“Gauging the unique developmental strategies towards human resource at Saudi Aramco” By: Alexander, Asha. Human Resource Development International. Apr2018, Vol. 21 Issue 2, p150-157. Download the article, read it carefully and answer the following questions in your own words. Avoid plagiarism using Times New Roman (size 12, double-spaced) • Assignment Questions: 1. Highlight the major Training and skill Development Programmes initiated by Saudi Aramco for Human Resource Development 2. Describe Human Resource Strategies of Saudi Aramco. 3. As per the article “Saudi Arabia is facing several challenges in its economy and human resource development (HRD) programmes” What are those main challenges? Identify them and also give your own suggestions to combat these challenges HUMAN RESOURCE DEVELOPMENT INTERNATIONAL, 2018 VOL. 21, NO. 2, 150–157 https://doi.org/10.1080/13678868.2016.1277115 PERSPECTIVES Gauging the unique developmental strategies towards human resource at Saudi Aramco Asha Alexander Department of Business Administration- Female Branch, Jubail University College, Jubail Industrial City, Saudi Arabia ABSTRACT ARTICLE HISTORY Saudi Aramco’s unrivalled upstream oil operations over the years would not have been possible without an unparalleled commitment towards the development of people. The human resource department of Saudi Aramco was successful in creating a healthy and productive environment by shifting the focus from ‘administration’ to being a ‘strategic partner’. The purpose of this paper is to identify and illuminate the human resource developmental strategies that are aligned with core business practices leading to exceptional performance at Saudi Aramco. As an academician, the author believes that this paper will provide an insight into gauging human resource development strategies for any aspiring firm and can be referred for further research. Received 15 March 2016 Accepted 23 December 2016 KEYWORDS Human resource strategy; training; development; Saudi Aramco Excellence at par Saudi Aramco holds the privilege of being a reliable supplier of energy not only to the Kingdom of Saudi Arabia, but also to the entire world. During the course of its 81year history, Saudi Aramco has never failed to meet its commitment to customers for any operational glitches. This untiring focus on operational excellence is based on the three pillars, namely: technology, teamwork, and talent. These strongest competitive advantages allow Saudi Aramco to serve the world with a high level of confidence. Saudi Aramco’s long-standing and proud training heritage and investment in human resource development are viewed as critical success factors in enabling the company to meet its current and emerging business needs. Saudi Aramco’s success over the years would not have been possible without an unparalleled commitment to the development of people. Hydrocarbon resource is of little value without the people who produce, manage, and deliver these resources to the world efficiently and effectively. It is the people that make this company and hence, Aramco has invested in strategic human resource development (SHRD) practices. SHRD focuses on the creation of a learning culture as well as aligning training, development and learning strategies with the corporate strategy (McCracken and Wallace 2000). The objective is to attract and retain talent so that employees remain engaged with emphasis on strategic workforce planning, leadership development and performance management. CONTACT Asha Alexander asha_alexander@outlook.com © 2017 Informa UK Limited, trading as Taylor & Francis Group HUMAN RESOURCE DEVELOPMENT INTERNATIONAL 151 The company has 61,907 employees, of which 51,653 are Saudi and 10,254 are expatriates. The refining capacity (in thousands of barrels per day) worldwide is 5375 and Saudi Aramco’s share is 3104 (SaudiAramco 2014). The training and development history of Saudi Aramco (Saudi Aramco-75 years 2008) reveals that talent development models are constantly evolving to meet the incessant quest of sharpening the new-generation workers’ capabilities and the business needs of the day. The company’s aim is to emphasize the relevance of education in the progressively digital workplace and to make learning an engaging and active process associated with real life. It has been successful in transforming traditional training centres into new learning environments which are supported by blended-learning approaches with various delivery modes and a state-of-the-art learning environment. The purpose of this paper is to study the training and development history, identify the new millennium concurrent skill development programmes and illuminate Aramco’s human resource strategies that align with core business practices leading to exceptional performance at Saudi Aramco. The training and development history The 1930s: The Concession Agreement was signed on May 29, 1933, permitting Saudi Arabia and Standard