The Effect of Talent Management in Saudi Oil and Gas MNCs: Strategies and Challenges ()
1. Introduction
Countries and industrial sectors worldwide are experiencing a talent shortage despite the increased number of individuals seeking work. It is, therefore, a priority to identify, recruit, develop and retain skilled talent. Multinational corporations (MNCs) in the oil and gas (O & G) industry have increasingly utilised data analytics to manage top talent (Deloitte Center for Energy Solutions, 2013). The Human Resource (HR) leaders in O & G companies use analytical data to shape their approaches to talent management. At the present time, the industry faces several challenges, including attracting and retaining top talent, managing cost escalation, and complying with new and stricter regulations (Yusof at al., 2023). Implementing the proposed centralised data analytics approach has significantly improved talent competency management within the O & G industry (Yusof et al., 2023).
Accordingly, the faster pace of the modern corporate environment means acquiring and retaining talent is increasingly difficult, with companies, including MNCs, finding it more and more challenging to recruit the right people to fill vacancies. To effectively manage talent in an operational environment characterised by constant rapid change, HR departments must act strategically to increase employee engagement and performance, using Talent Management (TM) as an essential tool. Effective TM encompasses the entire employee lifecycle, from recruitment to offboarding, and is essential for an organisation’s long-term success. In addition, TM strategies can enhance employee engagement and commitment, resulting in increased individual and organisational performance (Hongal & Kinange, 2020) and improving competitive advantage.
Further, recruiting high-quality people facilitates a successful TM approach increasing efficiency and effectiveness in achieving organisational objectives. Thus, TM is critically important to MNCs yet its practical implementation can be quite challenging (Vaiman et al., 2012). The approaches through which organisations hire talent are known as internal and external, referring to their differing focus (Maqueira et al., 2019). Multinational companies tend to hire top talent from outside their organisation when necessary (Ambrosius, 2018; Clarke & Scurry, 2020; Newell, 2005). However, in the private sector employers may choose to fill vacancies internally with superior performers from the existing talent pool before seeking outside candidates (Asplund, 2020; Snyder et al., 2021).
Furthermore, organisations across the board must have a solid recruitment process to identify the best talent and reduce turnover. A systematic approach ensures the right candidates with the necessary skills, experience, and qualifications are selected. Moreover, adopting a recruitment strategy aligned with business goals and values helps to attract and retain the right talent for organisational success. The retention of talent is a critical practice that is closely tied to engagement and compensation strategies, two of the aspects of performance management (PM) that can be incorporated into organisational performance.
The strategies prepared in advance by effective PM play a pivotal role in the success of MNCs. Once in place, novel PM methods or trends support the company in achieving competitive advantage, particularly operational capabilities surrounding managing and improving organisational performance (Yosie & Herbst, 1998). The success of MNCs can be influenced by government regulations that provide a high level of procedural support, which helps to improve their capabilities (Haufler, 2001). However, such regulations can also create ongoing dependency and pose challenges due to cultural and legal differences in various countries around the world. These challenges may require a managed response and can compromise the performance of the MNC.
In consideration of the current globalisation trends and international attempts to improve economic conditions, MNCs are seeking to implement TM as a development strategy to prepare for future challenges. These challenges could include the difficulty of retaining top talent in a competitive market, the need to adapt to diverse cultural norms and regulations in different countries, and the complexity of managing a global workforce. In addition, this strategic initiative is anticipated to build a sense of sustainability through the competencies of their employees, in order to enhance organisational performance. Elaborating on the impact of these measures (Mathew, 2015; Minbaeva & Collings, 2013) is of paramount importance in the context of the rising global competition and the need for MNCs to maintain a competitive edge. When TM is effectively implemented, it can develop unique competencies, easing the burdens of cross-border business challenges and leading to sustainable competitive advantage (Kabwe & Okorie, 2019). The challenges associated with managing talent on a global scale are more significant than those faced by organisations operating on a domestic scale (Minbaeva & Collings, 2013). This is because a number of key myths regarding talent management may undermine talent management’s contribution to multinational corporation effectiveness and retard the development of management practice in this regard (Minbaeva & Collings, 2013). To address these issues, MNCs must adopt a more strategic and systematic approach to talent management.
