Al-Araj: Youth need clear career path

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Updated 18 December 2012

Al-Araj: Youth need clear career path

Boosting education, diversifying the skills of Saudi youths and activating the private sector’s role in the employment process are the three main steps that should be taken in the next two decades, says Engineer Khaled A. Al-Araj, managing director of Al-Araj for Executive Search as well as of its three sister companies in the same business.
A strong proponent of Saudization, he runs one of the most active recruitment consultants in the Kingdom.
He has appointed a Saudi national as the chief operating officer and recruited hundreds of management staff in different functional areas for some of the country’s most aggressive and well-structured companies in various industries.
In an exclusive interview with Diana Al-Jassem of Arab News, Al-Araj underlines the importance of finding solutions to education, housing, training and other critical sectors in the Kingdom.
He also stresses the need to build skilled human resources to face the upcoming challenges in the market.

Rapid change

What, in your opinion, are changes that would have a major impact on the lives of Saudi nationals in the coming 20 years?
Having been a career executive in various industries myself, I see the need for a drastic re-orientation of our educational system. In my view, our colleges and universities are not doing a good job, neither in imparting knowledge nor in developing skills, especially the right attitudes. I often meet fresh college graduates applying for a job who do not know even how to properly present themselves at interviews, prepare a good CV, and worse, lack the skills expected of them. Also, we need more specialized institutions to teach the skills needed at the workplace for the hundreds of thousands of our youth who are not inclined to pursue four-year degree programs in universities. I am therefore addressing the needs of high schoolers or college dropouts who lack the skills to get employed. This need has been addressed by our government somehow through the Technical and Vocational Training Corporation (TVTC) for over 30 years. However, the system still requires a major revamp by working more closely with the private sector to identify the specific skills needed in the market, develop a job-oriented curriculum, and emphasize on-the-job apprenticeship. Also I see the need for the private sector to follow the examples of some companies, both multinational and local, that have established their own in-house training program for new recruits. Such companies have excellent training programs dedicated not only for new employees but also for developing talent to open employees’ career track and ensure succession. I think HRDF (Human Resources Development Fund) has been very innovative in the past one and a half years in partnering with the private sector, coming up with out-of-the-box ideas that will make a major impact in the market.

Role of leadership

What do you think are the leadership roles regarding organizations in the Kingdom? What are the factors/reasons for their current state?
The HR departments of some of our companies already know the following practices, but I would emphasize the importance of proper assimilation of new employees. They would feel especially welcome if they are introduced to the chief executive officer ideally in groups even if they are fresh graduates, as new members of the family. Initially they should be given the proper guidance, coaching in what may seem as complex tasks when they are new on the job, and be given constant follow-up until they are able to work with minimal supervision. Periodic performance reviewed will give opportunity for the employees to voice their concerns, and improve on their shortcomings. Open communication channels up and down the organization will provide a healthier working environment and minimize turnover. It will be good to take note of the HR practices of some companies, notably Almarai and Savola, which follow the models of multinational companies that are known to be effective.

Challenging tasks

What are the most difficult decisions that need to be implemented in the Kingdom within the next 20 years?
I believe that the most difficult decisions needed in the coming 20 years are the following: How to pursue the targets of Saudi employment, male and female, through the efficient and fast transfer of technical skills, business acumen and leadership, and valuable experience and expertise of expatriate employees. Change is needed in value orientation, from white collar to blue-collar jobs.

Sustainable development

What goals would you set for the Kingdom’s development? And how could these goals be achieved through your current position?
I think there are very important sectors that need to be developed in the Kingdom although I am not contributing to these sectors. I tried my best to achieve higher rates of Saudization, where I tried to create a balance to employ both male and female Saudi nationals. Talking about the sectors that I wish to see them grow in the next two decades, I would like to see more investments in petrochemicals and/or downstream industries to promote exports, foreign investments in high-tech industries, and of course more importantly, investments to produce skilled manpower base.

What characteristics do you think are important for the Kingdom’s officials? How would such characteristics contribute toward the Kingdom’s further development?
The leader of any organization in the current stage and the future has to be open, transparent, modest and go down to the public to hear and understand their basic needs, the obstacles and important issues of concern to them. With these policies, it will be easier to solve their problems and for them to contribute in developing the country.

Creative project

Give me an example of the most creative project that you wish to establish in the Kingdom?
An on-the-job training project Kingdomwide that will train and hire thousands of young citizens, male and female.

KSA in three words

What three words would you use to describe the Kingdom in the coming 20 years?
My beautiful mother. My mother will always be beautiful, and the same is true for my country. No matter what she says, I will follow. My mother as well as my country will accept me as I am.

Human rights

How can we all improve human rights in Saudi Arabia? What are your expectations regarding human rights practices in the coming 20 years?
People need to know what is required of them, what is not allowed, and act accordingly. People should show more respect for women, children, labor, housemaids, etc.. My expectations for the future are more aggressiveness and protection for locals and also foreigners. We are humans, and humans have to be treated with dignity.

