Our success rates have been better than we expected. We challenge convention, conformity and uniformity. We understand the rules, yet challenge ourselves to be bold, try new things and have fun while we are doing it. The programs will be reviewed and updated every year so that we can continue to improve our people strategy as the market and economy changes.
KM: Building an online learning platform, with development programs designed for different employee groups, is making a positive impact on the business and feedback has been extremely positive. By focusing on the development of Saudi nationals, we have been able to reduce the turnover within this population. Accurate and timely communication has also given employees an understanding of business issues and how they can contribute to the overall business strategy.
RM: Our graduate recruitment initiatives develop a talent pool of more than 200 applicants each year, of which 32 are top performers from reputable universities in the UAE. Function leaders are taking ownership of people management issues, moving away from the core responsibility that lies with HR and adopting a culture to partner with business units.
How do you see HR changing in the region?
AW: More companies, particularly local entities where the concept is relatively new, are beginning to recognise the value of a strong HR business partnering function. I see a shift towards a model in which business partners are supported by an HR ops function and are more strategically focused.
NAD: HR will play a very important role, especially now that governments are taking the unemployment issue more seriously and taking action to help reduce its social impact. New regulations are forcing the private sector to take more responsibility in resolving the unemployment problem and HR professionals will be instrumental in any solution.
ZF: HR practitioners will focus even more on business profitability and move away from driving HR processes. Within three years, most companies will completely separate HR business partnership from HR operations.
YAA: It will take on a progressive function. Complex challenges and measures will develop in view of continuing labor market competition, complicated job requirements, currency ratios and stringent government regulations.
AYH: We will focus more on talent management, retention and the localization and development of the human capital in the region.
IAA: The political landscape is changing rapidly with new government initiatives, namely, increasing the employment of women and disabled people. If businesses want to grow they need to invest more in their people.
KM: The biggest challenges will be nationalization and employee engagement. In response to rising unemployment rates among nationals and ongoing dependence on the expat workforce, HR must influence and change policies to ensure they meet regulatory requirements. It must also place more emphasis on engaging employees by increasing communication, providing development opportunities, rewarding good performance and creating a great environment in which to work.
RM: HR will take on an advisory role to the board to support change initiatives and manage people’s responses. This is already happening in a few organisations, but needs to happen across more industry sectors. There will also be a more humane approach in people strategy and greater investment in training and development. Work governance rules and reward schemes will become more expat-friendly and working mothers will be better supported. HR will also contribute to national leadership pipelines by focusing on long-term investment in work placements for those in education.
What’s your advice to other HR directors and leaders to help them become strategic players in their organisation?
AW: Understand all aspects of the business from the bottom up. Recognise the significant differences within the region; don’t assume all locations in the Middle East have the same challenges and requirements. Don’t be afraid to innovate and lead the HR agenda.
NAD: Demonstrate HR’s financial impact on the organization and, in discussions, focus more on future profit and forward thinking.
ZF: The most important thing is to understand the business and be close to the external customers. Any HR strategy should positively impact the bottom line and this cannot be done if it is disconnected from customers’ needs. Stay connected to key stakeholders and business leaders, address their challenges and listen to what motivates them.
YAA: Build a pro-active HR team, align your team’s goals with those of the organisation and influence executives and top management to adopt best practice.
AYH: You need to understand your business very well to support and advise your organization in HR strategy and play a part of its success.
IAA: The EVP must be dynamic and shift with global changes and generations. At the same time, localization is a national responsibility shared by all local businesses, yet success comes from matching the right people with the right job.
KM: HR leaders must fully understand the business strategy and be able to articulate the strengths and weakness of the organisation. You can then begin to develop HR strategies to meet business needs and map out the initiatives that will support the overall strategy. You must continue to keep sight of external opportunities and threats as they arise, and be prepared to change your strategy accordingly.
RM: Don’t be afraid to build a team of different and unconventional HR talent – a strong team with varied strengths will support your transformation of the function. Remember to invest in yourself, too – study, get relevant qualifications and transfer your learning to the workforce.
Ibrahim A Aloraini
president, Saudi Human Capital Club
Ibrahim was previously HR director for Express Mail Service, the largest postal network in KSA.
Nawaf A Dhubaib
HR director – KSA and Levant, Philips
Nawaf looks after the organisation’s whole HR function across KSA and Levant.
Yaser A Alsaeed
corporate HR director, Zamil Industrial
Leads a team of HR professionals in developing and implementing HR programs and initiatives at strategic level.
Abdullah Yala Hashem
HR director, Virgin Mobile Saudi Arabia
Abdullah has 15 years’ experience in HR in multinational companies.
senior director, HR – MENA, Russia, CIS & SEE, Visa Middle East
Andy is responsible for HR business partnering across 12 offices (eight of which are in the MENA region).
HR director, Johnson & Johnson
Zakaa manages 12 HR team members. The organisation employs 1,500 across the Middle East, Africa, Turkey and Pakistan.