Consequently, it is important to clarify the basic concepts of TM and understand how it is employed by various organisational stakeholders in their everyday activities and interactions (McDonnell & Wiblen, 2021; McDonnell & Wiblen, 2020). Despite widespread use of the terms, there are no universally accepted definitions of talent and TM, with differences between both theoretical and conceptual academic definitions (Collings & Mellahi, 2009; Sparrow et al., 2014). As referred to by Nijs et al. (2014), “talent” is the systematically developed innate abilities that enable people to excel in one or more domain of human performance. Such employees appear to be operationalised to outperform others of the same age or experience, thus performing consistently at their highest level. Referring to McKinsey & Company, Michaels et al. (2001: p. xii) define it as “the sum of an individual’s abilities, their intrinsic gifts, skills, knowledge, experience, intelligence, judgement, attitude, character and drive”. Additionally, Collings and Mellahi (2009: pp. 143-144) define strategic TM as “constructing a human resource architecture that facilitates filling high potential roles with competent incumbents and ensuring their continued commitment to the organisation by identifying and developing a talent pool”. Further, Abdul-Kareem (2016) defines TM as the process of ensuring that companies have the most suitable types and numbers of employees in the right places to meet current and future business needs.
Within the field, there are disputes concerning the necessity of covering the conceptual arena of TM (Sparrow et al., 2014; Thunnissen et al., 2013). Furthermore, questions exist surrounding the utility of this approach, but it is widely agreed that a lack of effectiveness in managing the talent in an organisation may stem from an inadequate understanding of TM (Cappelli, 2008; Collings et al., 2007; Scullion & Collings, 2011; Sparrow et al., 2004). Academic opinion coalesces around a number of specific terms and concepts with regard to talent and TM despite the lack of explicit agreement on definitions (Ashton & Morton, 2005; Collings & Mellahi, 2009; Lewis & Heckman, 2006). However, problems persist around inconsistent clarifications and vague interpretations of a variety of aspects of TM (Thunnissen & Gallardo-Gallardo, 2019). This study is driven by the extensive literature on talent management spanning over a decade. It aims to explore TM’s strategic approach from various perspectives in the context of Saudi Arabia, through a literature-based analysis. These perspectives include TM strategies, both internal and external approaches, challenges in its implementation, and the impact on enhancing performance within Saudi Arabian organisations. The study will focus on internal and external talent management strategies, implementation challenges, and enhancing performance in Saudi Arabian organisations. The goal is to make theoretical and practical contributions, and the strategic approach seeks to provide guidance for talent management practices within MNCs.
Since research in this field tends to explore the strategic approaches of TM, the concerns of the kind described in this section are subject to, and can be mitigated by, the strategies and practices implemented by organisations operating the O & G sector. In order to gain a deeper understanding of these strategies and practices, the following sections will examine them in detail, extending the talent management literature and forming a major part of this review. This examination aims to provide a comprehensive understanding of how O & G organisations can effectively face challenges related to TM through the implementation of effective strategies and practices.
The focuses are twofold: to identify optimal approaches that align talent strategies with the industry’s evolving demands, and to illuminate the cultural and contextual factors that influence the effectiveness of these strategies. The significance of this research lies in its potential to offer insights that can guide the development of effective talent management practices, thereby enhancing organisational performance and achieving long-term success in the Saudi Arabian oil and gas industry. In doing so, the study responds to the call for a deeper understanding of how talent management strategies can be optimised in a sector that is not only vital to the global economy but also undergoing a rapid transformation. The study is guided by the following objectives:
1) To determine the effectiveness of strategic talent management practices in the oil and gas companies operating in Saudi Arabia over a ten-year period (2013-2023).
2) To ascertain the perspectives of employees (senior and middle managers) on talent management among oil and gas companies in Saudi Arabia.
3) To identify the challenges faced by oil and gas companies in implementing talent management practices in Saudi Arabia.
2. Literature Review
The growth and development of MNCs are highly dependent on their human resources being of the highest quality, as well as their level of sustainability (Jabbour, 2013). This is attested to by research revealing significant growth in TM best practices in MNCs (Cappelli, 2008; Collings et al., 2014; Morley et al., 2015; Scullion et al., 2010). However, the conceptual and intellectual aspect of TM in academia remains limited to proving its presence, with little explicit agreement on its use as a strategic tool until recently (Collings & Mellahi, 2009; Scullion et al., 2016). For a position to be categorised as strategic, Huselid et al. (2005) note that it must meet both high variabilities in incumbents’ performance and have a direct strategic impact. Collings (2014) further argues that studies into TM should extend into different contexts and environments in order to broaden into a multi-stakeholder perspective.
Additionally, talent development, another aspect of TM investigated by Huang and Tansley (2012) in a study among executives, includes two forms of strategies: “extended projects” and “geographical mobility”. The first of these refers to activities which direct toward the strategic responsibilities of the individual rather than the day-to-day activities. The second relates to developing a cultural sense by examining the potential of the talented to work at higher levels. Further, Cappelli & Keller (2014) note that increasingly scarce resources mean talent must be managed to its fullest potential, with organisations strategically focusing on retaining talent and developing successors. Furthermore, Groysberg (2010) observes that individuals considered to be most talented might not necessarily perform at the same level when offered higher salaries elsewhere. Therefore, it may be costly to buy high performers consciously in one context but not in another. Thunnissen et al. (2013) found that most research has examined the impact of TM on ongoing developments, changing trends in the labour market, and the availability of human capital in moments of supply and demand while neglecting other aspects, such as the impact of competition and institutional mechanisms, which have yet to be explored. Iles et al. (2010) indicate that adopting an “organisational competence” model is linked to focusing more on developing and promoting talent rather than just attracting and retaining talent. The existing research makes it clear that TM in large organisations uses many of the above approaches to identify strategic roles and key positions (Cappelli & Keller, 2014; Cascio & Boudreau, 2016; Collings et al., 2015).
