The Impact of the Saudization Policy on Recruitment and Retention: A Case Study of the Banking Sector in Saudi Arabia
DOI:
https://doi.org/10.18533/job.v1i5.51Keywords:
Banking, Human resource management, Saudi Arabia, Saudization.Abstract
To reduce unemployment and reliance on expatriate workers, the Saudi Arabian government has been implementing a Saudization programme to replace expatriates with Saudis. This has succeeded in the public sector, but not in the private sector, except in banking, which is perceived as a white-collar occupation and acceptable in Saudi society. As such, this study investigates the impact of Saudization on recruitment and retention in the banking sector to see what lessons have been learned and what action is required. A systematic literature review was conducted, followed by questionnaires with 48 branch managers, and interviews with 12 Human Resource managers of key banks.
The findings show that Saudization has an impact on several aspects of recruitment and retention in the banking sector, in particular, banks must provide specific training to Saudi recruits, revise working hours and promote the attractiveness of the post. Adopting such practices can benefit Saudi banking and contribute to the fulfillment of Saudization. Â
References
Abu Elanain, M. H. (2009). Job characteristics, work attitudes and behaviors in a non-Western context. Journal of Management Development, 28(5), 457-77. http://dx.doi.org/10.1108/02621710910955985
Achoui, M., & Mansour, M. (2007). Employee turnover and retention strategies: Evidence from Saudi companies. International Review of Business Research Papers, 3(3), 1-16.
Al-Ali, J. (2008). Emiratisation: drawing UAE nationals into their surging economy. International Journal of Sociology and Social Policy, 28(9-10), 365-379. http://dx.doi.org/10.1108/01443330810900202
Al-Darwish, M. A., Alghaith, N., Behar, M. A., Callen, M. T., Deb, M. P., Hegazy, M. A., Khandelwal, P., Pant, M., & Qu, M. H. (2015). Saudi Arabia: Tackling Emerging Economic Challenges to Sustain Growth. Washington, D.C.: International Monetary Fund.
Al-Dosary, A. S., & Rahman, S. M. (2005). Saudization (Localization) – A Critical Review. Human Resource Development International, 8(4), 495-502. http://dx.doi.org/10.1080/13678860500289534
Al-Dosary, A.S. & Rahman, S.M. (2011). Localisation in Saudi Arabia. New York: Nova.
Al-Fawzan, M. A. (2005). Assessing Service Quality in a Saudi Bank. Journal of King Saud University, 18(1), 101-115.
Al-Muharrami, S. (2009). The competition and market structure in the Saudi Arabia banking. Journal of Economic Studies, 36(5), 446-460. http://dx.doi.org/10.1108/01443580910992375
Alromi, N. (2001). From School-to-Future Work Transitions: applying human capital and cultural capital production in the Saudi Arabian education system. PhD thesis submitted to Pennsylvania State University, Pennsylvania, USA.
Alshanbri, N., Khalfan, M., & Maqsood, T. (2014). Nitaqat program in Saudi Arabia. International Journal of Innovative Research in Advanced Engineering, 1(10), 357-366.
Alshathry, S., O'Donohue, W., Wickham, M., & Fishwick, S. (2014). National Culture as an Influence on Perceptions of Employer Attractiveness. AT Business Management Review, 10(1), 101-111.
Alsheikh, H. M. (2015). Current progress in the nationalisation programmes in Saudi Arabia. Jeddah: European University Institute and Gulf Research Center.
Baqadir, A. A. (2013). A skills gap between industrial education output and manufacturing industry labour needs in the private sector in Saudi Arabia. Ph.D. thesis submitted to the University of Glasgow, UK.
Baqadir, A., Patrick, F., & Burns, G. (2011). Addressing the skills gap in Saudi Arabia: does vocational education address the needs of private sector employers? Journal of Vocational Education & Training, 63(4), 551-561. http://dx.doi.org/10.1080/13636820.2011.589533
Bearden, W. O., Money, R. B., & Nevins, J. L. (2006). Multidimensional versus unidimensional measures in assessing national culture values: The Hofstede VSM 94 example, Journal of Business Research, 59(2), 195-203. http://dx.doi.org/10.1016/j.jbusres.2005.04.008
Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77-101. http://dx.doi.org/10.1191/1478088706qp063oa
Budhwar, P. S., & Mellahi, K. (Eds.). (2006). Managing human resources in the Middle-East. London: Routledge.
