Importance of Collaborating Employees towards Attainment of Saudi Aramco Company - Research Paper Example

Evaluate the current Talent Management (TM) strategy at any well-known organization in Saudi Arabia Table of Contents Introduction 3 Saudi Aramco- About the Company 4 Talent Management (TM) strategy in Saudi Aramco 5 Driving employee engagement through total reward 7 The Employee Value Proposition 8 Integrated Mentoring Programs to optimise present resources and compete for new resources 8 Effective Communication in the workplace 9 Development Training Program- Preparing High Potential Watch List 10 Evaluation of the Strategy 11 Trends and Challenges 13 Recommendations and Advantages of using a talent management strategy 15 Conclusion 18 Reference 19 Bibliography 21 Introduction The recent war for talent all across the globe has generated universal acceptance of the fact talent management is a critical factor for the success of organisations. Companies have recognised the need for focussing their efforts towards motto like find, grow and keep. These efforts are increasingly being directed towards growth of the companies along with the growth of the individuals. Today the same emphasis is provided by organisations to each phase of an individual employee continuum with the employment of such strategies that identifies high performing employees and providing them with greater opportunities for growth through career planning. Moreover, greater importance has also been generated towards the overall development of employees over long terms and towards their assistance for reaching their career goals and objectives. Organisations have shown their belief towards the development of a fulfilling and happy employee (Mabry, 2001, p.55). This has been achieved through recruitment, on boarding, developing career paths, and development of succession planning. The aim is to develop a happy and satisfied employee who would eventually be able to attain a high customer satisfaction and which would eventually result in adding to the organisation’s bottom line. The above issues have consequently given rise to the requirement for managing talents in organisations. Recently the most crucial people management issue that have been confronting organisations is remaining competitive in the market through the attraction and retention of high quality workers. This has generated the importance of the comprehensive concept of talent management in organisations. Talent management encompasses the complete employee life cycle, starting from recruitment, managing performance, competency development, redeployment, succession planning, training, leanings management, career development, and finally employee retention and engagement (Davis, 2007, p.74). The present project aims to discuss and evaluate the talent management strategy undertaken in Saudi Aramco. It would emphasise on the various ways in which the company has been trying to attract and retain and develop the talents. It also presents an assessment of the effectiveness of the strategy in the present organisational context. The talent management strategy is prescribed for the organisation only after making a thorough study of organisation. It presents such strategies for implementation based on the identified talent gaps. The initiatives would be directed towards retaining the high performers in the core and strategic roles. The most promising challenge confronting the human resource professionals in the organisation would be implementing the strategy successfully. Saudi Aramco- About the Company Saudi Aramco is a state owned oil company in Saudi Arabia which is a completely integrated and global petroleum organisation. The company has evolved as a leader in the production, exploration, shipping, refining, distribution and marketing of petroleum in the world. The company manages reserves of crude oil amounting to 260.1 barrel. The fourth largest gas reserves in the globe, is also managed by the company, which amounts for a volume of 275.2 trillion cubic feet (Saudi Aramco, 2011, p.2). The company is committed to deliver the most reliable supply of petroleum and petroleum products to consumers and communities across the globe. The company has gained the reputation of never failing to deliver to its customers as per its commitments. The company’s attempt to bring forth its spare capacity on stream responding to the demands of the market has proven successful for over a number of years. The company considers its people its most valuable assets. The company’s diverse workforce comprises of 56,000 employees which represent as many as 70 nationalities. It aims to bring together numerous professionals from different technical disciplines for meeting the challenges of the global energy enterprise. One of the key challenges faced by the company is to manage its diverse workforce in order to utilise them to the full potential and maintaining a competitive edge over its competitors (Saudi Aramco, 2011, p.7). Its employees are spread across different offices in different places and regions each gaining the valuable experience from the company and also adding to the company’s benefit. The strength of the company makes talent management all the more relevant and important. The company continues to groom and identify new generations of talents and leadership. Every year, the managers as well as the division heads are also made to apply rigorous assessment mechanisms to identify the high potential individuals. The process also complements Saudi Aramco’s corporate, management and the supervisor assessment centers which are run by the independent experts. The company manages its human resources in its own unique ways and remains considerably successful in producing and retaining the most talented and skilful personnel in the industry (Saudi Aramco, 2011, p.7). Talent Management (TM) strategy in Saudi Aramco “Talent management is not an end in itself” (IBM Global Business Services, 2008, p.5). It does not only cater to the development of individual employees but also involves the creation of succession plans for the same. It seeks to support the overall organisational objectives and aims which essentially results in making money for the business. The IBM Institute for Business Value has recognised the following six dimensions of talent management. Figure 1: Talent Management- The Six Dimensions (Source: IBM Global Business Services, 2008, p.5) Considering its people to be its most valuable assets, the company designs the best possible for attracting talents from the industry, nurture the talent for its development and then retain that talent. The company’s human resource functions are developed after understanding