Moreover, Gallardo-Gallardo et al. (2013) classify talent into two categories: the object and subject approaches. Talent viewed through the object-oriented perspective includes natural ability, mastery, commitment and fit, while talent from the subject-oriented approach focuses on individuals and can be inclusive or exclusive. Khoreva & Kostanek (2019) argue in favour of the objective approach to TM in MNCs, which emphasises the belief that talent is both exclusive and developable; due to intense competition and limited supply, leaders tend to keep employees’ talent pool status confidential. For example, a clear distinction between MNCs and small-medium enterprises (SMEs) can be found in their TM practices. More than half of surveys investigating German SMEs have shown that they adopt an inclusive approach to managing talent practices and activities among employees (Festing et al., 2013). However, MNCs tend to follow an exclusive approach, dealing with groups of contributing, high-performing or potential employees (Collings & Mellahi, 2009; Schuler et al., 2011b). Therefore, it may be the case that TM and HRM measures are not identical in MNCs.
As referenced in the existing literature, a variety of philosophies represent the strategic perspectives of TM. For example, Collings & Mellahi (2009) suggest these TM attributes: 1) Categorise people through TM; 2) TM referred to as the presence of key HRM practices; 3) Position approach (identifying key positions as an indicator of TM), and 4) Strategic pooling (TM as an internal talent pool and succession planning). Additional research shows that MNCs are unable to manage talent effectively due to the lack of cultural diversity approaches and misalignment between TM and business strategies (Al Ariss et al., 2014; Mellahi & Collings, 2010). Nevertheless, according to Sparrow et al. (2014), TM always relates to strategy across all organisations, while Aljbour et al. (2021) report that organisational performance is cited most prominently as an outcome of TM in reviewed 68 studies.
Further, Beechler and Woodward (2009) describe four factors influencing the competition for talent and the characteristics of talent. The authors posit that these aspects are: global demographic and economic trends; growing mobility of individuals and organisations; transforming business environments, skills, and cultures, and increased diversity of the workforce. An additional view of TM is that it is impacted by demographic shifts, global supply chains, increasing global mobility, and ageing workers (Singh et al., 2014). However, this study focuses on how the TM strategic approach influences higher organisational performance in the structure of a labour market or culture (Tarique & Schuler, 2010). In the O & G industry, addressing workforce-related challenges is crucial since this ensures an intense work environment, an influential talent culture, and strong HR practices (Kanason, 2018). Talent management’s value goes beyond HR processes and functional terms. Bundling these practices together has the potential to redefine organisational roles. According to Makram et al. (2017), this broader strategic narrative creates new perspectives and possibilities for the role of talent management within organisations.
Accordingly, a TM approach can be implemented and operationalised in different ways depending on its underlying strategic perspectives or dimensions, so the same practice can result in varied actions and outcomes (Blass, 2009). For example, Blass (2009) considers six strategic perspectives: process, HR planning, culture, competitive, change management, and developmental. As noted by Farley (2005) a process perspective entails the entire process of maximising people within an organisation, while from the cultural perspective TM is a mindset (Creelman, 2004) which requires belief that in order to succeed, talent is required (Michaels et al., 2001). A competitive perspective is one which holds that TM is about identifying the best possible individuals, discovering what they want, and providing them with it, as if one organisation does not supply it, their competitors will (Woodruffe, 1999). Developmental perspectives propose that TM aims to accelerate the development of employees to unlock their greatest potential (Wilcox, 2016), while HR planning perspectives claim TM exists to match the right people to the right jobs at the right time (Mucha, 2004). The final perspective considered here involves change management, which uses TM as a means of driving organisational change, integrating the TM system into the more comprehensive strategic HR initiative for organisational change (Lawler Iii, 2005).
According to the literature examined in this study, beliefs and practices regarding TM in organisations vary, however, there are common threads which they tend to apply when make decisions. Several studies have identified practices for attracting (Farndale & Atli, 2019), identifying (Banks & Kepes, 2015), developing (Alcover et al., 2017; Oseghale et al., 2018), and retaining (Isa et al., 2018; Tlaiss et al., 2017) talent. Authors who specifically addressed motivation and empowerment include, Rani and Kumar, 2018, and Siddiqui and Bisaria, 2018. Research has also identified the dimensions organisations analyse in order to contribute to talent identification, development, TM structure, systems and processes (Blass, 2009). Talent dimensions to define and identify individuals include the size of the talent pool, entry criteria, the decision process, permanency of definition, recruitment as a source of talent, and transparency.
