Sectors in Saudi Arabia v2.0
Back in 2013 I wrote about the different sectors in Saudi Arabia, the landscape has significantly changed with the push of SaudiVision2030, therefore I decided to take a snapshot of the job market sectors just before the COVID-19 pandemic, and review the results.
Saudi Arabia remains the number one country in oil exports, but with the SaudiVision2030 and the transformation the country is going through comes new and different business opportunities, I have interacted with all the different sectors in one way or another that allowed me to look at the bigger picture of the sectors and differences between them.
Saudi Arabia is -like most countries- mainly two sectors:
- Government Sector:
The government sector in Saudi Arabia has been -and still is- criticized by many groups of people, bureaucracy is soaring, job security is at its highest, performance is low, and working hours makes it a dream job for a highly social nation. But to people whom are looking to succeed and make something out of themselves, it is a graveyard. Most of the employees are civil service employees and fall under a different law than the Saudi Labor Law, they were governed by the Civil Service Law and procedures (They are going through a transformation through the King Salman’s Human Resources Program under SaudiVision2030).
In order to facilitate the huge transformation the government embarked on, they needed the highest caliber of employees, but they faced an issue of attracting them, to the abovementioned culture and very low benefits (comparing to the private sector), one way was to sub-contract the employees through a private company and be competitive in the market. That way allowed a large number of the private sector talent to shift the interest and serve in the transformation (it is worth mentioning that not all the talent was top talent,,, just like everywhere, some are talented and some are not). That created a very collaborative and sometimes competitive environment. That did help in decreasing some of the bureaucracy and centralization (although still high)
- Private Sector:
Now the private sector is divided into four main categories:
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- Government Funded:
Some examples of those companies include:
These companies remain the “big boys”, they have massive funding -compared to the others- and they sure act like it.
Government-funded private sector companies are the envy of the rest of the private sector, they got a lot of money to work with, compensation and benefits are almost always competitive, training is handed out like free candy most of the time. on face value, it is a relaxing atmosphere for HR professionals to work for, but in reality, the fact of the matter is, the amount of bureaucracy in there sometimes makes you look closely to confirm if it is indeed a private sector and not a government sector in disguise.
A small observation, usually people employed under this sector have a narcissism complex, it would be best if they humbled themselves.
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- Fully Private (Publicly listed):
Some examples of those companies include:
These companies are usually found in the stock market, but what differs them from the government-funded is,,, well the funding, these companies strive to compete against the “big boys” but what they can’t understand is that the “big boys” have really BIG pockets, only once they realize that they are in a different league they will start to function better.
Companies in this group usually strive to compete with the “big boys” but due to the limited funding they can’t, but in their defense, they do offer competitive compensation and benefits -not compared to the government-funded- and when it comes to training they don’t usually shower their employees with training, but they give them very specific training to their jobs which sometimes can be more beneficiary for the employee. On the surface, it seems like a healthy challenge for HR Professionals but in reality, the issue here is usually management, management is often “stolen” from the government-funded sector, and the stolen ones are not always the best. It is due to the fact that the government-funded sector can’t accommodate everyone, so the fully private companies take that opportunity and snatch some of those employees. Knowing this you can expect a similar taste of bureaucracy. Another major issue is centralization, I don’t know exactly the root cause of this issue, but I know it is a big thing in these companies, usually work needs to be signed off by so many people that it takes more time to finish the paperwork than it is to do the actual job.
A small observation, the employees in this sector -like their companies- suffer from an identity crisis, the messages they receive from their companies are mixed between “WE ARE XYZ COMPANY” & “we are only xyz company”.
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- Family Owned / Unlisted:
Some examples of those companies include:
This branch has it the toughest, they are surrounded by monsters, and they try, even though it is very tough to succeed in a market that is demanding more and more to spend money on things like employee engagement, training, development, …etc. At the end of the day, they are doing what they do to make a profit.
These companies usually suffer to find national employees, and even if they found them, the good ones usually get snatched by someone from the above categories.
Compensation, benefits, training, and development are very low -compared to the above-. HR professionals in these companies suffer between finding the candidates and holding on to them until the inevitable happens and the HR employee either moves on to one of the above or loses interest in being productive.
It is a different story in companies like these, if you know the family on a personal or professional level, you get the perks, but if you don’t it is usual that you stay there for a VERY LONG time with no movement of any kind. I think that social responsibility is misunderstood in this sector, it is not some billboards and advertisement campaigns showing that the company cares about health, safety or environment, it is a full involvement from the company. and only once they realize and work in this direction they can be called socially responsible. Next article, I will get into social responsibility in more detail in future articles.
A small observation here, this sector has a SLAVERY mentality.
- International:
Some examples of those companies include:
although they share the same building blocks of fully private companies, they are VERY different. advancements are tied by achievements and hard work. opportunity is available to whoever wants it, let’s get things straight, some companies have their negative points, some companies neglect the local talent due to outdated mentality that Saudi’s are undependable which as I wrote before NOT correct, bureaucracy is there somewhat lower but still there, and the training -due to the size of the company- is from within which has it’s negative points in my opinion, but all in all, at least if you work yourself you will succeed. Also, compensation and benefits are different, for some reason they usually don’t understand how other companies -mainly government-funded- can spend this vast amount, I guess they sometimes forget that Saudi Arabia is the number one country in oil exports and is pretty rich so it can afford it. HR Professionals here find extreme challenges, a collaborative environment and help from all over the world, also they are sometimes conflicted due to the amounts of policies available, whether it is local, regional, and/or global, Some burnout and decide to “retire” to one of the above sectors and others enjoy the drive and accomplish.
A small observation here, this sector is HIGHLY delusional, they are still in the mentality of dealing in a 3rd world country!
- Entrepreneurial/Venture Capital:
Some examples of those companies include:
It might be noticeable that the tech industry dominates this market, but it is worth mentioning that VC can fund long-existing organization taking Kudu as a prime example.
Advancements are tied by both organizational achievements and personal hard work. opportunity is available to whoever wants it, let’s get things straight, some companies have their negative points, Ego becomes a very important factor to focus on, bureaucracy is there somewhat lower but still there, and the training -depending on the industry- is mostly On-The-Job training and all in all, at least if you work yourself you will succeed. Also, compensation and benefits depend solely on the company’s financial performance. HR Professionals here find extreme challenges, and very little staff members as it is usually a start-up or going through a transformation if done right, in the adequate time the size of the team expands to facilitate the growth, but it is rare.
- Freelance:
A person who is self-employed and is not necessarily committed to a particular employer long-term. Freelance workers are sometimes represented by a company or a temporary agency that resells freelance labor to clients; others work independently or use professional associations or websites to get work.
This emerging sector in the business varies and depends on experience and professional certifications and accreditations. Compensation is dependant on the delivery of a set of agreed-upon deliverables in a certain timeframe. Everything is centralized and self-paced.
So let’s sum everything up:
A final note, some organizations might be going a transformation or are just established in a way that combines more than one of the above-mentioned segmentations.
Some international organizations decide to partner with an existing local entity and form a Joint Venture (JV), other organizations get bought by a Venture Capital, and so on and so forth…
Again, I am only writing my observation, and it is subject to bare mistakes.