of its role completely and then following it in the direction that provides support to the management and helps in the attainment of the overall objectives of the firm. The company emphasises on the concept of “Saudization” which involves placing the skills of the nation in the right fields which results in the economic growth of the kingdom. Four major concepts are included in the above definition. They are the commitment of the stakeholders, long term investments in the Saudi workforce, development of quality skills and finally the promotion of prosperity of each citizen. The company stresses on performance, reliability and the overall human resource development. It’s will for hard work and excellence contributes towards the development of a best in class corporate culture (Al-Saadoun, 2006, p.1). However, the company has been confronting with talent shortages as more and more companies have been competing to get the best talents. The talent management strategy begins with the attraction of talents in the company. The company aims to provide the best assignments for its candidates. Qualified candidates are encouraged and tempted by the fact that they would work on the best projects available in the industry. The work quality forms an important and crucial aspect for drawing critical talents and those with quality skills and potential. Current policies of the company emphasises on attracting females participation in the workforce. This is because more and more females have been demonstrating economic participation and also been attaining remarkable educational attainment. Females have been demonstrating equal skills, qualification and expertise in the corporate front as men. Reduction of gender biasness have accounted for one of the main strategies for attracting female staff. The company provides fair opportunities of promotion for all. The provision of career opportunities for growth helps to attain employee loyalty and commitment. Driving employee engagement through total reward One of the important steps in the company’s talent management strategy is its employee value proposition which is especially meant for the attraction of critical talents. The strategy emphasises on driving the engagement of employees through the total rewards system. This step has been primarily driven by the economic downturn which affected the engagement of employees in organisations. Employees were hit by the uncertainty and anxiety which reflected in the organisation proceedings due to the downturn. This affected their level of commitment with which they were involved in their job activities. Thus it was apparent and important to develop a total reward system which would motivate the employees during the times of uncertainly and also provide them with the assurance and coverage from the ill effects of the recession. This strategy was chosen as a step to sustain the revenues as the strategy has proved to be especially effective in reaping huge returns in cases of small investments. The Employee Value Proposition In the current business context, organisations have been increasingly resorting to establishing an employee value proposition (EVP). This is primarily meant to define the employee experience or employment deal behind working of the employee in the organisation. It includes branding of the firm for the future employees through demonstrating on what employees get from the organisation (Ulrich & Brockbank, 2005, p.100). This is one of the crucial steps that organisations in Saudi Arabia undertake. Organisations undertaking the step have also shown favourable results by the use of this strategy. It has been helpful in driving business results (ASHRM, 2010, p.13). Integrated Mentoring Programs to optimise present resources and compete for new resources The company has established and maintained a complex network of mentoring, in house training, coaching, and evaluation, administration and certification programs for integrating the different disciplines. This has been especially aimed towards enhancing employee competency and productivity. The program includes setting competency standards for employees in areas of training, evaluation and certification. The process is aimed towards building relationships that maximises the resources in the organisation through standardised and consistent approaches to mentoring (Allen, Finkelstein & Poteet, 2009, p.71). Employees are made to meet up to those standards. In order to facilitate the process, mentoring is provided to the employees. Mentoring is accepted universally as an effective way of enhancing and improving employee morale and optimism and confidence. This is especially applicable for a situation in which employee morale is down due to major shock like the recession or during the times of tight revenues of the company (ASHRM, 2010, p.13). Effective Communication in the workplace People have their own unique style of communicating in the workplace. However, coordinating the different styles and removing hurdled from the communication system seems to be the most important challenge in front of the management of organisations for smooth running of the company. Since Saudi Aramco is an organisation which is placed in diverse locations and its employees represent diverse cultures, the need for collaboration and coordination between the diverse cultures become all the more crucial. The MBTI has presented a “logical framework of personality difference which increases mutual understanding, and enables people to identify and respond positively to others who are unlike themselves” (ASHRM, 2010, p.20). The aim is to facilitate the process of communication by minimising the cost of the organisation (Scott, 2005, p.153). The application of the models so developed has demonstrated effective and dramatic results in the workplace. They have also evolved as popular strategies in the organisations in Saudi Arabia. The effectiveness of the models shows their relevance in the organisational context of Saudi Aramco (ASHRM, 2010, p.20). Development Training Program- Preparing High Potential Watch List The company has increasingly identified the role of front line supervisors and their requirement of training to attain success in their job roles and responsibilities. Saudi Aramco has tried to deliver quality training focussing on their development of people skills, like communication, team building, and problem solving, motivating, counselling and also energizing their subordinate workers. The following figure would reflect the skills required for the managerial and leadership positions. Figure 2: Skills required for the typical managerial and leadership positions (Source: Al-hamdan, 2009, p.4) The training