Glob l Workforce Study Saudi Arabia

Saudi Arabia executive summary Global Workforce Study

Table of contents

Global Workforce Study overview 4

Key issues analysis

Issue 1 – Productivity wall 5

Issue 2 – Work pressure 5

Issue 3 – Health and well-being 5

Issue 4 – Trust in leadership 5

Issue 5 – Talent retention 6

Issue 6 – Manager enablement 7

Issue 7 – Advancement challenge 7

Issue 8 – Pay for performance 7

Issue 9 – Financial security 8

Issue 10 – Communication effectiveness 8

Recommendations for Saudi businesses 9

Sustainable engagement 10

The importance of sustainable engagement 12

Key tips for leaders 12

About the survey 13

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The study is designed to help companies better understand their diverse employee segments and the factors that influence employee performance by gauging changing attitudes that affect attraction, retention, engagement and productivity. It is based on the opinions of more than 32,000 employees selected from research panels that represent the populations of full-time employees working in large and mid-size organisations across a range of industries, in 29 markets around the world. In Saudi Arabia, the research covers the opinions of around 500 employees.

This paper represents the main issues facing employers in the Kingdom of Saudi Arabia, and highlights areas they should carefully consider as they strive to attract, engage and retain the right employees to grow their business in a sustainable way:

• Shaping a company culture that involves employees, rewards performance and stimulates clear, frequent and honest communications.

• Installing tools and processes to assess the needs of their diverse workforce and to support employees in the management of their careers.

• Equipping managers with the new basic skills required to earn strong, sustainable contributions from individuals and leverage the diversity within their teams.

Global Workforce Study overview

The Towers Watson 2012 Global Workforce Study provides a comprehensive snapshot of the views and attitudes of employees in a period marked by dramatic and continuing economic swings, deep-rooted financial concerns, political turmoil and regulatory change.

Key issues analysis

Issue 1 – Productivity wall

Our study found that eight out of ten employees in Saudi Arabia are willing to put in additional effort beyond what is normally expected to help their organisation succeed. Nearly half of employees agree they have been working longer hours than usual for the previous three years and 43% expect this to continue.

Furthermore, a quarter of Saudi employees are investing energy to overcome ‘substantial obstacles’ to get their work done, but just over half (51%) feel they have their supervisor’s support in doing so. More than six out of ten believe they have the necessary tools and resources to achieve exceptional performance, however only two-fifths (42%) feel they have access to the training they need to be productive.

Issue 2 – Work pressure

One-fifth of Saudi employees say the amount of work expected of them is unreasonable and there are not enough employees to get the job done. Given employees are continuing to make extra efforts, it is not surprising that two-fifths of Saudi employees say they are frequently affected by excessive pressure at work.

The fact that one in two employees say these stress levels are manageable suggests they are rising to the challenge. The question is how well and for how long?

During recent times, Saudi employees have also been burdened by constant change, particularly as a result of the GDP growth in the Kingdom during the last five years. The wear and tear of volatility in the work place is a prominent feature in the survey results, with 36% saying they are tired of organisational change.

Issue 3 – Health and well-being

Health promotion is clearly in the best interest of employers. Healthy employees are more productive than unhealthy or absent ones, who not only cost businesses in terms of lost productivity but also increased health insurance premiums. Yet, just 37% of Saudi employees agree their organisation makes it possible for employees to enjoy a healthy balance between work and personal life, and a similar proportion (36%) say their senior leaders take a sincere interest in their well-being, considerably lower than the global average of 45%.

Furthermore, just one-third (32%) of Saudi employees think their organisation promotes a healthy work environment (for example, health programmes, healthy options in the cafeteria, and access to relevant information). Active health promotion makes good business sense, yet seems to be low on Saudi employers’ list of priorities.

Issue 4 – Trust in leadership

There are some doubts about the level of interest and support coming from above, resulting in a climate of disbelief in the organisation and its intentions. Our study found that less than half of Saudi employees have trust and confidence in the job being done by their senior leaders.

Discussing and addressing some of the issues and barriers that employees face in their workplace is key to closing this ‘leadership gap’. For instance, employees can have a stronger ‘voice’ in resolving challenges affecting the business. This means having opportunities to feed their ideas up the line, being heard, and seeing action taken on their feedback. And our data shows that companies that communicate effectively also perform better financially.

However, currently less than two-fifths of employees think their senior leaders do a good job of involving employees in decisions that affect them, seek their ideas and suggestions or do a good job of acting on employee feedback.

Employers can provide more clarity at all stages of the employee lifecycle and rebuild trust by addressing the following key issues.

