Rosewood strives for Saudisation
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.”
Secondly, Saudi culture does not perceive the hospitality industry to offer “very socially respected career paths,” he says.
“This is changing, but generally speaking, parents here look down on their children — especially when they have a very good education — when they appear to be subservient to others, foreigners and Saudis alike. So this is a cultural issue that we are not going to change overnight.
“This is distinctively different to Oman and Bahrain — for example, your taxi driver is Bahraini,” he says.
Thirdly, the industry is limited in terms of the specific hotel careers it can attract Saudis to, with front office, reservations, revenue management, accounting and sales and marketing the main fields.
“You will never see a Saudi in the kitchen cooking. You will very rarely see a Saudi in F&B service on the frontline. It’s almost taboo,” he adds.
Gradual change
Despite this, Finamore does predict a change in perception of the industry in the not too distant future.
Interestingly, he likens it to a similar experience in the UK hotel industry.
“In the mid-80s I worked at Hilton Park Lane in London and even at that time the vast majority of young people that we hired to work in F&B service and even front office, were from Germany, Holland, France, Italy etc — we found it very difficult to appeal to young British students.
“Parents were not very encouraged by putting their children through university education and then having them end up working in a hotel, so Saudis are not that dissimilar in respect to their perceptions of the industry they are working in,” he reveals.
“I think that’s going to change and there are a few young people we’ve identified for those areas now who actually enjoy that work. It comes back to peer pressure and what impact their family has on how they are perceived and how they judge themselves. We’re hoping that over time the hospitality industry will become more respected.”
This will be boosted by the College of Archeology and Tourism, part of the King Saud University, which will pump out its first graduates in 2010.
Up until now, Rosewood has worked largely with high school students and community colleges, so the graduates will provide a new level of trainee. Over the summer, for example, Finamore recruited 15 Saudi students from the College for a two-month training course.
“The university programme has identified highly qualified Saudi Nationals. It’s pretty stringent and well received, combining real world training with academic experience, and so we’ve worked with the college to establish the type of training that will enable the students to have a good cross section of understanding, practical and theoretical, in F&B and rooms,” says Finamore.
“The students were very participative. The only thing we encountered is that some had very basic English language competency; this is something that they need to work on and it is detrimental to them. It’s something that the university is aware of and needs to work on more diligently. Overtime, we’ll see the level of education rise and we’ll also see more commitment from the education system in Saudi Arabia to the development of the hospitality industry,” says Finamore.
In addition, to help Rosewood continue to recruit the cream of the crop. he says they work actively to recruit from hotel schools around the world who have GCC students who want to enter the industry in the Middle East.
And with the Saudisation targets expected to grow in time, plus the new hotel rooms expected to come on the market in 2011 and 2012 that will require Saudi staff (Rosewood itself it looking at development throughout the Kingdom) it is vital that every attempt to attract — and keep — Saudis in the sector is made.