programs aim to provide emphasis on building expertise of the supervisors. Supervisors are required to play the active role of communicating tasks to the subordinate employees, and to control and direct their performance in the direction of achievement of organisational vision and objective. The training programs are also regularly evaluated and monitored in the company (University Microfilms, 2004, p.4530). In this company the training programs are primarily directed in the fields of supply operations, petroleum handling, hazardous material safety and computer applications. The programs have been consistently objected towards contributing to the company with the use of the most enthusiastic and talented professionals. The aim is to make the knowledge base of workers as broad as possible to maximise their contribution to the organisation. Such programs have gained wide spread acceptance in the petroleum industry where workers have been successfully imparted training in fields of quality assurance, administration, bulk fuel handling and finally and also in laboratory operations (McKinney, 1996, p.53). Evaluation of the Strategy One of the most critical aspects confronting the organisation is its changing workforce which bears significant impact on the working of the organisation. The following figure would demonstrate the degree of retirement that would take place in the coming years and the degree of expertise that would be leaving the company. Figure 3: Saudi Aramco- Changing Workforce (Source: Al-hamdan, 2009, p.18) The figure shows that the company would face with a retirement bulge in the years to come. Also, expertise of all age groups would be leaving the company. Also expertise from the high qualified categories leaving the company would also be high. One of the most critical issues in front of Saudi Aramco is selecting the supervisors. One of the crucial issues as part of the talent management strategy is the development of the development of the fine line supervisors as the future leaders in the company. They are faced with the responsibility of day to day leadership, mentoring, coaching of the nun supervisory staff of the organisation. They also act as advocates for the programs and policies of the company. The emphasis is provided in terms of development of leadership skills of candidates through the identification of the high potential employees. Although the company has been supporting the building of leadership talents, and also send candidates to courses known as Operational Excellence Courses, the result has not yet shown significant improvement (Al-hamdan, 2009, p.8). The five competencies which have been stressed on are organisational and business awareness, strategic planning, decision making, problem solving, job knowledge and analytical ability. However, the program structure was not comprehensive and allowed for little advancement in their careers. The programs have shown signs of success only in cases of young supervisors who are trained to gain leadership qualities later in his career. However, much success has not been gained for higher positions like the division heads or the senior managers. The fine line supervisors are trained to manage budgets, review works, ensure technical accuracy, and also analyse programs. They have been successful in communicating the organisation’s vision, lead the changes, and build high performing work teams, and providing mentoring and coaching to the employees. All this has been achieved while coping and confronting with enormous changes and challenges (Al-hamdan, 2009, p.9). Trends and Challenges The most prominent challenge that would be faced by the company is due to the “Saudization” policy, which in other words refers to the replacement of the private sector jobs that are held by the foreign candidates with the Saudi nationals. It is also termed as job localisation. This policy has especially affected the countries like Saudi Arabia which is extensively dependant on the expatriate labour force. Foreign labours comprise of two thirds of the entire workforce in Saudi Arabia. “In the private sector the expatriates found to represent more than 88% of the workforce according to recent report by the Saudi Arabia Monetary Agency (SAMA) in 2006” (Alanezi, 2010, p.6). This has also caused the rate of unemployment in the country to rise rapidly. For a company like Saudi Aramco such a policy would have significant impact because of the fact that the major labour force of the company comprises of foreign nationals. This policy would not only imply a complete restructuring of the company’s human resource structure but also involve huge investments in terms of new recruitments and training and development of the new recruits as well (Alanezi, 2010, p.6). The second most important challenge before the company would also arise due to the above fact. It is evident that not only a major labour force of the company would be foreign expatriates, but also much of the company’s technical expertise would be dependent on them. Saudization would not only mean a change in the technical expertise but also the development of new expertise to replace the old ones. Moreover recruiting the local employees would involve both direct and indirect costs for the company (Alanezi, 2010, p.3). Thus the process of replacing the foreign employees with the national would involve a great deal of talent management initiatives on the part of the company. However, it may be assumed that due to the existence of a large rate of unemployment, there would be no dearth of local employees at low costs. But differences would arise in terms of technical expertise and finding the right talents. This is because the technical skills and expertise would be more efficient in the western nations. Also the availability of labour in foreign nations at lower costs would be easier and more economical. The Kingdom of Saudi Arabia has been increasingly facing challenges out of demographic changes and due to the nature of its system of education. The system of education remains highly skewed towards religious and humanities studies. Moreover, the country having a population of 27 million remains significantly dependant on the oil reserves. Also there are cultural obstacles which have been posing threats to the entry of Saudi nationals in the organisations. There are obstacles for the entry of women in the corporate sector. The large population of men and women are primarily trained in humanities and religious studies. They remain unsuitable for the corporate sector. This is the prime reason for the requirement of an aggressive talent management strategy for the company. It would necessarily imply a reduction in the