In terms of developing talent, the dimensions include development path, focus, support, influence on career, connected conversations, organisational values, and level of risk. Moreover, Glaister et al. (2018) suggest that organisations in emerging markets should develop robust talent management practices focused on workforce networks and social capital that address local challenges and leverage available opportunities to enhance performance. Lastly, regarding the structures and systems which support TM, the operational dimensions contain performance management, TM processes, use of technology, systems flexibility, and ownership of talent. Schleicher et al. (2018) argue that PM systems must adapt to changing environments, including the evolving talent landscape, to remain effective.
Effective recruitment and selection practices are vital for firm’s success in the oil and gas industry, influencing labor productivity, product quality, innovation, and customer satisfaction (Saddam & Abu Mansor, 2015). These practices, aligned with strategic HR due diligence, address the industry’s unique talent needs, including challenges such as an ageing workforce and global talent competition (Dordan, 2014). Employer branding and cultural fit play significant roles in attracting and selecting global talent (Dirani et al., 2018), emphasising the need for strategic approaches to talent management that consider the industry’s unique context and requirements.
In the dynamic and globally significant oil and gas sector of Saudi Arabia—a linchpin in the global energy market—the strategic management of talent assumes an even more critical role. The industry’s unique challenges, including the management of a diverse and often expatriate workforce, the necessity for specialised technical skills, and the imperative to adapt to rapid technological and market changes, underscore the need for effective talent management strategies. Ahmed et al. (2019) and Suleman & Zaato (2021) emphasise the importance of tailoring talent management strategies to the industry’s unique context, characterised by its reliance on expatriate employees and the need for specialised technical skills. This review underscores the intricate nature of talent management research in emerging economies, providing a valuable foundation for exploring its complexities within multinational corporations (Battisti et al., 2023).
The Kingdom of Saudi Arabia, with its vast oil reserves and pivotal role in the global energy sector, faces the dual challenge of sustaining its leadership position while navigating the complexities of talent management in a rapidly evolving industry. The strategic approach to talent management in this context is not merely a human resource initiative but a critical business strategy aimed at ensuring organisational resilience, adaptability, and sustained performance. Al Ruwaili et al. (2013) and Al-Oumi & Doubi (2021) recognise the impact of talent management on organisational performance, highlighting strategies that emphasise development and motivation to boost strategic performance.
Investing in employee development is crucial for enhancing performance management and ensuring the retention of valuable talent (Moheb-Alizadeh & Handfield, 2017; Kabwe & Tripathi, 2020). Further, strategies such as promoting training, improving the work environment (Alferaih et al., 2018), and prioritising diverse talents (Anlesinya & Amponsah-Tawiah, 2020) are essential for developing a resilient and adaptable workforce. Furthermore, job rotation and global assignments serve as effective tools for multinational corporations to develop talent and prepare employees for strategic roles (Collings & Isichei, 2018; Al Aina & Atan, 2020). Moreover, retention strategies, including offering generous financial packages and integrating reward systems, play a critical role in minimising employee loss and attracting foreign talent (Chadwick et al., 2015; Dirani et al., 2018; Sidani & Al Ariss, 2014). The strategic focus on talent retention and successor development is essential for organisations to navigate the challenges of increasingly scarce resources (Cappelli & Keller, 2014).
From the above aspects and perspectives, TM should be viewed as a strategic or system-level function, rather than an individually based responsibility (Jones et al., 2012). A strategic approach is necessary as talent management and development practices present numerous challenges (Dirani et al., 2018). In order to do so, strategic approaches in TM should be divided into internal and external. Internal approaches relate to those strategies which deal with talent that is already within the organisation and that needs to be identified or developed, while external approaches refer to those which involve outsourcing or recruiting talent from outside the organisation. The following sections elucidate the most common practices for strategising within the MNCs.
2.1. Talent Management Internal Strategic Approach
Organisations which adopt internal approaches to TM tend to engage the following steps: talent identification, talent training and development, and talent positioning and pooling. The first of these steps constitutes a vital process in the TM system which aims to create a pool of high-performing or high-potential employees to fill key positions essential to achieving the organisation’s strategic objectives (Collings & Mellahi, 2009; Sanjeev & Singh, 2017). Further, Breaugh (2008) notes that employers identify these individuals through the recruitment process by attracting their attention and encouraging them to apply for job openings, ensuring that the interest of the target talent is maintained until they are formally offered a job. Talent recruitment is further viewed as recruiting effective human capital, and forming the knowledge base around which organisations build their strategies (Lepak & Snell, 2002). According to Krishnan and Scullion (2017), the size of an organisation is relevant to identifying talent, and it occurs globally, with some organisations’ initiatives focusing specifically on talent interested in working internationally (Tarique & Schuler, 2010).
