Turnover trend among Saudi staff ‘on the rise’

Updated 03 May 2014
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Turnover trend among Saudi staff ‘on the rise’

Up to one-third of working Saudi nationals surveyed recently say they intend to leave their employer within three years, according to a new survey conducted by global HR consulting firm Mercer.
The study of employers and employees across the Kingdom has also surfaced some key disparities between what both rate as important when it comes to attracting and retaining employees.
“The findings are a clear wake-up call for employers of Saudi men and women,” said the head of Mercer’s business in Saudi Arabia, Tom O’Byrne.
“Employers who don’t prepare their workforce, their HR programs and their policies to better reflect and accommodate the Saudi workforce of today and tomorrow, will end up paying a high price.”
Mercer’s team of Saudi consultants helped lead and conduct the ‘What’s Working’ study toward the end of 2013 following signs that turnover among key hires across the Saudi labor market was on the rise.
The findings come from responses from 116 HR managers, business owners and senior executives, along with those from more than 400 Saudi men and women currently employed in Saudi Arabia.
The survey showed a clear gap between worker and employer expectations around compensation, employee development, motivation, and at times, the nature of work itself.
“One in four Saudi men and one in three Saudi women told us they plan to leave their current employer within one-three years; up to 17 percent among younger employees stated they planned to stay less than 12 months,” Mr.O’Byrne said.
“These rates are cause for concern.”
Omar Alsanousi, an associate with Mercer Consulting in Saudi Arabia and one of the leads on the survey project, said HR managers and business leaders in Saudi Arabia continue to woo Saudi nationals into their organizations in response to government directives on Saudization.
“Our study has uncovered that while compensation is key to attracting Saudi nationals into and away from an employer, it is not the only driver to employee motivation and engagement to stay and grow with his or her employer,” Alsanousi said.
An example of this disconnect was on the question of variable pay.
Two thirds (72 percent) of employer respondents ranked short and long-term variable pay as having either a moderate or weak impact as an element of reward. This was in stark contrast to the nine out of ten (90 percent) of Saudi nationals who saw this element of compensation as either important or somewhat important.
Similarly, the Mercer study revealed a divergence of views around other benefits.
Forty-one percent of HR managers rated retirement benefits as having a weak impact in the reward mix, in contrast to employees who ranked the importance of retirement benefits at 78 percent.
Time-off programs were also valued differently, with 70 percent of HR managers saying that such schemes had either a moderate or weak impact, as opposed to the 58 percent of employees who thought they were important elements to consider.
Also, few respondents gave positive views about the dynamism and collegiate environment of their workplaces.
“In every age category bar one, less than five percent stated that their opinions held any weight and were respected in the organizations where they worked,” said O’Byrne.
O’Byrne says enticing and keeping Saudi nationals in the Saudi workforce will continue to be a top priority for the country’s government for the foreseeable future, so these issues need to be addressed.
“We will continue to study this issue as part of our on-going commitment to the Kingdom. Our clients and indeed all employers want to know more about the types of employment value propositions that need to exist between the Saudi employee and their employer,” he said.
“Put simply, one value proposition for one workforce is no longer going to work and employers who ignore the trends will end up paying the price,” he said.


UAE regulators ask corporates to declare exposure to Abraaj

Updated 25 min 7 sec ago
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UAE regulators ask corporates to declare exposure to Abraaj

  • Air Arabia admits $336 million exposure to Abraaj funds.
  • Abraaj sells its Latam, Sub-Saharan Africa, North Africa and Turkey Funds to Colony Capital.

DUBAI: The United Arab Emirates’ top securities regulator has asked UAE-listed companies to declare their exposure to Dubai-based private equity firm Abraaj, which filed for provisional liquidation last week.
The Securities & Commodities Authority sent a letter earlier this week and companies had until Thursday to submit their responses, Obaid Al-Zaabi, chief executive of the regulator, told Reuters.
Air Arabia, a Dubai-listed low-cost carrier, said this week that it had a $336 million exposure to Abraaj, which is the Middle East’s biggest private equity firm. Shares in the airline plunged because of these links.
Al-Zaabi said some companies in the UAE had exposure to Abraaj, without naming them.
A court in the Cayman Islands, where Abraaj Holdings is registered, ordered this week that PwC be appointed as provisional liquidators of the company and Deloitte as liquidators of Abraaj Investment Management Ltd.
Abraaj said that the latest restructuring agreement has received in-principle regulatory approval and is expected to close upon approval from the Cayman Islands court and other customary consents.
On Thursday, the Dubai Financial Services Authority (DFSA), which is the regulator of the Dubai International Financial Center (DIFC), said it would discuss “various matters” with the liquidators and “will continue to work toward safeguarding the interests of investors.”
The DFSA is involved because Abraaj has an entity regulated in DIFC.
Abraaj Group agreed to sell its Latin America, Sub-Saharan Africa, North Africa and Turkey Funds management business to US investment management firm Colony Capital Inc, the companies said on Thursday.
The sale agreement comes after months of turmoil at Abraaj in the wake of its dispute with four of its investors, including the Bill & Melinda Gates Foundation and International Finance Corp. (IFC), over the use of their money in a $1 billion health care fund. The group has denied it misused the funds.
The sale is part of a provisional liquidation and restructuring as set out in a court order. Financial terms of the deal were not disclosed.
Colony Capital has also agreed to oversee, on an interim basis, other Abraaj group funds that are not being acquired so that the group and all its stakeholders have a “comprehensive global solution in place,” the companies said.
The other group funds include the $1 billion health care fund, and some legacy funds of the private equity group.
Sources told Reuters earlier that US buyout firm TPG was in talks with investors in Abraaj’s health care fund to take over management of the assets of the $1 billion fund.
The K-Electric asset, which is being sold in Pakistan and is owned by Abraaj Holdings, is also not part of the transaction.
Colony’s deal comes after other investors such as Cerberus Capital Management had also made offers for the Abraaj business before it filed for provisional liquidation in the Cayman Islands.
A unit of Abu Dhabi Financial Group earlier this week made a conditional offer to buy Abraaj’s management interest in all of its limited partnerships for $50 million, according to a document seen by Reuters.
Since Abraaj’s row with some investors became public early this year, it split its investment management business and holding company, while its founder Arif Naqvi stepped aside from the day-to-day running of its private equity fund unit and the firm halted its investment activities.
Tom Barrack, executive chairman of Colony Capital, said that he hoped that the transaction would enable the process of rebuilding on all sides and also bring an end to the speculation that has swirled around Abraaj over the past months.