Cassell, M. A., & Blake, R. J. (2012). Analysis of Hofstede's 5-D model: the implications of conducting business in Saudi Arabia. International Journal of Management & Information Systems (IJMIS), 16(2), 151-160. http://dx.doi.org/10.19030/ijmis.v16i2.6914
CIPD (Chartered Institute of Personnel and Development) (2015a). Recruitment Factsheet. London: CIPD
CIPD (Chartered Institute of Personnel and Development) (2015b). Employee Turnover and Retention Factsheet. London: CIPD
Davis, N., & Hayashi, C. (2007). The Gulf Cooperation Council (GCC) Countries and the World: Scenarios to 2025: Implications for Competitiveness. Retrieved 12 June, 2015, from https://members.weforum.org/pdf/ Global_Competitiveness.../3_1.pdf.
de Vaus, D. A. (2002). Surveys in Social Research (5th ed.). Crow's Nest, Australia: Allen and Unwin.
DLA Piper (2012). Be Aware: Focus on Kingdom of Saudi Arabia. Retrieved 1 December, 2015, from http://www.dlapiper.com/files/Publication/8013ec0e-9213-4de5-93b1-769e55e29b70/Presentation/ PublicationAttachment/c8a4d367-e2f0-4df4-83c4-8b94cf0e0e88/Be_Aware_Middle_East_June_2012.pdf
Du Plessis, A.J. (2007). Change, organizational development and culture: human resource management's role in a future South Africa. International Review of Business Research Papers. 3(1), 1-10.
Eagle, L. (2011). Making Their Mark: Women Working in the Middle Eastern Financial Industry. Retrieved 29 December, 2015, from http://women.ezinemark.com/making-their-mark-women-working-in-the-middle-eastern-financial-industry-3221201fe5e.html
Fakeeh, M. S. (2009). Saudization as a Solution for Unemployment: The Case of Jeddah Western Region. PhD thesis submitted to the University of Glasgow, UK.
Forstenlechner, I. (2009). Workforce localization in emerging Gulf economies: the need to fine-tune HRM. Personnel Review, 39(1), 135 – 152. http://dx.doi.org/10.1108/00483481011007904
Gerhart, B., & Fang, M. (2005). National culture and human resource management: assumptions and evidence. The International Journal of Human Resource Management, 16(6), 971-986. http://dx.doi.org/10.1080/ 09585190500120772
Global Investment House (2006). Saudi Arabia Banking Sector. Kuwait: Global Investment House.
Guest, G., MacQueen, K. M., & Namey, E. E. (2011). Applied thematic analysis. Thousand Oaks: Sage.
Günsoy, C., Cross, S. E., Uskul, A. K., Adams, G., & Gercek-Swing, B. (2015). Avoid or fight back? Cultural differences in responses to conflict and the role of collectivism, honor, and enemy perception. Journal of Cross-Cultural Psychology, 46(8), 1081-1102. http://dx.doi.org/10.1177/0022022115594252
Harkness, J. A., & Schoua-Glusberg, A. (1998). Questionnaires in translation. ZUMA-Nachrichten Spezial, 3(1), 87-127.
Hines, C. (2003). Time to replace globalization with localization. Global Environmental Politics, 3(3), 1-7. http://dx.doi.org/10.1162/152638003322469240
Hofstede, G. (1984). Culture's Consequences: International Differences in Work-related Values (2nd ed.). Beverly Hills, CA: Sage.
Hofstede, G. (2002). Dimensions do not exist: a reply to Brendan McSweeney. Human Relations, 55(11), 1355-1361. http://dx.doi.org/10.1177/0018726702055011921
Hofstede, G. (2015). National Culture - Countries. Retrieved 20 November, 2015, from http://geert-hofstede.com/saudi-arabia.html.
Hofstede, G., & Hofstede, G. J. (2005). Cultures and organizations: software of the mind (2nd ed.). New York: McGraw-Hill.
Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and Organizations: Software of the Mind, 3rd ed. New York: McGraw-Hill.
Hofstede, G. (2015). National Culture - Countries. Retrieved 21 November, 2015, from http://geert-hofstede.com/saudi-arabia.html.
Howitt, D., & Cramer, D. (2007). Introduction to research methods in psychology. Harlow: Pearson Education.