Oil of California (SoCal) to drill oil in eastern Saudi Arabia. The Saudi nationals were employed in this project and on-the-job training of drilling crews began at Dammam Well No. 1 in November 1935. In March 1938, the discovery of oil in commercial quantities led to increase in SoCal’s workforce in few months who had little or no industry experience from 600 to 3000. The 1940s: Training began to move from the ‘job site’ to the ‘classroom’ called ‘Barasti’. These oil camps have structures made of palm leaf thatch stretched over a frame of mangrove poles. In 1943, the company’s first training organization, ‘The Education Division’, was founded. On April 8, 1944, the Jabal school for Saudi boys under age 18 was opened in Dhahran classified as ‘Education Trainees’. The 1949 Aramco Production Training Programme was the first programme to qualify a large number of Saudis for jobs, then held by expatriates and raised 12,000 Saudi employees from unskilled to skilled or semi-skilled levels in a period of just five years. It was the stepping stone of what became known as the Saudization process. The 1950s: Separate training patterns for Saudi employees were introduced along with an advanced industrial training programme known as General Industrial Training (GIT). On October 1951, the company awarded its first college scholarships in cooperation with Saudi Government to Saudis, so that they can successfully qualify for college entrance. In 1955, Aramco built the first modern, air-conditioned schools called Industrial Training Centres (ITCs). The Training Department established a Saudi development programme in 1956 to identify and oversee the training of Saudi employees with the potential to take over professional and management positions in the future. Aramco television started broadcasting in September 1957 with a third of station’s airtime devoted to teaching academic subjects, particularly English, Math, and Arabic. In 1958, Industrial Training Shops (ITSs) were launched for trainees to learn the mechanical skills needed for such jobs as electrician, repair person, machinist, welder and maintenance mechanic. 152 A. ALEXANDER The 1960s: Aramco produced curriculum materials such as the Aramco English series to cover the first four years of ITC English-language training. Management training for Saudis was actively promoted. From 1965 to 1967, the Training Department produced the Aramco Basic management series, a range of textbooks for supervisory and management training programmes and commenced the management training centre. The 1970s: Enrolment in Aramco training programmes jumped from 1000 to over 13,000 over a year. The company introduced its first Apprenticeship Programme in 1970. The programme was suspended in 1974 due to organizations hiring apprentices as regular employees before they completed the programme. The Curriculum and Test Development Unit (CTDU) was established in 1973 to standardize the ITC curriculum at all levels and in all areas. A special Clerical Training Centre (SCTC) for Saudi females was established in Dhahran in 1976. In 1978, Aramco Job Training Standards (AJTSs) were prepared that became the standard measure of an employee’s training progress. In January 1979, Aramco management formed the Saudi Arab Manpower Committee (SAMCOM) with the agreement of approving policies and programmes for recruitment, training, and retention of Saudi employees. The 1980s: In May 1980, the Career Development Department (CDD) was formed for Saudis in Grade codes 11–14 with programmes such as the Professional Development Program (PDP), and the Professional Development English Program (PDEP). On May 1982, CDD merged with the Training Department to form Training and Career Development (T&CD). Training and Career Development was made responsible for all training programmes. Between late 1983 and early 1984, the company also opened new academic and job skills training centres in Abqaiq, Mubarraz, and Ras Tanura. In 1983, Training and Career Development (T&CD) created the Quality Assurance Unit to determine how effective academic and job skills training programmes were in preparing Saudi employees for their targeted jobs. The College Preparatory Program was launched in 1983 to prepare high-calibre Saudi high school graduates to attend U.S. colleges on company scholarships. In 1986, the company approved the College Degree Programme for Non-Employees (CDPNE) with an objective of hiring them as Aramco employees on successful completion of their college education. In 1988, the Intensive English-language training programme, based on newly defined academic and job skills requirements, was introduced in an attempt to reduce the time needed for language training. The 1990s: As per the government’s direction, in 1993 Saudi Aramco merged with Samarec (the Saudi Arabian Marketing and Refining Company). The company absorbed about 10,000 Samarec employees, Samarec’s refining, and distribution