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Issue 5 – Talent retention

It takes time, energy and investment to recruit and develop the right people for the right roles at the right time. However, there is a risk that the return on this investment could be signifi cantly eroded if employers are unable to hold on to the people they need and ensure they are getting the best out of them. More than a third of Saudi employees (36%), say they are likely to leave their current employer within the next two years. However, 49% would prefer to remain with their organisation even if a comparable job

were available in the marketplace, suggesting many employees would only leave reluctantly. The challenge for Saudi businesses is to ensure that the people they retain are the ones who are committed to the organisation, its aims and values, and have trust and confi dence in senior leadership. There is a risk that businesses lose the very people they need most and are left with those who are disillusioned and without the tools, inclination or support needed to progress. Figure 01 shows the key drivers of attraction and retention in Saudi Arabia.

“The challenge for Saudi businesses is to ensure that the people they retain are the ones who are committed to the organisation, its aims and values, and have trust and confi dence in senior leadership.”

Figure 01. KSA drivers of attraction and retention

Driver Attraction Retention

1 Base pay/salary Base pay/salary

2 Job security Job security

3 Opportunities to learn new skills Short-term incentive for example, annual bonus

4 Opportunities to advance in my career Retirement benefi ts

5 Convenience of work location Opportunities to advance in my career

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Issue 6 – Manager enablement

The study reveals that line managers are not able to maximise their teams’ performance and contribution to the business and two key factors are standing in their way. Firstly, their role and performance measures are often structured in such a way as to downplay the value of time spent developing their team. For example, a manager should be rewarded for the progress and success of their direct reports, and less for their own sales growth or profi tability targets. Secondly, local managers are not effective in coaching for excellence. It is therefore, unsurprising that around half of Saudi employees feel managers have the time for people management and that a similar proportion (53%), say their manager coaches them to improve. In the time it takes to say ‘thank you’, targeted recognition can be shared between employee and supervisor to boost performance. Recognition is provided by supervisors less than half as often as it should be to sustain or improve performance, with just 43% of Saudi employees saying their immediate supervisor provides frequent recognition for a job well done.

Issue 7 – Advancement challenge

Career advancement is one of the top fi ve reasons why employees join and leave an organisation. Those organisations that excel fi nancially continue to get advancement right. This part of the deal performs poorly for Saudi employees. In Saudi Arabia today, less than two-fi fths (37%) say their organisation does a good job of providing opportunities for advancement and a similar proportion indicate that their organisation is ineffective at explaining how they can advance.

Employees are struggling to take more control of their careers when less than two-fi fths say their organisation provides career planning tools and resources that are helpful to them (for example, coaching self-assessment, career paths, job rotation, competencies). One way to deal with this challenge is to provide alternative ways to advance, beyond the traditional ladder. Employees can become specialists or advance through developing different talents.

Issue 8 – Pay for performance

The study reveals that base pay/guaranteed salary is the number one driver of attracting and retaining employees, but only one-third of employees (34%) think their organisation does a good job of explaining their pay and the value of their total rewards programmes.

There is also a clear lack of faith in pay for performance with more than one-third of employees (34%) not seeing a clear link between their job performance and pay. It is therefore no surprise that when offered the choice they would prefer to receive larger base pay increases with a smaller bonus opportunity.

“In the time it takes to say ‘thank you’, targeted recognition can be shared between employee and supervisor to boost performance.”

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Issue 9 – Financial security

The global financial crisis has had a significant economic impact on many individuals, undermining their financial security both now and into retirement.

Over half of respondents worry about their future financial state and agree that retirement security has become a higher priority for them over the last three years. One in two employees are willing to set aside a bigger slice of their pay cheque each month to ensure they are prepared when they reach retirement. Two-fifths of Saudi employees expect to retire later, and just 33% are confident of having enough financial resources to last 15 years into retirement.

This lack of confidence in financial futures can, at least in part, be attributed to the fact that employees do not know the value of what they currently receive, leaving them unable to plan effectively for the future. One way to reduce this anxiety is to ensure employees are aware of the content and value of their total reward and the wider Employee Value Proposition (EVP), enabling them to assess the nature and size of any gaps in support and empowering them to take greater control in determining the right solution for them.