Subsequently, the second step relates to training inside the organisations. It has been suggested that the value of employee skills within firms varies depending on how and where they are used (Becker & Huselid, 2006). For example, as the O & G industry changes rapidly, practitioners need to improve their talent and skills to ensure they can adapt and support companies in meeting their objectives (Friday & Sunday, 2019). As stated by Thunnissen (2016), developing employees and building a talent pool for internal recruitment is essential, while Lepak and Snell (1999) previously defined internal development as a programme that emphasises training, education, and other skill-building activities for talented employees.
Finally, the third step for utilising internal sources of talent is the creation of a talent pool, since existing employees know the company culture and how the business operates (Collings & Mellahi, 2009) and can therefore be integrated immediately into new roles or positions (Lyria et al., 2017). Work performance and goal or skill achievement assessments can be included in talent selection strategies (Przytula, 2014) to fill vacant positions from the talent pool (Thunnissen, 2016). Exploring the exclusivity and inclusivity of internal TM can illuminate an organisation’s strategic orientation, employee practices, and the talent pool’s focus.
2.2. Talent Management External Strategic Approach
In cases where an organisation intends to change, renew or reorganise its culture, an additional source of talent is recruiting from the employment market (Ballesteros Rodriguez & de la Fuente Escobar, 2010; Mangusho et al., 2015); a common TM strategy for many companies (Cappelli & Keller, 2014). For example, as reported by Wilson (2021), a number of external candidates have been hired by BP to fill senior roles involved in their transition to renewable energy, including Anja-Isabel Dotzenrath, the former chief executive of RWE Renewables who has been leading BPs gas and low-carbon business since March 2022. Sufficiently skilled and knowledgeable individuals are becoming increasingly hard to find, however, recent technological advances such as online recruitment and artificial intelligence (AI) now facilitate talent recruitment and its processes (Cook, 2016). To target talent groups from the external labour market, TM practitioners can adopt a number of creative selection strategies, including targeting individual profiles on social networks such as LinkedIn and Myspace (Ibeh & Debrah, 2011; Rashid, 2010). Companies may also recruit from outside to fill strategic positions at the top of the organisation through executive search firms, which typically involves recruiting from competitors. The selection process should ensure talented candidates are subject to analysis, evaluated through assessment centres, interviewed by managers and tested psychologically, including, for example, personality testing (Cook, 2016), as well as talent gamification practice (Tansley et al., 2016; Lowman, 2016).
Correspondingly, when an organisation suffers a talent shortage, it is likely to recognise the need to buy the right talent and experience to fill pivotal positions. The demands of the modern workplace require fresh graduates to reach the necessary standards in order to accomplish the desired results (McCracken et al., 2016), which entails considerable time and expense. Due to these time and resource constraints, many organisations prioritise employing talented individuals who are already equipped with the skills and experience that can be actioned immediately within the organisation (Cappelli, 2008). In addition, McCracken et al. (2016) recommend that TM practitioners adopt selective recruitment strategies to ensure that employees can deliver results and accomplish the organisation’s goals, the latter of which are constantly refined to align with recruitment standards, resulting in an exclusive approach.
Finally, a study by Brock and Von Wangenheim (2019) suggests adopting a dual-sourcing strategic approach in which managers develop the technical skill base necessary to ensure the efficient and practical application of AI technologies. This means utilising existing internal skills while also sourcing outside talent. Related to this, a significant study by CIPD (2022) indicates that above half of all employees’ ability to use technology is limited in the recruitment process, either by inadequate skills and knowledge, or resources within their organisation. In addition to the need for greater awareness of the importance and attraction of the O & G industry, people’s interest in science and technology is declining, which comes with a high level of risk for the industry (Kumari & Bahuguna, 2012). Although the private sector is accustomed to filling vacancies from within the organisation before searching externally (Newell, 2005), by taking this hybrid approach, managers acknowledge that the best talent often comes from outside a company (Brock & Von Wangenheim, 2019). This is particularly the case when employees capable of undertaking tasks beyond their essential functions are sought (Asplund, 2020). Indeed, it is not uncommon to appoint talented individuals based on a broad range of characteristics (Silzer & Church, 2009). Therefore, the literature surrounding the various TM practices must be explored in terms of what MNCs adopt to attract, develop and retain highly skilled employees in their drive for long-term success. Most of these practices and strategies, pertain to TM, solidifying the relationship between the two main branches of focus in this research: TM and organisational performance.