facilities. A new training department, Central Region/Western Region Training Department (CR/WRTD), took responsibility for training ex-Samarec employees. By the end of 1993, there were 1565 former Samarec employees enrolled in Saudi Aramco training programmes. In the same year, a team of evaluators from the prestigious Accrediting Council for Continuing Education & Training (ACCET) evaluated Saudi Aramco’s academic and job skills training programme and described the company’s training standards as ‘superior’. In 1997, training and career development opened a series of Corporate Learning Centres equipped with computers that gave many employees their first hands-on experience. HUMAN RESOURCE DEVELOPMENT INTERNATIONAL 153 By 1999, the company operated 20 Learning Centres and counted 22,000 visitors to the centres as internet became available on desktop computers. In 1998, training and career development (T&CD) launched a training initiative called ‘Transformation 2000’ (T2000) to help the Saudi Aramco workforce adapt to the new digital technology. One of the premises of T2000 was that training programmes would be faster and more cost-effective if employees took greater responsibility for their own learning. This concept became known as self-development. The new millennium concurrent skill development The year 2001, of the new millennium was declared as the year of self-development at Saudi Aramco. The training courses, as well as practice tests were made available to the employees on their office and home computers. Aramco also launched a Contractor Training Programme in May 2002 and created a full-fledged training and career development (T&CD) division for that purpose. That programme was designed to bring the job skills of Saudis working for contractors up to Saudi Aramco standards. In 2004, training and career development (T&CD) entered into ‘partnership’ projects with local vocational and industrial colleges and institutes and adopted Saudi Aramco training standards to prepare Saudi students for jobs with companies in the Kingdom. In May 2005, Saudi Aramco apprentices issued uniforms consisting of a blue shirt with the Saudi Aramco logo on the left side of the chest to instil a sense of unity and pride among the apprentices. In 2006, Saudi Aramco opened the popular College Degree Programme for Non- Employees (CDPNE) to women. In 2007, ACCET extended the accreditation of training and career development’s (T&CD) academic and job skills training programmes for five more years. At the same time, ACCET accredited the SAP (system, application, products in data processing) Training Delivery Division, the Micro Computer Training Unit, and the Staff Development Group for the first time. More than 5000 people visited the 2008 Corporate Training & Development Forum and Exhibition, highlighting the role that training has played in the company’s 75-year history. That same year, T&CD’s Academic Curriculum & Testing Unit (AC&TU) made a major upgrade to the company’s English-language programme. In July 2009, Huda M. Al-Ghoson was named General Manager of T&CD. She became the first woman to head the company’s Training organization. In June 2009, Saudi Aramco and the Technical & Vocational Training Corporation signed a memorandum of understanding to establish the National Industrial Training Institute (NlTl) as an independent not-for-profit institute in the AI-Hasa area. In 2009, the first group of Knowledge Transfer Specialists graduated from the training and career development (T&CD) programme. The Women in Business Programme launched in 2010, accelerated the development of Saudi females in the workforce. The programme gives women tools to excel in the corporate workplace. It received certificates of merit under the best HRD practice category from the globally recognized 43rd World Conference and Exhibition of the International Federation of Training and Development Organizations. In 2010, the impressive new Leadership Centre in Ras Tanura was inaugurated. With a user capacity of 1200, the new centre is nearly five times larger than the 30-year old Leadership Centre and Annex in Dhahran. Over 1000 ITC students entered the 154 A. ALEXANDER Restructured Apprenticeship Programme for Non-Employees (APNE) which addresses selection and screening, programme content, instructional delivery, policies, guidelines, and assessment, as well as all components of the training programmes. When leadership is strongly engaged and committed to developing and implementing people management practices then such a relationship can positively influence organizational performance (Alagaraja and Egan 2013).The Global Risk Awards recognized the ‘Leadership and Human Resource’ at Saudi Aramco in February 2014 with the ‘Commitment to Learning and Development’ award, which recognizes companies for their commitment to improving enterprise- wide risk management practices. Organizational performance is affected by the combined