Nowadays, there is an overall trend toward the recognition of the significance of human capital, as these are people, who contribute to company’s success and identify its chances of operational excellence. Nevertheless, employees just like any other type of capital should be managed, organised, and resourced. In order to achieve this strategic objective and adopt effective models and techniques for arranging work, a set of tools referred to as human resource management (HRM) was designed. Even though applying this approach to organising work is a common global trend, there are several significant challenges related to it.
First and foremost, human resource management has numerous specificities, which are commonly determined by the goals of company’s operations and the business environment it conducts operations within as well as the very nature of business. Moreover, in case of firms offering jobs to both national and foreign employees, it is more complicated to select the most appropriate technique of human resource management, especially when teams are highly diversified and different cultures are incorporated within one environment (Jannaty 1). Finally, it is often believed that HR practices are acceptable in case of companies offering services, while in manufacturing they are inappropriate. More than that, there is always a challenge of overall perception of human resource management and employee unwillingness to recognise their criticality.
Bearing in mind what was mentioned above, this essay is an attempt to speculate on the role of human resource departments in the Kingdom of Saudi Arabia (KSA). Focus will be made on investigating the peculiarities of the current business environment, major factors determining the necessity of implementing HR techniques, and the influence of HRM on success of companies. Moreover, it will provide the insight on human resource management practices, which are commonly deployed by companies carrying out business operations in Saudi Arabia.
To begin with, Saudi Arabia is a specific business environment. Most companies are involved in exports of petroleum. Due to being rich in natural resources, Saudi Arabia is one of the most influential countries in the Middle East. However, state’s wealth is one of common causes of high unemployment rate. Local people feel unmotivated to work, develop new skills, and obtain knowledge. At the same time, their salary expectations are extremely high, even though they cannot satisfy the talent demand stimulated by constant innovation of business environment (Torofdar 1). Due to these reasons, KSA is highly dependent upon foreign employees, who can both offer adequate level of skills necessary for coping with job duties and are satisfied by offered employment conditions. Finally, most businesses are labour-intensive. It means that most firms are involved in manufacturing instead of providing services (Torofdar 5).
What is even more critical is the fact that the introduction of HRM practices is a relatively recent development in Saudi Arabia, as the government adopted human resource management laws and regulations at the beginning of the 2000s. Before this initiative was launched, companies were limited in management authority regardless of employees’ background and nationality (AlGassim, Barry, and McPhail 149). This factor is one of the most critical ones affecting the perception of HRM practices in Saudi Arabia and the role HR departments play in a modern organisation.
However, there are still other crucial determinants. For instance, business environment is highly specific as it was mentioned above. In addition, there is a wide range of meso- and micro-organisational factors influencing the role of HRM. It is essential to note that meso-level practices refer to internal environment and operations of an organisation. From this perspective, the perception of HRM is determined by organisational structure and industry standards. In Saudi Arabia, most firms operate in manufacturing. Still, some of them are involved in retail and providing services.
That said, it is vital to note that in retail sector HRM practices have become an inseparable element of managerial practices with the most significant attention paid to hiring, training, and employee development (Qureshi, Ansari, and Sajjad 1205). In case of companies providing services, all functions of human resource departments are of significant importance. It means that they are responsible for recruitment, employee development, motivation and empowerment, evaluating performance and measuring productivity, job planning, and control measures (AlGassim, Barry, and McPhail 148). Finally, there are some multinational enterprises operating in Saudi Arabia. In this case, emphasis is put on the role of HRM departments in recruitment, training, control, and direction of work-related processes (Alanezi 964).
As for micro-organisational factors, they are referred to individual values and perceptions of HR incentives. They can be viewed from the perspectives of both employees and managers. For instance, employees believe that evaluating performance, strict control measures, and gaining expertise. However, it can be easily explained by the influence of culture on understanding work. As for managers, they tend to see HR practices as an efficient tool for benefitting organisations. Nevertheless, in some cases, HRM techniques are believed to be intricate and too complex to work with, especially when they are implemented in the form of software, which is difficult to run or insufficiently localised (Al-Amri, Alessa, and Khalaf 414).
