Korn Ferry Talent Shift report asks Saudi business leaders: How they are preparing their workforce to remain competitive?

• Potential Cost of In-Demand Employees Could Reach Billions of Dollars
• Reimagining Talent Management Key to Winning Wage Premium Challenge 

Saudi Arabia: 88% of surveyed Saudi business leaders acknowledge that there is an immediate shortage of highly skilled talent, with 70% saying that the talent deficit is either significant or acute, according to The Talent Shift, a new study by Korn Ferry (NSE:KFY) as part of an ongoing Future of Work Research project.

The Talent Shift research report included interviews with more than 1,500 CEOs and CHROs from top companies around the world, including a panel from Saudi Arabia. The focus is on getting direct executive insight into the looming talent challenges and what top companies are doing to prepare for the workforce of the future.

Saudi Arabia is already experiencing the Talent Crunch — with Korn Ferry research estimating a deficit of 107,000 highly skilled professionals at 2020, a figure that could hit 663,000 by 2030.  Leaders are already clear that reduced talent supply may escalate their costs. The research shows that 60% of Saudi leaders fear that talent shortages may force them to increase salaries unsustainably. Yet, only 3% of business leaders have a talent forecast until 2030 and a quarter don’t have a forecast at all.

“With as rapidly as Artificial Intelligence and advanced technology are transforming businesses across economic sectors, executives today face a unique challenge few have dealt with before. They have to plan for a future little is known about and where it is very difficult to predict the exact skills and roles companies will need to fill in the workforce of the future,” said George Karam, Managing Partner Korn Ferry Advisory, Middle East and Africa. “One thing executives agree on is that highly skilled talent needed to optimise the value of the massive investments in advanced technology will be scarce and potentially costly. Where there are vast differences of opinion is how to prepare their companies to best compete for that scarce talent in the future of work.”

60% of Saudi executives surveyed in the Talent Shift research anticipate growing their business by at least 28% by 2020 and by one third by 2030. They anticipate that growth coming with a similar corresponding increase in headcount, with 60% of leaders projecting a 43% increase by 2030. Left unaddressed, talent deficits could present a significant challenge that has the potential to derail these ambitious plans. 46% are fearful this talent deficit will reduce profitability with 52% saying it could limit growth potential in the future.

The promise of technology seems to be the biggest driving force behind a lack of urgency to develop existing talent to fill the talent shortage. Over 70% of Saudi leaders surveyed believe that technology (over people) will become their greatest value generator by 2030.

They also believe it’s easier to plan for technology and tangible assets than it is for people, organisation and culture. Couple that with a lack of experience dealing with talent shortages is even greater among Saudi business leadership than the global average, with 60% of those surveyed saying they have never had to plan for or address a talent deficit.

Despite this, the ambitions of Saudi’s Vision 2030 and the National Transformation Programme, Saudi leaders are optimistic about the development of their existing young nationals. Whilst they project that 28% of current jobs will become obsolete by 2030, they are also confident that 35% of the current workforce is capable of being retrained and redeployed to deliver specific skills needed in the future.

“Under Vision 2030 which has an ambitious transformation and nationalisation agenda, Saudi Arabia has an opportunity to tap into its vast young national population, making the region less reliant on an expat workforce,” Karam said. “There will be less time for people to grow into jobs under the supervision of more experienced professionals, but those young workers represent an untapped workforce, and many of them are women. The Kingdom has already developed various initiatives to help upskill its young nationals but speed is of the essence.”

They plan to fill over 60% of future workforce needs by development and internal promotion. Unfortunately, this confidence is not shared by all, as the second most popular strategy to attract skilled talent, as reported by 64% of respondents, is to pay a salary premium. That is significantly higher than the 49% global average. Saudi Arabia ranks number eight out of 20 economies in individual wage premiums for highly skilled workers, with potential individual salaries rising by $10,700 per worker by 2030, according to Korn Ferry’s Salary Surge. That’s 21 percent higher salary impact per worker than the EMEA average.

With most organisations having no real or comprehensive action plan to fill their talent pipeline for the future, over 90% of Saudi business leaders are certain that they will manage to mitigate the risks of the Talent Crunch.

“Saudi business leaders are optimistic about the future with ambitious growth plans and are investing heavily in the transformation potential new advanced technology presents to them,” Karam added. “The challenge they have to face to is how to align, prepare and develop their workforces to realize the full potential value of those investments without having to pay unsustainable higher salaries.”

-Ends- 

For further information:

Farhanah Raza

Marketing Manager

Korn Ferry Middle East and North Africa

Farhanah.raza@kornferry.com 

About The Talent Shift Study

Following the Korn Ferry Global Talent Crunch study, which modelled the gap between future labour supply and demand to estimate the impending skilled talent shortage, The Talent Shift uncovers the perspectives of global business leaders in 20 major global economies.

Korn Ferry interviewed 1,550 business leaders in multimillion-dollar organizations about their views on talent shortages and strategies. Respondents included CEOs, COOs, heads of strategy, and other senior business decision-makers at C-suite level or C-suite minus one.

They represented the following regions: Americas (Brazil, Mexico, the United States), EMEA (France, Germany, the Netherlands, Russia, Saudi Arabia, South Africa, the United Arab Emirates, the United Kingdom), and Asia Pacific (Australia, China, Hong Kong, India, Indonesia, Malaysia, Singapore, Thailand).

Respondents represented the following sectors: financial and business services (including insurance); technology, media, and communications (TMT); and manufacturing (including industrial, consumer packaged goods, and life sciences). Additionally, we analysed high-growth companies against the average. High-growth businesses are defined as the 20% of businesses achieving the highest level of growth in annual turnover averaged across three years. The top 20% is taken within each of the core sectors in the study and within each market, to ensure that the companies’ growth is compared only to their peers.

Full methodology can be found in The Talent Shift report.

About Korn Ferry

Korn Ferry is a global organisational consulting firm. We help clients synchronize strategy and talent to drive superior performance. We work with organisations to design their structures, roles, and responsibilities. We help them hire the right people to bring their strategy to life. And we advise them on how to reward, develop, and motivate their people.

© Press Release 2018