productivity of employees and the organisation on the whole. The critical factor of career development and training of employees are a few factors which the company would have to look into (CIPD, 2009). Recommendations and Advantages of using a talent management strategy Human resource development has a compelling mission to add to the value of the organisation. It is the responsibility of the HR leaders to formulate and implement institutional strategies which aims to contribute towards the growth of the organisation through enhancement of employee productivity and performance (Butterfield, 2008, p.34). Considering the present conditions of the company, it is recommended that the action plans developed and implemented and should be directly linked to the HR initiatives. The HR departments’ initiatives relating to the management of talent must be to identify the right investments, and design the developments required for the delivering a comprehensive role in the talent management strategy. Since the organisation emphasises greatly on the development of leadership, is crucial that the company makes a complete assessment of the ability of the company to implement decentralised leadership. This would be primarily required for the implementation of the unit based or local action plans for the purpose of unit quality improvement in employee performance (Huber, 2006, p.475). The company must also emphasise more on the measurement of employee performance as part of its talent management strategy. The employees’ career path growth in the organisation must be directed towards its overall contribution in the organisation. Employees’ performance must be regularly evaluated and measured with respect to their responsibilities in the organisation. The plan must also be complimented with allocating the right set of activities to the right candidates. Resource allocation would play a crucial role in this regard (Economist Intelligence Unit, 2007, p.9). The important term worth mentioning in this context is talent mapping. Talent mapping for the employees as well as leadership talent mapping would be an effective way of aligning employee productivity with the long and short term challenges in the organisation (Murphy, 2007, p.186). It is evident that the company is facing problems because of the replacement of foreign skills and expertise with the local nationals. The local nationals happen to be less competent in terms of technical expertise and skills in comparison to their foreign counterparts. This has created a productivity loss arising from the policy of Saudization policy of the government. It is crucial that the company chooses the right talents while recruiting. Firstly it would require a thorough assessment of the strategic direction and focus of the business. Then the company needs evaluating the talent mix which would be required to meet the objectives. In case the right set of talent mix is absent, then the alternative strategy would be to develop and acquire that talent (Economist Intelligence Unit, 2007, p.9). Acquiring and developing the talent would necessarily mean developing a proper and effective training program for the employees and the new recruits in the company. In this case making an assessment of the training needs of employees would be crucial. Considering the present condition of the company, it would require a great deal of technical training for which skilled trainers would be required. It is recommended that the company hires technical experts from the industry for training candidates. The professional trainers could develop questionnaires and hold interviews for assessing the training needs of people. Standard interviews and job analysis would be some of the effective ways of allowing employees to present their views on their own training requirements. Most importantly, performance standards should be set while imparting training to individuals (McConnell, 2003, p.8). Employee Retention is an area in which consistent process would help the human resource departments to identify the key talents, set the retention benchmarks, application of retention strategies and finally evaluate the approached over time. The clear and comprehensively defined process would help the company to determine such characteristics which best defines the critical performers. This would allow managing their development and their engagement and compensation. The HR departments must also be alert to identify the early signs of employee defection. Moreover, they would also have to evaluate the extent to which the various combinations of compensation and incentives would influence the behaviour of employees and retain them. Also an optimum budget should be set for rewarding the employees. In Saudi Aramco, finding talents would not be a difficult task. This is because of the high unemployment rate in the country. However, the education system is not such which would enhance critical and technical skills. Thus these are rare skills and must be compensated as per the industry standards. In fact the company must also devise a rewards and incentive plan for motivating the employees and enhancing their performance. Most the establishment of a development and learning plan for them would be the most effective way of tracking the progress of not only individual employee but employee groups as well (Clark, 2007, p.9). Conclusion While doing the project it was found that demographic changes and the policy of company expansion has been some of the major factors contributing towards the establishment of aggressive talent management strategies in the company. It is evident that the Saudi Aramco employs numerous employees who primarily account for cultural differences and hurdles. Removing such hurdles and collaborating employees towards attainment of company objectives happen to be the most critical challenge confronting the company. The leadership development programs have been one of the major components of the talent management strategy of the company. The emphasis has been provided to the supervisors for attaining leadership skills and for being the future leaders in the company. Another aspect which has gained prominence is the recruitment, development and retention of technical talent and expertise. Due to the process of Saudization, the requirement of technical expertise has become crucial because the foreign expatriates have been replaced by local nationals who are comparatively less competent in terms of technical expertise and skills. This has called for the requirement of extensive training and development programs to develop candidates’ expertise in alignment with company objectives. 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