While the support systems are in place for Saudisation, there are still several hurdles to be overcome in terms of retaining qualified Saudi Nationals in the hotel sector, says Rosewood’s Peter Finamore based in Riyadh.
A relative newcomer to the Middle East, Canadian hotelier Peter Finamore has quickly got up to speed with local customs and culture in Saudi Arabia, one of the most “welcoming” countries he has worked in.
In his role as managing director of Al Faisaliah Hotel, A Rosewood Hotel and Hotel Al Kozama, A Rosewood Hotel, both in Riyadh, Finamore is responsible for a team of 900 staff, 30% of which, according to current law, must be Saudi Nationals.
The hotels, which are owned by Al Khozama Management Company (AKMC), have so far achieved this ratio but it has by no means been easy.
“The company as a whole has met its Saudisation requirements. We struggle with it to be honest with you — it’s a constant challenge. Everyone in our industry really faces obstacles and these are mainly in relation to the cultural acceptance of Saudis working in service-related industries in general and in particular in the hospitality industry,” says Finamore.
A transition needs to occur in the younger generation, he adds, because, for a start, there are millions of young Saudis needing employment.
According to Finamore, the population of Saudi Nationals in Saudi Arabia is 15.6 million, but 73% of that number is under the age of 30 years.
As a result, the government is dedicated to investing in the development of young Saudis and the recent listing of Saudi Arabia as 13th in the World Bank ‘places to do business’ ranking will no doubt bring in new investment and create new jobs, says Finamore.
In the hotel industry there is already a fund in place to support Saudisation — the Human Resources Development Fund (HRDF). Created from a percentage of the money paid by companies to the government for bringing in foreign workers, “HRDF is a self-funding government reinfusion of cash”, says Finamore. And, although Saudi Nationals earn more than their foreign counterparts, the fund offers great support to hoteliers, he says.
“The HRDF pays 75% of the Saudi employee’s salary during the period of their training and training doesn’t exceed three months,” says Finamore.
“The HRDF also pays 50% of the Saudi employee’s salary during the two-year period following the completion of their training,” he adds.
“This incents employers to work harder to bring in Saudis because it’s more financially expedient to do so,” says Finamore, tellingly adding: “that’s the theory”.
“So far, 200 Saudis have been introduced into this programme in our business and a large number of those 200 have decided not to continue,” he says.
Back to retention
The challenge clearly is keeping Saudis on the training programme. Retention is always an issue for the industry, but where Saudisation is concerned there are several specific reasons for this, says Finamore.
Firstly, as a result of the hotel industry’s great emphasis on training, Saudis joining the hospitality industry suddenly become “very marketable to other industries”.
“The trainees tend to get the training they need from our industry and then opt for careers in other sectors very quickly because they realise they can make a lot more money in areas like banking, plus those industries tend not to be as labour intensive.
“Those industries recruit directly from the hospitality industry. We train people and other industries grab them and this is the revolving door that we face,” laments Finamore.
“There really is a battle for minds. The very best people are in great demand in this country and clearly companies that can pay very high salaries or give other non-cash benefits are very hard to compete with.”