Moreover, the perception of the role of HRM practices is significantly affected by cultural values and norms. For instance, labour-intensive positions are less attractive than top occupations. The same can be said about low remuneration for work (Idris par. 5). At the same time, government of the KSA promoted the policy of the so-called Saudisation – replacement of foreign employees with nationals. In this case, HR practices face a significant challenge because national employees are usually less competent and motivated. Moreover, they tend to change companies frequently driven by the desire to obtain higher remuneration for work. That said, specific attention should be paid to training in order to help employees become more competent by promising positive rewards for achievements. Moreover, it is crucial to focus on increasing loyalty and dedication (HR Leaders Saudi 5).
Finally, it is paramount to investigate human resource management practices, which are commonly chosen by managers of companies operating in the Kingdom of Saudi Arabia. First and foremost, it should be noted that there are several specificities of preferred HR management styles. To begin with, it lacks transparency. It means that procedures are not clearly determined, which can be explained by the relative novelty of the concept and its application to KSA business environment. Moreover, it is aggravated by the fact that KSA culture values family ties and recommendations, which means that skilled and competent employees are not recruited if they were not recommended by influential people. At the same time, preference is always given to oral recommendations and decisions instead of written ones. Furthermore, management practices are centralised. Keeping these specificities in mind, it can be concluded that preference is given to autocratic HR style, i.e. authority is granted to a senior manager and their decisions cannot be questioned (Yurdakul and Ozturkcan 241).
To sum up, nowadays, the role of human resource management departments is underestimated. It can be explained by the relatively recent implementation of legal background for forming HR departments, as their functions were carried out by other departments of companies regardless of sectors and industries of operation. As for now, the major task of these departments is seen in recruitment, evaluating performance, training, and employee development. This perception of HRM is common across all sectors of operation. Still, it is essential to note that the level of introduced practices is satisfying, as they are conducted in accordance with international standards of human resource management with some insignificant modifications necessary in order to incorporate cultural values and norms (AlGassim, Barry, and McPhail 152).
That said, even though there are still some challenges that should be addressed, currently deployed HR techniques are efficient and their strategic role in companies and organisations is critical regardless of undervaluation. The rationale behind making this statement is the contribution of HR departments to enhancing creativity, maximising expertise of employees by arranging trainings and motivating them to foster personal development as well as making employees more competitive (Torofdar 2). Moreover, I am strongly inclined to believe that it is recommended to leave autocratic traditions behind and promote the choice of participatory HR management style. The motivation for coming up with this suggestion is the belief that the desire to operate in accordance with international standards is impossible without selecting globally acceptable HRM techniques.
Al-Amri, Mashhoor, Adlah Alessa, and Alharthey Khalaf. “The Use of Computerised HRM Systems by Companies in Saudi Arabia.” American Journal of Industrial and Business Management 6.1 (2016): 411-417. Scientific Research Publishing. Web.
AlGassim, Ali, Shane Barry, and Ruth McPhail. “Exploring Management and Employees; Perspective of HRM Practices in Saudi Arabia MNC Hotels.” GSTF International Journal of Law and Social Sciences 2.1(2012): 148-154. Global Science and Technology Forum. Web.
HR Leaders Saudi. Human Resource Trends in Saudi Arabia 2015. 2016. Web.
Idris, Abdallah M. Cultural barriers to Improved Organisational Performance in Saudi Arabia. n.d. Web.
Jannaty, Safi. HR Practice in Saudi Arabia. n.d. Web.
Qureshi, Mohammed Owais, Zaid Ahmed Ansari, and Syed Rumaiya Sajjad. “A Study of the Contemporary Issues Of Human Resource Management in the Retail Sector of Saudi Arabia.” Interdisciplinary Journal of Contemporary Research in Business 4.9 (2013): 1205-1216. Journal Archives. Web.
Torofdar, Yusuf Abdul-Jobbar. Human Resource Management (HRM) in Saudi Arabia: A Closer Look at Saudisation. n.d. Web.
Yurdakul, Hakan, and Selcen Ozturkcan. Management Practices in Kingdom of Saudi Arabia: Exploring Perspectives of Saudi Managers and Middle East Expats. 2014. Web.