Issue 10 – Communication effectiveness

An overarching theme that can be detected throughout the study refers to the efficacy of communication. Results in Saudi Arabia are behind other regions on this topic, and employees in Saudi more than employees of other regions, demand to know more about and understand a variety of issues including:

• Business strategy and the planned action to deliver that strategy

• The customer needs and how their actions affect the customer

• Learning, development and career advancement opportunities

• Performance management process • Pay programmes

In summary

Employees want to work hard for customers and their organisation and they are working more hours than ever to this end. But they are anxious. They have low confidence that leadership will generate necessary improvements in job security, pay and opportunities for advancement they require. This is driving employees to be more risk averse and limiting innovation and growth. This state of hard work coupled with anxiety over elements that cannot be controlled by the employee can lead to burn out, absenteeism and turnover. What is the solution? Leaders and managers have much at their disposal to turn things around, not least removing obstacles in day-to-day work, building a culture of health and well-being, getting creative about advancement, rewarding performance and clarifying the deal on offer to their employees – pay, benefits and retirement solutions, flexible working and a leadership cadre with high integrity that empowers its people to deliver. Employees want to roll up their sleeves and work in partnership with management to make a difference. This report reviews the data and makes some suggestions on how we can help them to do just that.

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Put performance first Performance management remains one of the toughest challenges for organisations, their HR functions and managers themselves. But ultimately, getting performance management right and equipping managers to do it well provides enormous benefits, not only in retention and engagement, but also in focusing people to do the right things to drive the business forward. We recommend that organisations focus on the most senior roles first and then, over time, cascade performance management down the organisation.

Employee value proposition and the role total reward plays The complexity, costs and risks associated with employee benefits pose an increasing threat to business performance. Yet benefits have long been a bulwark of the employee deal, and a competitive necessity for recruiting and retaining the right people. Organisations need to take a holistic view of their whole EVP and the role total reward plays. This does not necessarily mean adding further benefits or changing what is on offer but it certainly means communicating effectively so that employees understand their current package.

Engaging management to drive changeManagers play a central role in delivering the promises made in the EVP, and also as a result of building trust and engagement in the organisation. Employees who feel an intellectual and emotional connection to the vision and goals of their company are more likely to commit extra effort to the job and are therefore prepared to go that extra mile to get things done – demonstrating discretionary effort. Highly effective companies are much more likely to have managers who clarify the organisation’s visions and values through words and actions. They are on the front lines when it comes to introducing new ideas and approaches to work, as well as in providing context and guidance regarding pay, performance and career growth.

Re-evaluate talent management strategiesOrganisations need to ensure they have a deeper understanding of the different needs and expectations of the talent pools pivotal to the strategy, wherever those individuals reside. Create a common framework for career, performance or reward management that can ‘house’ more nuanced programmatic variations that align with strategic business needs.

Use segmentation strategiesSegmentation is key across all areas of human resources. Companies should look specifically at the employee groups most critical to the success of the business to understand and define the areas that matter to them most. Employee survey techniques help companies identify with some precision which reward and talent interventions are most important to which employees, based on their region, job function and level, importance to the business and other relevant demographic or strategic measures. This is the first step in creating a talent management programme that supports engagement and retention, and provides the best possible return on investment.

Focus on career advancement programmesPut significant emphasis on career development, especially in terms of establishing and sustaining a transparent and well-defined career advancement programme. A career framework that lets employees see potential career paths, and understand the skills and competencies they need in order to follow those paths, as well as providing opportunities for meaningful lateral moves, is a very significant factor in retaining top talent and ensuring succession.

The importance of risk managementEnsure building blocks are in place for a comprehensive governance and risk management model that will support and reinforce workforce strategies and programmes. In today’s environment in particular, companies need a clear understanding of the significant business risk and cost implications of their HR programmes. An effective governance model enhances a company’s ability to make better decisions about talent and reward programme investments and activities, by providing a deeper understanding of their relationship to strategy and business performance. Towers Watson believes that this will be a core competency for successful organisations in Saudi Arabia during the next five years.

Aim for sustainable engagementWith the continuing business challenge of needing to do more with less, a sustainable model for employee engagement is now needed to replace the crisis-led approach of recent years. Our 2012 global research shows that engaging employees is, and will be, a key driver and enabler in business priorities such as cost reduction, enhanced customer service and increased productivity.

Recommendations for Saudi businesses

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Our research conducted over the last decade has demonstrated unequivocally the value of employee engagement as a driver of improved business performance. Our unique ‘Sustainable Engagement Framework’ was developed and validated from extensive analysis of our organisational survey and Global Workforce Study data, coupled with current theories in organisational science. The link to business results is shown in Figure 02.

Sustainable engagement is the sum of three distinct elements.

One is traditional engagement, defined as employees’ willingness to give effort to their employer.

The second is enablement, defined as having the tools, resources, and support to get work done efficiently.

The third is energy, defined as a work environment that actively supports physical, emotional and interpersonal well-being.