effect of leadership and people management practices. McLean (2004) suggested that the field of human resource development (HRD) should extend beyond organizational boundaries to have larger societal and even national impact. There is certainly no doubt that Aramco’s initiatives have contributed to national human resource development (NHRD) in the Kingdom of Saudi Arabia. The Aramco’s human resource (HR) strategy Scholars and practitioners have recognized the critical role that HRD can play in helping organizations identify and combat challenges (Tseng and McLean 2008). An analysis of human resource development trends facing Saudi Arabia highlights the challenges of human capital in the Gulf Arab countries in general and Saudi Arabia in particular (Mustapha 2009). Saudi Arabia is facing several challenges in its economy and human resource development (HRD) programmes. The main challenges are high dependence on oil, petrochemical industry and foreign labour, low rate of female employment, weak link between educational system output and the needs of the economic sectors and the changing expectations of the young generation. The young generation is characterized as ambitious, demanding, outspoken, and confident. They want to be associated with leading companies, respected brand, strong work ethics, diversity and social responsibility and consistent performance record. They also want a work environment that is empowering, rewarding and values creativity and diversity. Studies on strategic management of human capital in the energy sector (Mercer 2012) depicts that business cannot just give lip service to the notion that human capital is their greatest asset. They need to manage workforces as the lasting source of competitive advantage. One strategy for rapid transformation of Saudi Arabia is leveraging of intellectual capital and knowledge management (Bazuhair, Khan, and Khursani 2011). Aramco’s HR strategy reflects the vision of the company’s transformation programme. It is based on three viewpoints: business strategy, market trend and internal assessment of organizational health. It is important that HR functional strategies in areas of recruitment, training, and development, leadership and engagement are supportive of the overall business strategy and consistent between themselves. HR functions in organizations are key drivers of organizational strategy. HRD partnerships increase organizational performance in specific ways such as collaboration, information sharing and partnering with key stakeholders to meet business objectives (Alagaraja 2013). At the core of the Aramco’s strategy is corporate HR vision to create people advantage for Saudi Aramco by keeping the demands of prospective talent into HUMAN RESOURCE DEVELOPMENT INTERNATIONAL 155 consideration. They have identified workforce planning, performance management and leadership development as high-priority action areas to address over the 2014–2016 business plan. Work force planning Aramco created a company that employees are proud to work for and to be associated with which makes them a popular employer of choice. For a company that spans such a vast scope of responsibility, ensuring the constant availability of a talented workforce to support its operations requires systematic workforce planning methods, investments in education and training, and expansive talent mobility programmes. The workforce model helps to get a clear picture of the number of fully qualified employees each business line needs annually and to project the needs in the next 5 or 10 years (Change board 2015).The recruitment strategy is maintained by a workforce planning model that assesses internal and external talent supplies, forecasts talent needs, anticipates knowledge gaps, identifies effective strategies to close critical talent gaps and develops talent in critical areas. To ensure diversity among the talent, it maintains approximately 85% Saudization level as their goal. Expatriate employees are always needed for knowledge transfer and to fill gaps in critical industry skills. Women’s recruitment has increased by approximately 20% over the past few years. Saudi Aramco works closely with the government of Saudi Arabia and key academic institutions to secure a steady flow of talent in the company and also throughout the country (World Economic Forum 2012). To confirm that training is meeting expected standards and graduates find appropriate places to study, Aramco has affiliated itself with about 32 universities in the world. Aramco spends $1.2 billion annually on developing and training staff, scholarships, and on operation of 25 training centres and leadership programmes. 