2.3. Talent Management and Emerging Context (Saudi Arabia)
Multiple gaps in the research regarding TM have been identified, as shown in Table 1. For example, there is an insufficient understanding of TM (Ashton & Morton, 2005; Lewis & Heckman, 2006; Collings & Mellahi, 2009; Isa et al., 2018; Collings et al., 2022). Further, a range of authors mention that there remain inadequate empirical studies (Marinakou & Giousmpasoglou, 2019; Al Nsour & Tayeh, 2018; Latukha, 2018; Ott & Michailova, 2018) regarding how TM impacts organisational outcomes (Sharma & Bhatnagar 2017; Sheehan & Anderson, 2015; Mensah & Bawole 2018), cultures and innovations (Kaliprasad, 2006b; Armstrong, 2010; Bussin & Van Rooy, 2014; Choi et al., 2018; Kontoghiorghes, 2016), and HR leadership (Ulrich et al., 2012; Cappelli, 2008; Kaliprasad, 2006a; Boudreau & Ramstad, 2002). In addition, there is a lack of effective TM implementation systems (Langenegger et al., 2011; Sharma & Bhatnagar, 2017). However, Saudi Arabia, which is an integral part of the global economy in various areas, has been viewed as an appropriate location for empirical research (Al-Asfour & Khan, 2014).
One of the most critical factors for selecting Saudi Arabia as a research subject is the constructive developments that have been made there in TM-related industries (Alamri, 2015), thus prompting our decision to investigate further. According to Ali (2011), it has been established that TM research in the Middle East is a valuable resource for understanding this concept and the new knowledge under development. Further, Gulati and Carrera (2012) highlighted the numerous challenges that organisations encounter in managing workforce mobility. Given this, TM appears to be an important concept to explore within Saudi Arabian organisations.
Table 1. Summary of research gap.
| Results of previous studies |
Research Gap |
The current study |
| This research adopts existing comprehensive talent management literature from previous studies to ensure a solid knowledge base forthe study.Previous research is also applied to:Identify and develop a research problem.Determine the objective of the existing research and theories adopted.Identify research requirements and the requisite action.Select appropriate methods.Analyse the search results andinterpretate them.View sources relevant to the current research. |
Few studies have addressed the link between TM strategic approaches and organisational PM, especially among MNCs in Saudi Arabia.Lack of a systematic approach for implementing TM practices.Few studies have focused on challenges faced by TM within organisations, which may hinder the development of talent, innovation, and creativity, compromising high-performance efficiency in MNCs.Few studies have dealt with the output and evaluation of TM as it relates to PM in MNCs, particularly in Saudi Arabia. |
Integrates TM strategy and performance by clarifying the effect of TM strategic approaches (internal and external) on PM within Saudi MNCs.Identify the challenges faced by Saudi MNCs that affect their performance.Clarify the roles of senior and middle managers and key employees (e.g. engineers) in the relevant departments, when building a TM strategy.Identify the obstacles MNCs face in Saudi Arabia which prevent or limit them from developing talent and thus working to create individuals who can compete and extend to new markets.Explore the impact of these obstacles on the organisational performance of Saudi Arabian MNCs.Shed light on the role of the human element in creating individuals and developing talent in order to increase organisational performance in Saudi Arabian MNCs. |
Source: Authors.
Correspondingly, there is currently the issue of a talent shortage facing the O & G industry globally, and in the Arabian Gulf region in particular. Studies have pointed out a significant generational gap within the industry, with a large portion of oil and gas workers set to retire in the coming years (Muir & Li, 2014). This impending exodus of experienced workers will result in a loss of valuable industry knowledge. Consequently, there is a high demand for technical talent, particularly engineers and production staff, specifically in Saudi Arabia.
According to Langenegger et al. (2011), context has been a key focus in the majority of TM research on organisational performance, with a heavy emphasis on corporate strategies. Studies have clearly shown that a contextual practice approach reflects what has been termed the recovery of the practice turn in organisational studies (Schatzki et al., 2001; Miettinen et al., 2009). Therefore, examining TM in different contexts can facilitate a comparative perspective and allow the identification of the TM features unique to each country (Festing et al., 2013). Such analysis could fruitfully focus on the practices of organisations during work time, incorporating employees’ (stakeholders) views and their interactions within the organisation (Nicolini, 2009; Yanow, 2006). The current research, therefore, aims to elucidate how these stakeholders perceive and experience strategic TM approaches in terms of their suitability. This study can also reveal the changes observed in the higher level of performance of MNCs with the early implementation of TM strategies.
