Saudization: Local Staffing Obligations & Big Pharma’s Saudi Salesforce Overhaul

face
main_img

Historically dependent on oil, Saudi Arabia, like most countries in the Arabian Peninsula, is now investing a large chunk of the sizeable resources obtained from fossil fuels in diversifying its economy. Pharmaceuticals, as one of the strategic sectors in the country’s diversification strategy, has reaped the benefits and the Saudi pharma market stands at over US 10 billion in size. However, in a country where a third of the population are expats and the unemployment rate of Saudi nationals lingers at around 12 percent, the government has sent a clear mandate to pharma companies: hire more Saudis.

 

They call it “Saudization” and, while not unique to the pharma industry, it has forced multinational companies to overhaul their sales operation. The government has set the obligation of having all sales representatives be Saudi nationals by June 2021, a gradual effort that required 40 percent of them be Saudis by the end of 2019 and 80 percent by 2020. Not surprisingly, the decision was met with initial reluctance.

 

“When the government came out with the decision to have 100 percent of medical reps be Saudi nationals, the industry panicked,” senior executive Alaa Gamal told PharmaBoardroom, defending the decision, arguing that it is not unprecedented by any measure. “The nationalization or quotas for Saudi nationals is not new, it has existed in one way or another for over 20 years and it is not unique to Saudi Arabia; the same happens in South Africa, Algeria and other countries.”

 

The nationalization or quotas for Saudi nationals is not new, it has existed in one way or another for over 20 years and it is not unique to Saudi Arabia

Alaa Gamal

 

While it seems like a hurdle for international players, the challenge might be worth it for companies looking to take a piece of the largest pharma market in the Middle East & North Africa (MENA) region. One of the questions from the beginning was simple: are there enough Saudi nationals with the knowledge and training available to fill these positions?

 

“The reality is that to work in the medical field in the country you need to be a pharmacist, which means that they are prepared. It is true that there used to be scarcity in the area, but we now have enough local graduates,” opines Alaa Gamal.

 

Merck’s general manager in the country, Haitham Habashi, agrees: “The whole country is evolving in all directions. Visa requirements have been lowered and women are being granted more opportunities. The push to make our industry more attractive began with developments in education… There are now more than 26 universities training young professionals.”

 

Merck is one of the companies that began working on the Saudization requirement early on. In 2019, the German company’s nationalization percentage was 15 percent and today stands at around 50 percent.

 

But the organization has even gone beyond the requirements, adding Saudi nationals in leadership positions in addition to sales reps; three of the seven people in Merck’s leadership team are Saudis, including the heads of the affiliate’s scientific office, communications, and market access. “Some positions are not required by law; it was our choice. It is important to have people that understand the country’s culture,” says Habashi.

 

The whole country is evolving in all directions. Visa requirements have been lowered and women are being granted more opportunities

Haitham Habashi, Merck

 

Another German company, Bayer, has also been rushing to comply with the regulation, launching a digitally led campaign last year designed to drive the recruitment of Saudi nationals called “Move Forward with Bayer,” with the goal of hiring around 140 more people.

 

Since the measure is part of Vision 2030, the country’s ambitious plan to become an innovation-based economy, Big Pharma had no choice but to adapt, getting creative to approach talent from an early stage.

 

“Our members are doing their best to meet the goals that have been set. I was impressed by the early efforts they made to hire and train Saudi nationals and PhRMA has worked with its members to create an academy that trains Saudi students in pharmacy schools and shows them the opportunities that exist in the private sector,” Samir Khalil, executive director for PhRMA in the Middle East and Africa, told PharmaBoardroom.

 

The efforts, at the end of the day, are not optional. “The regulations are very clear and straightforward about the percentage of Saudi nationals that have to be working there and what the qualifications of those Saudis need to be. Companies should not enter the market without first doing their calculations and working out whether this is feasible for them or not,” said Bandar Reda, CEO of the Arab-British Chamber of Commerce.

Add Your Comment


You must be logged in to post a comment.

Related Content

Latest Report