60% of the Saudi Arabia, population is under the age of 35 comprising of a deep talent pool in the Kingdom. In the year 2016, the challenge is about dealing with the existing 65,000 employees and identifying 400 fresh graduates for a 10-month crash-course before they pursue admissions to the world’s top universities. As a part of strategic workforce planning, the human resource department at Aramco ensures that an additional 6000 students complete vocational training annually of which 40% are female students. Aramco is certainly doing more than many other Saudi firms in terms of employing women. The training and development strategy is considered as an attraction and retention factor. Aramco has an extensive range of development programmes for employees at all levels. Rigorous assessments are conducted annually to identify the development gaps that are then addressed by targeted development programmes and field assignments in and out of Saudi Arabia. The career development programmes provide prospects for personal and professional development to every employee throughout their employment life cycle with the company – from recruitment to retirement. Employees are trained from day one to be in the driving seat of their professional growth. The corporate culture is well-defined by a culture of meritocracy and accountability. Career advancement is certain for those who contribute the most and add value to the organization. The training programmes aim to develop technical expertise as well as soft skills such as critical thinking, teamwork, communication, and problem-solving (The HR Observer 2015). 156 A. ALEXANDER Performance management and leadership development A major challenge at Aramco is ensuring a solid pipeline of leaders and talent with the required skills to support current and future business and to have a highly diverse workforce with their own aspirations and values (Change board 2014). Implementing performance management systems enables Aramco to evaluate and reward employees appropriately and select leaders based on performance-based criteria. They recognize, celebrate, and appreciate diversity to unlock the cultural and intellectual richness they have at disposal. Performance is assessed against targets related to the number, quality, and category of recruits. To assess quality, different measurements are used, including psychometric tests, proponent surveys and impact on business performance. Aramco’s present HR head is a woman. This projects a positive image of gender equity to potential employees and is a reflection of the corporate philosophy of promoting on the basis of talent. The first Saudi female joined in 1964 and today, 84 women hold leadership positions in Aramco (Forbes middle east 2014). Constructing the leadership bench in Saudi Aramco includes the process of identification, assessment, development and selection of people. The high-potential development process is used to identify prospective employees. They are then directed to assessment centres based on leadership competency models. Individual development plans are considered to build employees’ knowledge, experience, and skills. Employees’ progress and potential are traced on a regular basis by top management. Selection is determined through a formal succession planning process that is revised annually by senior management committees. The leadership development structure follows the ‘70, 20, 10’ model, with 70% of development taking place through structured rotational assignments and internal mobility; 20% through coaching, mentoring and performance management; and 10% through formal classroom programmes (Lombardo and Eichinger. 2000). Aramco realizes that employee engagement depends on a challenging, and rewarding workplace. Aramco regularly surveys employees to monitor organizational health, identify the gaps in meeting high standards and develop strategies to address these gaps. Human resource department at Aramco attracts, retains and manages talent that plays an enormous role in Aramco’s ambitious 2020 vision – to become the world’s leading integrated energy and chemicals company during the sustainable and diversified expansion of the Kingdom’s economy. Conclusion The HR strategies at Saudi Aramco create the real basis for its sustainable competitive advantage. Talent development is not only the central element in their business strategy but it is also considered the top most priority of its business goals, along with profit maximization and sustainability of supply. The development and utilization of talent and strength of human resource capabilities that drives performance to new production heights is what differentiates them from its competitors. Human capital constitutes the actual source for prosperity which eventually originates from the minds, hearts, and hands of its human resource. HUMAN RESOURCE DEVELOPMENT INTERNATIONAL 157 Disclosure statement No potential conflict of interest was reported by the author. References Alagaraja, M. 2013. “Mobilizing Organizational Alignment through Strategic Human Resource Development.” Human Resource Development International 6 (1): 74–93. doi:10.1080/ 13678868.2012.740794. 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