Huang, X. & Van de Vliert, E. (2004). Job level and national culture as joint roots of job satisfaction. Applied Psychology, 53, 329-48. http://dx.doi.org/10.1111/j.1464-0597.2004.00174.x
Idris, A. (2007). Cultural barriers to improved organizational performance in Saudi Arabia. SAM Advanced Management Journal, 72(2), 36-54.
Jadwa Investment (2015). Saudi Labour Market Outlook. Retrieved 2nd December, 2015, from http://www.jadwa.com/en.
Jones, M. (2007). Hofstede – Culturally questionable? Paper presented at the Oxford Business and Economics Conference Oxford, UK, 24-26 June, 2007.
Kumar, R., & Uzkurt, C. (2010). Investigating the effects of self-efficacy on innovativeness and the moderating impact of cultural dimensions. Journal of International Business and Cultural Studies, 4(1), 1-15.
Leeth, J. (2014). Integrating Saudi Women into the Workforce Brings Challenges. Virginia, USA: Society for Human Resource Management.
Looney, R. (2004). Saudization and Sound Economic Reforms: Are the Two Compatible? Strategic Insights, 3(2). Retrieved 2nd November, 2015, from http://www.dtic.mil/dtic/tr/fulltext/u2/a524846.pdf.
McDowell, A. (2012). More that 1 million Saudis on unemployment benefit. Retrieved 16 November, 2015, from http://www.reuters.com/article/2012/03/28/us-saudi-unemployment-subsidyidUSBRE82R0L320120328.
McEnhill, D., Perry, N., & Sherlock, D. (2007). New Skills for Saudi Arabia: A review of provision for improving workskills. Coventry: British Council.
McSweeney, B. (2002). Hofstede's model of national cultural differences and their consequences: A triumph of faith - a failure of analysis. Human Relations, 55(1), 89-118. http://dx.doi.org/10.1177/001872670205 5001602
Mellahi, K. &Wood, G.T. (2010). Human resource management in Saudi Arabia. In P. S. Budhwar & Y.A. Debrah (Eds.), Human Resource Management in Developing Countries (pp. 135-153). London: Routledge.
Merriam, S. (1988). Case Study Research in Education: A Qualitative Approach. San Francisco: Jossey-Bass, pp. 4-25.
Moser, S., Swain, M., & Alkhabbaz, M. H. (2015). King Abdullah Economic City: Engineering Saudi Arabia's post-oil future. Cities, 45, 71-80. http://dx.doi.org/10.1016/j.cities.2015.03.001
Naithani, P., & Jha, A.M. (2010). Challenges Faced by Expatriate Workers in Gulf Cooperation Council Countries. International Journal of Business and Management. 5(1), 98-103.
Oxford Business Group (2007). The Report: Saudi Arabia 2007. London: OUP.
Oxford Strategic Consulting (2013). Maximising the Employment of Saudi Females. Retrieved 28 November, 2015, from http://www.oxfordstrategicconsulting.com/wp-content/uploads/2015/05/Maximising-Saudi-Female-Employment-.pdf
Patrick, F. (2014). Making the transition to a 'knowledge economy'and 'knowledge society'. In A. W. Wiseman, N. H. Alromi, and S. Alshumrani (eds.), Education for a Knowledge Society in Arabian Gulf Countries, Bingley, UK: Emerald Group Publishing Limited, pp. 229-251. http://dx.doi.org/10.1108/S1479-3679201400000 24018
Potter, C. C. (1989). Effective Localisation of the Workforce: Transferring Technology in Developing Countries. Journal of European Industrial Training, 13(6), 25-30. http://dx.doi.org/10.1108/EUM0000000000201
Ramady, M. A. (2010). The Saudi Arabian economy: policies, achievements and challenges (2nd ed.). New York: Springer. http://dx.doi.org/10.1007/978-1-4419-5987-4
Ramady, M. (2013). Gulf unemployment and government policies: Prospects for the Saudi labour quota or Nitaqat system. International Journal of Economics and Business Research, 5(4), pp. 476-498. http://dx.doi.org/10.1504/IJEBR.2013.054266
Randeree, K. (2009). Strategy, Policy and Practice in the Nationalisation of Human Capital: 'Project Emiratisation'. Research and Practice in Human Resource Management, 17(1), pp. 71-91.
