Multinational companies in Saudi Arabia utilize a slightly different set of HR practices compared to their domestic counterparts. According to Alkhater and Alhalwachi (2018), subsidiaries of large international businesses placed importance on rigorous training, which included providing employees with formal instructions, conducting formal apprenticeship for new workers, and learning by imitation. Similar findings were identified by Ramlall, Al-Amri, and Abdulghaffar (2012), who discovered that multinational companies preferred to hire workers temporarily and, based on their performance, make a decision of whether they can be given a regular contract. The researchers also found that increased monetary rewards for increased performance or career advancements were rarely used by multinational companies. Alkhater, Naser, and Allwaif (2019) discovered that multinational companies in Saudi Arabia were particularly interested in the candidates’ previous work experience, professional qualifications, as well as academic attainments. This approach of thorough candidate examination during interviews helps them reduce their turnover.
These practices considerably affect the strategic plan of the HR department because they allow multinationals to achieve success in their sphere. Saudi Arabia has a large number of foreign workers from countries such as India who possess competence and expertise and are ready to work for relatively low wages (Alhamad, 2014). The set of HR practices described in the previous paragraph indicates clearly that multinational companies in Saudi Arabia focus on recruiting skilled employees and additionally subject them to rigorous training. Yet, they do not provide them with any significant remunerations or job advancement prospects. Such practices shape the strategic plan of the HR department to conduct hiring to maximize shareholder value and profits.
Saudi Arabia is known for its cultural norms, which can directly affect multinational organizations’ HR practices. For instance, despite the recent political advancements, women still are not perceived as equal in Saudi Arabia, which impedes females’ authority, especially of those who occupy managerial positions (Siddique, Khan, and Zia, 2016). Thus, HR managers operating in Saudi Arabia must be careful to establish an environment in the company which would welcome diversity and inclusivity.
Reference List
Alhamad, H. S. (2014) ‘The labor market in Saudi Arabia: Foreign workers, unemployment, and minimum wage.’ Inquiries Journal, 6(6), pp. 1–2.
Alkhater, N. S. and Alhalwachi, L. (2018) ‘Development of HRM training practice under Saudi Arabia’s Vision 2030’, International Journal of Academic Research in Business & Social Sciences, 8(9), pp. 1405–1419. doi: 10.6007/IJARBSS/v8-i9/4705.
Alkhater, N. S., Naser, A. M., and Allwaif, M. N. (2019) ‘An analysis of recruitment in domestic and multinational enterprises in the country of Saudi Arabia,’ Journal of Higher Education Service Science and Management, 2(1), pp. 1–20.
Ramlall, S., Al-Amri, H., and Abdulghaffar, N. (2012) ‘Human resource management in Saudi Arabia,’ International Business & Economics Research Journal, 11(10), pp. 1155–1162. doi: 10.19030/iber.v11i10.7261.
Siddique, M., Khan, A., and Zia, K. (2016) ‘The influence of Religion and Culture on HR practices: A Comparative study of Saudi Arabia and Iran,’ Business & Economic Review, 8(2), pp. 35–54. doi: 10.22547/BER/8.2.3.