BUSINESS

Majority of Saudi executives anticipate businesses to rise at least 28% by 2020: Study

November 18, 2018



Pierre Kacha associate client partner and general manager KSA and Danny Leinders senior client partner
Pierre Kacha associate client partner and general manager KSA and Danny Leinders senior client partner
Samar Yahya

Saudi Gazette

RIYADH
— Sixty percent of Saudi executives surveyed in the Talent Shift research conducted by Korn Ferry 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, organization 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 Vision 2030 and the National Transformation Program, Saudi leaders are optimistic about the development of their existing young nationals. While 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.

However, the research also showed that 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.

Korn Ferry held a press conference here last Wednesday to announce the results of a new study as part of an ongoing Future of Work Research project 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.

Pierre Kacha, associate client partner and general manager KSA Korn Ferry and Danny Leinders, senior client partner Korn Ferry, had a detailed presentation to unveil the results of the research.

Saudi Arabia is already experiencing 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.

“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 optimize 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.”

“Under Vision 2030 which has an ambitious transformation and nationalization 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 organizations 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 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.”


November 18, 2018
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