Enablement and energy are the really critical factors in this sustainable engagement equation. In the last few years, with employers struggling to manage costs and remain competitive globally, the importance of enablement and energy has become really clear. Full engagement depends on all three elements and will only hold over time with all three in place. Companies that do not take steps to improve on-the-job support for employees and create a sense of attachment to the organisation could see engagement decline, directly affecting their ability to grow their business.

Sustainable engagement

Companies with low

engagement

Companies with high

engagement

Companies with high

sustainableengagement

9.9

14.3

27.4

Ope

ratin

g m

argi

n

3x higher

Figure 02. Sustainable engagement and business results

Source: Towers Watson’s global normative database.

“In the last few years, with employers struggling to manage costs and remain competitive globally, the importance of enablement and energy has become really clear.”

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Figure 04. Drivers of sustainable engagement

Driver Global Saudi Arabia

1 Leadership Supervision

2Stress, balance and workload

Goals and leadership

3 Goals and objectives Leadership

4 Supervision Empowerment

5 Image Image

Source: Global Workforce Study – Saudi Arabia.

Figure 03. From engagement to sustainable engagement

Sustainable engagement

FeelEmotional/affective attachment to the

organisation

ThinkRational/cognitive

understanding of the organisation’s strategic goals, values, and how

employees �t

ActMotivation and

willingness to invest discretionary effort

to go above and beyond

Engaged

Enabled

Energised

A local workenvironmentthat supportsproductivity

andperformance

Individualphysical

interpersonal and emotional

well-being at work

Engagement

Rational

Motivational

Emotional

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Key tips for leaders 1. Create an atmosphere of innovation Encourage employees to actively participate in the future direction of the business and put forward solutions to problem areas.

2. Provide positive leadership and direction The global financial crisis has created a disconnect between senior leadership and employees which has left many workers nervous about the future. Bridge the gap by regularly communicating change to the business and ensuring that your organisation has a clear and active voice at the top.

3. Be brave Find opportunities for your staff to do work that might be out of their comfort zone. This could give them the opportunity to move sideways in the organisation if a promotion opportunity is unavailable. It will also improve their wider skill set which will ultimately benefit the business.

4. Invest in your people Make sure that your senior staff and middle management have the time, training and tools needed to inspire their teams and make it clear what is expected of them. Motivation can be a powerful tool for improving performance – take time to make it an everyday part of your company culture.

5. Control the controllable Continued global economic uncertainty will have an inevitable impact on employer confidence but they should not have an impact on how you talk to your people and the processes that keep your business running. Make sure that you have the right tools and processes in place – from software to training – to make sure that your employees are confident about their role, know what is expected of them and can do the best possible job.

The importance of sustainable engagement

As indicated in Figure 05, a fifth of employees in Saudi Arabia are disengaged, compared to 26% globally, and however 48% of them are highly engaged (35% globally) while a third are either detached or feel unsupported.

Figure 05. The current status of the workforce in Saudi Arabia

Source: Towers Watson 2012 Global Workforce Study

Highly engagedHighly engaged: Employees who scored high onall three elements of sustainable engagement.

Unsupported: Employees who are traditionallyengaged, but lack the enablement or energy forcomplete engagement.

Detached: Employees who feel supported and/orenergised, but lack a sense of traditional engagement.

Disengaged: Employees with less favourable scoresfor all three aspects of sustainable engagement.

Unsupported

Detached

Disengaged

48%

16%

16%

15%

22%

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Key terms

High-performance organisationsTowers Watson annually updates a Global High Performance Companies Norm, which includes organisations which meet two criteria:

• Above industry-specific averages for financial performance and,

• Favourable employee opinions of company culture and organisational practices.

About the survey

The Towers Watson 2012 Global Workforce Study provides a comprehensive snapshot of the attitudes and moods of employees globally in a period marked by dramatic and continuing economic swings, deep-rooted financial concerns, political turmoil and regulatory change.

The Towers Watson Global Workforce Study covers more than 32,000 employees selected from research panels that represent the populations of full-time employees working in large and midsize organisations across a range of industries in 29 markets around the world.

There were 496 respondents in Saudi Arabia. The study is designed to help companies better understand their diverse employee segments and the factors that influence employee performance on the job by gauging changing attitudes that affect attraction, retention, engagement and productivity.

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Copyright © 2013 Towers Watson. All rights reserved.TW-EU-2013-30791. May 2013.

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About Towers WatsonTowers Watson is a leading global professional services company that helps organisations improve performance through effective people, risk and financial management. With 14,000 associates around the world, we offer solutions in the areas of benefits, talent management, rewards, and risk and capital management.