Biggest challenge

What is the biggest challenge facing the Kingdom today?
To minimize the growing rate of unemployment. With the numbers of the unemployed increasing every year, there is imminent risk of social instability. The Saudization policy should be implemented with out-of-the-box ideas, providing companies with clear guidelines as well as stimulus to follow through. This is very tough, because the Ministry of Labor has to assimilate the yearly buildup of the unemployed and it will not be solved by quick solutions. Even families also have a role in solving such problems. The private sector has to be ready to accept some of the tough new regulations that the Ministry of Labor will pass relating to the Saudization program. The unemployment problem is not solely the government’s concern. It is also an issue for the private sector.

What are the most prominent economic activities in the Kingdom?
Petrochemicals (basic industries), downstream projects, trading and now in the last 10 years or so real estate construction and development. On the other hand, the neglected sectors are service industries and tourism.

Housing growth

There is a huge demand for housing in the Kingdom because of the ever-growing young population. The government has also put emphasis on this sector as it has allocated SR 250 billion in the budget for housing. Do you believe housing needs much more attention from the government and private sectors?
I would say ‘Yes, of course.’ The housing sector really needs far more attention from all parties. However, I feel the Ministry of Housing is not doing a good job. The demand is high, yet the handling of applications is done slow and leads to backlog of applications. I feel they need to work more aggressively to handle this mega problem.

Role of SMEs

There is a need to boost SMEs (small and medium enterprises) in the Kingdom as it creates various jobs. What role do you see for the SMEs in the Kingdom’s economic development?
I expect a bigger role for the small businesses for years to come provided Saudization is pursued early on, otherwise, many companies will closing down. SMEs would be a golden sector that creates various jobs for citizens.

Knowledge hunt

Education is always a priority for the Kingdom. What changes do you envisage in the education system to prepare Saudi youth for the knowledge-based economy?
Basic education, up to secondary level, needs to be given a further boost. Beyond high school, new routes in education should be given toward more skills development, providing skills in entrepreneurship to promote small business incubation, and retraining to prepare workers to take up positions of higher responsibility and build a career.

Fair opportunities

How do you see Saudi women’s contribution in the labor, social and political areas in the coming 20 years?
I am for the employment of women, either in companies or establishing their business, provided the cultural demarcation line is followed. We should give them opportunities to contribute politically and socially.

What is required in order for Saudi women to actualize your future vision?
For them to succeed in their endeavors, new regulation should be enacted with strong support for implementation.

Saudi media

What measures and standards are yet to be (and must be) introduced to Saudi media, and what are your expectations in the next 20 years?
I respect the professionalism of our media men and women, observing the code of ethics in communications and the values of Islam in their reportage of events and issues. More of success stories in entrepreneurship (talking about small and medium industries) that provide models to budding businessmen, articles on opportunities for green investments, as well as advise from experts would be very helpful. An expanded on-line edition, as well as tie-ups with mobile phone carriers, will be very useful for executives.

Learning from the past

What are the three or four mistakes that have been repeated in the Kingdom during the past 10 decades and how could we eliminate them in order to develop the Kingdom?
Ventilating new ideas, whether it is a new system, a new policy or a different product/service/business line among different sectors in the organization and hearing people’s voices before making a decision. Emphasis should be given on the importance of a healthy working environment and a clear career path to Saudi employees.

Message to the youth

Given that the youth make up the majority of the Saudi population, what message would you want conveyed to them? What else would you say to the rest of the population?
Don’t expect the government to do everything for you. You have to work hard to improve your knowledge, your skills and even your attitude. Competition in the job market will be tough as companies will be selective, basing their hiring decisions on the best candidates applying for a job.

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Al-Araj’s top goals:

Major changes required in:
— Boosting education system
— Rebuilding and improving our human resources
— Activate the role of private sector in Saudization

The leadership role should focus on:
— HR practices should be open
— Having open communication channels with employees

Challenging tasks are:
— Pursue the target of Saudization
— Training young Saudis to compete in domestic and international markets
— Fast transfer of technical skills

Describing the Kingdom in three words:
— My beautiful mother

Biggest challenge:
— To minimize the growing rate of unemployment
— Building a system and enforcing it Saudiaztion with the Ministry of Labor’s plans

Requirements for housing development:
— The housing ministry needs to work more aggressively to handle this mega problem

Role of SMEs:
— Creation of more job opportunities for upcoming generations

Education needs:
— More training courses and more qualified teachers
— Providing skills in entrepreneurship to promote small business incubation
— Retraining to prepare workers to take up positions of higher responsibility

About Saudi women:
— Women’s contributions have been growing
— Women’s role can be bigger in society and labor arenas
— Women should be enacted with strong support for implementation

Mistakes could be avoided through:
— Introducing new ideas in systems or policies
— Thinking and hearing people’s voice before making a decision
— Creating a healthy work environment for Saudis

