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Banks coming to Saudi struggle to find talent
Released on - Thursday,29 October , 2009 -14:29 51
RIYADH- Deal-hungry international banks and firms flocking to Saudi Arabia say they are struggling to find qualified staff due to an outdated state education system that lacks business focus in an ultra-conservative country.
With the Saudi government opening up the biggest Arab stock market and planning to spend $400 billion on its infrastructure, there are plenty of deals to chase in the kingdom, which benefits from high oil prices. That is if they can find the right people.
"There is a huge demand for talent in this region that has come up over night and it has been difficult to fill that locally," Paul Gamble, head of research at Riyadh's Jadwa Investment, told the Reuters Middle East Investment Summit.
The education system, which focuses on religion, is producing thousands of graduates who do not have the skills, such as accounting, for the private job market, leading many companies to rely on expatriates for senior positions.
And when companies try to find their employees in other countries, the pickings are slim.
Even with hundreds of Wall Street bankers out of work, banks struggle to lure candidates to the kingdom, one of the most region's most conservative countries, where alcohol is banned, women cannot drive, and there is strict segregation of the sexes.
"Whoever is a candidate, and we interviewed in Dubai or Saudi... will choose Dubai," said Omar Aljaroudi, Chief Executive of the Saudi unit of Dubai-based investment bank Shuaa Capital.
Despite many firms paying premium salaries for Saudi candidates, many prefer to live in Doha, Dubai, or even Kuwait, as it is slightly less conservative than Saudi Arabia.
Still, there are about 8 million expatriate workers in the kingdom and the government is trying to force companies to hire more locals by setting quotas.
The country, which has 18 million citizens and an unemployment rate of around 9 percent, is enforcing a so-called Saudisation scheme, under which many firms in the private sector must ensure at least 30 percent of their staff are Saudis.
BIG CHALLENGE
The Saudi government has taken steps since 2004 to overhaul its education system, spending $2.4 billion on a plan to improve schools but there have been few positive results yet.
The Gulf Arab state ranked 93 out of 129 countries in the 2008 UNESCO global index assessing quality of education.
"The government is taking steps to improve the education system and is sending students abroad. There are skill shortages in the financial sector at the moment but things should improve," said Jadwa Investment's Gamble.
However, the Saudis educated abroad are usually whisked away by banks overseas and not come home.
This is something companies in Saudi Arabia can change by offering them a better career in the region, said Marcus Andrade, chief executive of the investment bank at the kingdom's largest Islamic lender Al Rajhi.
"If we don't offer them a career opportunity they won't come to us," said Andrade. "There are many people studying overseas, but we have to show them that we can provide a career path equal to any place they can go."
He said that Al Rajhi Capital, which is proud that 85 percent of its employees are Saudis, tries to keep staff by sending them abroad or exposing them early on to international markets.
"The best way for us to develop is to put our training efforts into our staff," said Andrade.
Shuaa's Aljaroudi said salaries at local Saudi banks are coming closer to the pay levels at global banks as they compete for the best talent. "The gap has narrowed," he said.
Source: Reuters