Randeree, K. (2012). Workforce Nationalization in the Gulf Cooperation Council States. Doha: Georgetown University School of Foreign Service in Qatar.
Sadi, M. A. (2015). Labor market and the job nationalization policy: a trajectory of hospitality and tourism strategy in Saudi Arabia. European Online Journal of Natural and Social Sciences, 4(2), 414-426.
Salih, A. (2010). Localizing the Private Sector Workforce in the Gulf Cooperation Council Countries: A Study of Kuwait. International Journal of Public Administration. 33(4), 169-181. http://dx.doi.org/10.1080/019006 90903304183
SAMA (Saudi Arabian Monetary Agency) (2014). Fiftieth Annual Report. Riyadh: SAMA,
SAMA (Saudi Arabian Monetary Agency) (2015b). Financial Stability Report. Retrieved 1 December, 2015, from http://www.sama.gov.sa/en-US/EconomicReports/Financial%20Stability%20Report/FINANCIAL%20 STABILITY%20REPORT-2015.pdf
SAMA (Saudi Arabian Monetary Agency) (2015c). Quarterly Statistical Bulletin. Riyadh: SAMA Retrieved 2 December, 2015, from http://www.sama.gov.sa/en-US/EconomicReports/MonthlyStatistics/5600_S_ Monthly_Bulletin_AREN_OCT.PDF
SAMA (Saudi Arabian Monetary Agency) (2015d). Annual statistics. Retrieved 3 December, 2015, from http://www.sama.gov.sa/ar-sa/EconomicReports/Pages/YearlyStatistics.aspx
Saudi Central Department of Statistics (2014). Population. Retrieved 20 November, 2015, from http://www.cdsi.gov.sa/english/index.php?option=com_docman&task=cat_view&gid=43&Itemid=113
Saudi Ministry of Labour (2014), Guide to Nitaqat Bands, Available from www.hcci.org.sa/ (accessed 20 November 2015).
Saunders, M., & Lewis, P. (2012). Dong Research in Business and Management. Harlow: Pearson Education Ltd.
Schermerhorn, J., Hunt, J., & Osborn, R. (2004). Core Concepts of Organizational Behavior. Hoboken/Chichester: John Wiley & Sons.
Sekaran, U., & Bougie, R. (2010). Research Methods for Business: A Skill Building Approach, Hoboken/Chichester: John Wiley and Sons.
Soares, A. M., Farhangmehr, M., & Shoham, A. (2007). Hofstede's dimensions of culture in international marketing studies. Journal of Business Research, 60(3), 277–284. http://dx.doi.org/10.1016/j.jbusres.2006.10.018
Stephenson, M. L., Russell, K. A., & Edgar, D. (2010). Islamic hospitality in the UAE: indigenization of products and human capital, Journal of Islamic Marketing, 1(1), pp. 9-24. http://dx.doi.org/10.1108/175908310110 26196
Sullivan, K. (2012, November 13). Saudi Arabia struggles to employ its most-educated women. The Independent. Retrieved 4 November, 2015, from http://www.independent.co.uk/news/world/middle-east/saudi-arabia-struggles-to-employ-its-most-educated-women-8312035.html.
Whiteoak, J.W., Crawford, N.G., & Mapstone, R. H. (2006). Impact of Gender and Generational Differences in Work Values and Attitudes in an Arab Culture, Thunderbird International Business Review, 48(1), 77-91. http://dx.doi.org/10.1002/tie.20086
Yin, R.K. (2009). Case Study Research: Design and Methods (4th ed.). Thousand Oaks: Sage.
Zhang, Y., & Wildemuth, B. (2009). Unstructured interview. In B. Wildemuth (Ed.), Applications of Social Research Methods to Questions in Information and Library Science (pp. 222-231). Westport, CT: Libraries Unlimited.
Downloads
Published
Issue
Section
License
Authors who publish with this journal agree to the following terms:
- Authors retain copyright and grant the journal right of first publication with the work simultaneously licensed under a Creative Commons Attribution License that allows others to share the work with an acknowledgement of the work's authorship and initial publication in this journal.
- Authors are able to enter into separate, additional contractual arrangements for the non-exclusive distribution of the journal's published version of the work (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal.
- Authors are permitted and encouraged to post their work online (e.g., in institutional repositories or on their website) prior to and during the submission process, as it can lead to productive exchanges, as well as earlier and greater citation of published work (See The Effect of Open Access).