Message to youth:
— Work hard to improve your knowledge, your skills and even your attitude

Market unsure over Shire's backing of $64 billion Takeda bid

Updated 25 April 2018

Market unsure over Shire's backing of $64 billion Takeda bid

  • Takeda shares fell 7 percent on news of possible deal.
  • Combined company would have its primary listing in Tokyo and also offer American Depository Receipts

Rare disease specialist Shire has announced it was willing to recommend a sweetened $64 billion offer from Japan’s Takeda Pharmaceutical Co. to shareholders, in what would be the biggest acquisition of a drug company this year.
But shares in Takeda extended recent losses, tumbling 7 percent as investors fretted over its ability to buy a company twice its size, raising doubts about whether Shire shareholders will accept a bid that is 56 percent in new Takeda shares.
The stock slide — 18 percent since the news of a possible bid broke — makes the cash-and-share deal less appealing to Shire shareholders, some of whom may be reluctant or unable to hold Takeda shares.
“While this offer represents a solid improvement over Takeda’s third bid (38 percent cash), we still wonder if it is enough to satisfy Shire shareholders,” said Jefferies analyst David Steinberg.
Shire shares slipped 0.8 percent to 39 pounds by 0850 GMT, well below Takeda’s 49 pounds offer, signalling skepticism about the deal as Takeda’s falling stock price erodes the bid’s $64 billion headline value.
Without a deal, Shire shares could fall back to mid-March levels of 30-32 pounds, pressuring management to find other ways to realize value. Prior to Takeda’s approach, Shire was already considering divestments and a split in its operations.
It is now four weeks since Takeda first revealed it was considering a bid and the absence of firm interest from rivals means investors see only a low chance of an interloper emerging.
The latest development, first reported by Reuters, comes after London-listed Shire rejected four previous offers from Takeda.
The fifth offer is worth 49.01 pounds per share, comprised of 27.26 pounds per share in new Takeda shares and 21.75 pounds per share in cash. That represents a 4.3 percent premium to Takeda’s fourth proposal on April 20 and an 11.4 percent premium to its first approach on March 29.
Shire, a member of Britain’s benchmark FTSE 100 stock index, said its board agreed to extend a Wednesday regulatory deadline to May 8 so Takeda can conduct more due diligence and firm up its bid. Shire added the deadline may be extended further if needed.
Any deal is subject to the resolution of several issues, including completion of due diligence by Shire on Takeda, the Dublin-based company said.
A deal would significantly boost Takeda’s position in gastrointestinal disorders, neuroscience, and rare diseases, including a blockbuster haemophilia franchise.
If successful, it would be the largest overseas acquisition by a Japanese company and propel Takeda, led by Frenchman Christophe Weber, into the top ranks of global drugmakers.
Weber, who became Takeda’s first non-Japanese CEO in 2015, has said publicly it was looking for acquisitions to reduce its exposure to a mature Japanese pharmaceutical market.

The combined company would have its primary listing in Tokyo and also offer American Depository Receipts — a move that would give Shire investors an opportunity to cash out more easily.
But the transaction would be a huge financial stretch, and Takeda investors have been skeptical about the merits of a Shire deal, given the size of the potential purchase and concerns that a large share issue will be needed to fund it.
Moody’s said the deal would pile up debt and hit Takeda’s credit ratings. “This huge acquisition bodes a spike in leverage that could result in a multi-notch downgrade,” said analyst Yukiko Asanuma.
Ambitious cost cutting is also seen as necessary to make the deal pay, and the uncertainties facing an enlarged group would spell a big change in the investment case for holding Takeda.
“Takeda’s shares have been valued for their stability and relatively high dividend,” said Daiwa Securities analyst Kazuaki Hashiguchi, adding this made them attractive even to investors without specialist knowledge of the drug sector.
Takeda, now worth $33 billion by market value, had 466.5 billion yen ($4.3 billion) in cash and short-term investments as of the end of December. It said yesterday it intended to maintain its dividend policy and investment-grade credit rating following the deal.
Dealmaking has surged in the drug industry this year as large players look to improve their pipelines. A Takeda-Shire transaction would be by far the biggest.
Shire has long been seen as a likely takeover target.
Botox-maker Allergan Plc said last week it was considering making a rival offer, only to scrap it hours later due to pushback from shareholders. Shire was also nearly bought by US drugmaker AbbVie Inc. in 2014, until US tax rule changes caused the deal to fall apart.
Shire traces its roots back to 1986, when it began as a seller of calcium supplements to treat osteoporosis, operating from an office above a shop in Hampshire, southern England. Since then, it has grown rapidly through acquisitions to generate revenues of about $15.2 billion last year.
But it has been under pressure in the past 12 months due to greater competition from generic drugs and debt from its $32 billion acquisition of Baxalta in 2016, a widely criticized deal.
It announced last week a sale of its oncology business to unlisted French drugmaker Servier for $2.4 billion.