Talent management practices in Saudi Arabia have been a focal point in various sectors, including universities, health care, oil and gas organisations, banks, IT institutions, and the tourism/service sector. Furthermore, the role of compensation practices mediated by talent management is crucial in enhancing job satisfaction among faculty members in private higher learning institutions in Saudi Arabia (Bello & Alhyasat, 2020). A study indicated that talent management practices in Saudi Arabia are not cutting edge, with many firms still using basic HR systems, hindering their competitive advantage (Al-Amri et al., 2016). Additionally, there was a study evaluating talent management in Saudi banks, transitioning from traditional HRM practices due to globalisation and increased competition, aiming to identify the awareness and state of talent management (Al Ruwaili et al., 2013). In today’s healthcare field, organisations are realising the growing importance of their human resources at all levels. This is essential for them to stay competitive in a complex, ever-changing, and highly competitive global environment (Dayel et al., 2020). Research indicates that organisations in Saudi Arabia actively adopt talent management practices, particularly identifying, recruiting, developing, and retaining talented individuals, especially during crises (Jamjoom, 2023). However, there are gaps in talent management practices in the oil and gas industry, leading to poor employee satisfaction and commitment, emphasising the need for formal talent identification approaches and better talent development opportunities (Alanazi, 2022). Accordingly, these studies underscore the importance of effective talent management strategies in Saudi Arabia to attract, develop, and retain skilled individuals while addressing various challenges across different sectors (Alferaih et al., 2018).
There has been substantial research on TM in the MNCs. However, only a small number of studies have been carried out in the industrial sector, particularly in the Middle East. There are as yet few studies on the impact of strategic TM approaches on the performance of oil and gas MNCs in Saudi Arabia. Therefore, this research aims to fill this gap using qualitative research methods to explore the perspectives of senior and middle managers, as well as technical employees regarding TM approaches in this context. This study will contribute to the knowledge in the field by informing academics and practitioners in order for future study and practices to be further improved.
2.4. Talent Management Challenges
TM is crucial for an organisation’s corporate planning since it oversees its most valuable assets (employees), so it is important for organisations to develop their workforce’s skills and capabilities for peak talent acquisition and retention. It is becoming increasingly difficult for organisations to manage their talent in this competitive and dynamic business world (Schuler et al., 2011a). For instance, Cantwell (2014) and Teece (2017) suggest that a dynamic capabilities approach helps in understanding the characteristics of MNCs. Thus, MNCs need a contemporary understanding of the nature of their management system to meet the skills challenges of their employees. For example, technological problems are a challenge in the HRM and TM systems, in particular. Moreover, acquiring the right talent and creating a talent pool can be one of the biggest challenges for achieving an organisation’s goals (Karunathilaka, 2020). In business, TM is widely recognised as vital by organisations of all sizes, including by MNCs, however despite this, companies frequently fail to manage talent effectively (Vaiman et al., 2012).
The further development of TM research and its application in emerging economies could therefore provide managers with an understanding of how complexity and dynamism influence practice adoption (Kostova & Roth, 2002), the drivers of practice adoption (Farndale & Paauwe, 2007), and the contradictions that managers face (Rupidara & Mcgraw, 2011). Companies in a wide variety of sectors face significant HR challenges in managing talent, and this increases the importance of TM in those organisations (Farndale et al., 2010; Scullion et al., 2016) as managing talent is imperative in order to achieve competitive advantage (Meyers & Van Woerkom, 2014). The main challenge for creating strategy in HR is that it is primarily conducted for operational rather than strategic reasons (Tansley et al., 2006). In a study of Lebanese organisations, Hejase et al. (2012) found the main limitation in Lebanon to be that most companies did not apply all TM components in an integrated way. However, a further study stated that the research view of TM discourse was not well-founded as it was dominated by consulting or professional business organisations (Cascio & Boudreau, 2016).
Furthermore, it is important to acknowledge that talent and TM are driven by tensions (Dries, 2013), giving rise to varying philosophies. A number of authors believe that only a limited number of employees are talented, citing this as the reason for the lack of talented workers (Meyers & Van Woerkom, 2014). However, others maintain that every employee is gifted in some way that can contribute to the organisation’s success (Buckingham & Vosburgh, 2001; Cappelli & Keller, 2014; Gallardo-Gallardo et al., 2013). In line with the latter philosophy, Tansley and Tietze (2013) propose inclusive talent development as one of the most critical TM approaches to achieve a societal and economic perspective on talent development. In this regard, many businesses have realised that the talent and knowledge they employ are just as important as their physical assets. Due to the current talent shortage, organisations have attempted to find and apply strategies aimed at delivering excellent sustainable organisational performance aligned with their objectives (Collings et al., 2019; Ingram, 2016). Therefore, companies around the world are struggling to attract, develop, and retain talent (Gallardo-Gallardo et al., 2020).
The available literature underscores the fact that the most significant challenges currently facing TM are the inability to attract talent, retention of key talent, discrepancy between skills and abilities and the requirements of the work, the weakness of succession planning (Richards, 2016), and the poor application of TM principles (Koketso & Rust, 2012). Many organisations face the continuous challenge of attracting and acquiring talent, where talented employees look for environmental, diversity and social responsibility. If the management of MNCs is strategised to attract and retain talent, it should be committed to sustainability becoming an integral part of its culture. MNCs are highly vulnerable to this as they must manage conditions, ethics and values which differ between countries (Meyer et al., 2020). There are challenges associated with novel ventures, the resource constraints associated with smaller firms (Dimitratos et al., 2014), and the role of state ownership in emerging market MNCs’ international strategies (Li et al., 2018).
