Saudi Arabia's Vision 2030 seeks to employ millions of Saudi nationals in an expanding private sector. Research by Oxford Strategic Consulting (Oxford) found that to accomplish this goal, the private sector will need to employ 2.5m more Saudis than are currently employed in the sector. Developing world-class HR can facilitate this massive human capital influx into the private sector and ensure that nationals are placed in suitable, sustainable roles. Moreover, Oxford research indicates that better HR alone can contribute $6.44bn to GDP.
The challenge: KSA private sector needs to employ 4.1m Saudi nationals by 2030. Saudi currently has a national labour force of around 6.4m people, with 4.2m in the public sector, 1.6m in the private sector and 0.6m unemployed. By 2030 the Kingdom will tout a labour force of around 8m people and aims to employ 3.4m of these Saudis in the public sector, while around 0.57m are expected to be unemployed. This means the private sector needs to employ 4.1m nationals - a rise of 2.5m compared with current levels. Most of the projected 8m workers have not even entered the labour force yet. Consequently, this offers an opportunity for education and training providers.
The strategy: the military industry to play a key role. Vision 2030 states that half of the country's military needs will be manufactured in the country and that Saudi companies will be supported to develop into new global leaders. Saudi currently spends around $56bn on the military industry, but only $1bn is spent in Saudi. Oxford estimates that around 190,000 people are employed to meet Saudi's military needs; however, only 4,000 are Saudis.
Under the vision, the military expenditure within Saudi Arabia will increase to $28.5bn and national employment will rise to 95,000 Saudis. To attract, train and develop 95,000 experts in military manufacturing sounds like a major task. On the other hand, Saudi's entire military manufacturing capability only needs to be as big as a major global companies, such as BAE Systems.
Oxford's recommendation: build world-class HR centres. In addition to developing key industries, Saudi Arabia will need strong HR capabilities to effectively manage human resources. While various Saudi public and private sector organisations are working to build this capability, Oxford recommends the following critical steps:
· HR in Saudi Arabia should be an accredited profession, and anyone working in HR should be accredited by a globally-recognised awarding body.
· There should be a Saudi-specific professional body for HR that is supported by government.
· Simplify and automate certain aspects of HR practice with easy to use apps and other technological assistance.
Investing in better HR can yield billions for Saudi Arabia. Oxford's 'HRM in the GCC' research report with Aramco found that effective HR could add $14bn per year to the GDP of the GCC. In 2013 and 2014, Saudi Arabia contributed 46% and 44% respectively to the GDP of the GCC, according to World Bank statistics and Oxford's in-house research. Therefore, better HR has the potential to generate $6.44bn in GDP for Saudi Arabia.
Increasing private sector employment in Saudi Arabia represents a major challenge of the Vision 2030. More effective HR can ensure that the country meets this human capital goal while also contributing billions of dollars to GDP. It is time that HR takes the driver's seat on the journey to 2030.
Oxford Strategic Consulting is an Oxford and GCC based research consultancy that specialises in building human capital across the GCC and Europe. With teams in Oxford, Qatar, Saudi Arabia, Oman and the UAE, our experienced HR Directors, subject matter experts and researchers combine international best-practice with GCC-specific knowledge to conduct human capital research and implement practical and bespoke people solutions. www.oxfordstrategicconsulting.com
PRESS CONTACT INFORMATION:
For interviews, images, quotes and more information, please contact:
Robert Mogielnicki
Head of PR & Senior Analyst
Oxford Strategic Consulting
Mobile | +971 (0) 565316867
Office | +44 (0) 208 720 6440
Skype | robert.mogielnicki.1
© Press Release 2016
