How HR as a shared service is facilitating business in Saudi Arabia

Saudi Vision 2030, announced in 2016, has been the cause of many of the changes and path-altering decisions for Saudi Arabia. A part of Vision 2030 is culturing an entrepreneurial atmosphere for investors. This broad shift in Saudi Arabia’s approach was accompanied by multiple regulatory reforms, building the tourism industry, a growing Saudi workforce and a new focus on business.

In 2016, the Saudi Ministry of Civil Service began experimenting with the concept of shared services, a concept developed essentially to improve the efficiency and simplify processes for businesses, but the experiment wasn’t implemented well due to the complexity of the structure and the mindset of change management.

Recently, we have seen a fundamental shift in human resources management in all sectors, whether governmental or private, as it has moved to the modern human resources stage. There is a race to attract talent and showcase the organisational culture and workplace environment.

The Saudi government has implemented the concept of shared services in its Saudi Vision 2030 plans in order to streamline efforts, efficiency and reduce costs. The idea of shared services has allowed organisations to improve in many ways, facilitating business and keeping track of valuable and rapidly growing and changing data.

In recent news, Saudi Arabia announced a merger between the Ministry of Civil Service and the Ministry of Labor and Social Development, to become the Ministry of Human Resources and Social Development. The decision came in order to combine all government workers together, considering the preexisting alignment between both ministries. Officials confirmed that the move came to unite the efforts of all public and private sector workers, and that an efficiently-run HR system across the board will optimise the investment in HR services and bring back benefits to the workers in both sectors.

In other news came the transformation of SAGIA, Saudi Arabia General Investment Authority, to an independent ministry, separate from the Ministry of Trade. MISA, Ministry of Investment of Saudi Arabia, is a move that further solidifies the executive plans Saudi Arabia is making to achieve its Vision 2030. The ministry is living proof of Saudi Arabia’s intent to widen the range of businesses it cultures and build a diverse economy. It continues the mission of attracting investments, facilitating them and attempting to achieve sustainable development. The added bonus here is the new job opportunities that new investments bring, which links back to the progressively increasing value of Human Resources.

In 2016, along with the reveal of the Saudi Vision 2030, the Human Capital Programme was among the executive programs that aimed to help Saudi Arabia reach its 2030 goals. The programme described human capital as a crucial factor in the success of any project and aimed to nurture human talent across Saudi Arabia. A deep understanding of the value of Human Resources, both literally and as a shared service is now embedded in the Saudi understanding of business and in the Saudi Vision; and simultaneously, the concept of shared services is proving to be effective in businesses as well as governmental entities.

This leaves no room for questioning the heavy importance of HR departments in any hiring institution have. Employees are any company’s biggest asset; they are what makes or breaks it. In today’s Saudi Arabia, companies must practice localisation upon expansion in order to stay compliant, and this has played a major role in the reduction of unemployment among Saudi nationals to a significant extent. In a way, Saudi Arabia’s current focus on entrepreneurship has become directly proportional not only with economic diversification, but also with the elimination of unemployment.

HR comes in as a valuable component from the beginning of recruiting to the actual execution of jobs. It also manages to place the right candidates in the right spots, ultimately leading to business success and employee gratification. On a broader scale, it also reforms Saudi culture, bringing in good salaries, job perks and a well-functioning job market. This translates heavily in how Saudi’s live their lives, the improvement of which is the main mission of the Saudi Vision programmes.

There is no doubt that shared services are normally the most efficient model for any large organisation even with an internal functional distribution. The success of implementing the shared services model however is dependent on a number of factors and often hindered by the bureaucracy and fixed mindset of internal departments. The core lies with applying change management as a mindset firstly throughout all levels of the organisation.

The end result of a positive shared services implementation should be actual positive feedback from real stakeholders. However, it is not an easy journey; where organisations have to adopt continuous process improvement and technology to reach effective results.

Key takeaways

• Recently, we have seen a fundamental shift in human resources management in all sectors as it has moved to the modern human resources stage.
• The idea of shared services has allowed organisations to improve in many ways, facilitating business and keeping track of valuable data.
• HR comes in as a valuable component from the beginning of recruiting to the actual execution of jobs.

By Zaid Al Mashari, CEO of Proven Arabia.