Reducing the mismatch between the skills a workforce possesses and the work tasks that it needs to perform could add 1.3 percent of additional GDP to Saudi Arabia’s economy, consultants have estimated.
Addressing the mismatch is critical to increasing overall productivity, according to Boston Consulting Group (BCG)’s latest research.
The report shows that the skills mismatch is the key barrier to human capital development in Saudi Arabia – where 50 percent of the workforce don’t realise their working potential in full and their skill set is either insufficient for their work or exceeds its requirements.
The report points to the need for a more human-centric approach to education and employment.
BCG said doing so can enable future talents to be an equal partner to the workforce and fully unlock their potential in the workplace. As a result, this would strengthen productivity, innovation, and even sustainable development in the workplace.
“In a world where more than 1.3 billion people globally work in jobs for which they are either underqualified or overqualified, Saudi Arabia has a tremendous opportunity to address the skills mismatch challenge to bring a significant upside to the kingdom,” said Dr Leila Hoteit, the global leader of BCG’s education, employment, and welfare sector and co-author of the report.
“Our latest research highlights innovative ways of protecting and investing in human capital. Produced through careful analysis, strategic thinking, and partnerships, our new insight underlines the demand for a human-centric approach and the need for education systems to adapt to new market requirements.”
The report highlights that the 20th-century social contract — with its standardised forms of education, non-transparent labour markets and job-for-life expectations — needs to be transformed into a fundamentally new pact that involves employees, employers, the government and the education system.
“While Saudi Arabia has been kindling the entrepreneurial spirit among its youth, more is needed from the kingdom’s business and government to inculcate the needed motivation and accountability in people for their personal development by offering the right incentives and education,” added Hoteit.
BCG proposes three areas of development that will help Saudi Arabia fight the skills mismatch challenge.
* Fundamental Skill Sets: Saudi Arabia’s results on education standard assessments are generally lower than global averages. Governments, businesses, and educational institutions must find ways to help people develop skills that will enable them to perform present-day jobs and jobs that don’t yet exist.
* Human-Focused Environment: The kingdom must aim to provide better working and living conditions, as Saudi Arabia ranks 158th in the Prosperity Index’s Personal Freedom segment. Planners and HR specialists must understand the specific needs, values, and demands of talent, whose knowledge, skills, experiences, and ambitions differ greatly from one generation to another.
* Labour Market Inclusivity: While the kingdom has made significant recent progress on female empowerment with women’s participation in the labor force calculated in 2020 at 30 percent of the total working-age females compared to 21 percent in 2015, there is room for further improvement. Policymakers and business leaders must figure out how to unlock the potential of all kinds of labour in the economy, including older workers and the disabled.
“Global changes and market transformations in Saudi Arabia require flexible education and career models, and adaptive upskilling and lifelong learning programs. Human centricity and personalization should replace rigid standardised systems.” said Maya El Hachem, managing director and partner and also co-author of the report.
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