Global TM poses a fundamental challenge for international HRM where the entity is involved in global mobility, as organisations strive to attract and retain high-performing employees who are critical to strategic success. A high level of human capital can be managed through TM, therefore HR practices should align with the MNC’s strategy (Collings, 2014). Although most MNCs headquartered in their country of origin tend to focus on essential functions (Meyer & Benito, 2016), in recent years, it has been argued that MNCs identify strategic positions across the organisation rather than collating the TM function for leadership succession at their headquarters (HQ) (Collings et al., 2019). The TM and general HRM challenges facing MNCs are specific and relate to the necessity of operating within and across differing cultures, legal systems, and economies.
In an increasingly competitive global talent pool, organisations adopt TM to retain talent; however, organisations need to implement it correctly (Botha et al., 2011). Further, MNCs need to effectively develop, maintain and align their TM efforts (Cheese, 2010), with their business strategies. In the current competitive landscape, businesses actively compete for top talent. Implementing a robust talent management strategy that is in sync with the business strategy is crucial to effectively capture the attention of these businesses. Employee engagement is higher when MNCs manage talent effectively (Hongal & Kinange, 2020), source talent globally, and reward managers for improving retention (Schuler et al., 2011b). A thriving TM culture suggests to talented employees that their company values them, improving their support for, and commitment to, their job and the organisation (Harrison, 1993; Nguyen et al., 2019). For instance, those who work for MNCs that keep their promises as outlined in job advertisements will be more likely to commit themselves to their organisations and stay with them for a long time, enhancing retention and individual performance. In this regard, MNCs face a significant challenge in identifying and recruiting the right employees with the appropriate skills (Devine & Powell, 2008). On the other hand, a weak culture characterised by a lack of shared values, beliefs, and norms, negatively impacts employees as it leads to increased turnover has a negative impact on employees because it increases turnover (Harrison, 1993; Nguyen et al., 2019). Thus, it can be understood that culture is what defines the fundamental strength of an organisation.
This study is motivated by the recognition of these challenges and the opportunity to contribute to the understanding of effective talent management practices in the Saudi Arabian oil and gas industry. Drawing on a rich body of literature, this study builds upon the foundational work of scholars such as Bani-Hani (2021), who highlighted the strategic and holistic nature of talent management, and Napathorn (2020) and Stahl et al. (2012), who identified the positive impact of talent management strategies on organisational performance. The adoption of analytics for effective workforce management, as emphasised in the Deloitte report (2013), is identified as a vital component of these strategies.
Additionally, this study aims to delve into the nuanced dimensions of talent management within the Saudi Arabian oil and gas sector, with a particular focus on the critical interplay between strategic approaches to talent management and their impact on organisational performance. By synthesising existing literature and employing a comprehensive research methodology, the study explores the multifaceted aspects of talent management, including recruitment, development, retention, and succession planning. Alanazi (2022) highlights the positive effects of talent management practices on employee satisfaction, commitment, and overall organisational performance, underscoring the importance of a comprehensive approach to talent management that encompasses recruitment, selection, training, development, and employee motivation.
Summarising the existing arguments from the reviewed literature, it is evident that there is a consensus on how TM should be enacted within MNCs in the Saudi Arabian oil and gas industry. This understanding of appropriate ways of structuring, behaving, or performing any relevant job is a key knowledge point. The paper delves into the review, focusing on internal and external TM approaches. First, internal strategies involve finding, growing, and retaining potential skilled employees within an organisation. Second, external strategies refer to acquiring and hiring talent to meet emergent critical roles. The literature also explores inclusive and exclusive talent management strategies, highlighting the benefits of broad-based employee development versus focusing on high performance. Key issues include inadequate training programs, ineffective performance management systems, and the complexities of managing a multicultural workforce. For TM practices to be most successful in Saudi Arabia, they must integrate into the unique cultural and organisational scope.
3. Methodological Perspective
The current study forms a vital part of a larger project exploring TM’s effect on Saudi Arabian MNCs in the oil and gas sector. The overarching project’s primary focus is to evaluate employees’ perceptions regarding the influence of strategic TM approaches on the organisations’ performance. While this project is primarily based on secondary data from the oil and gas sector, with a specific focus on MNCs in Saudi Arabia, it offers unique and valuable strategic insights into the functioning of the oil and gas industry in the Saudi Arabian context. These insights, particularly those related to MNCs, could prove beneficial for policymakers, industry practitioners, and academics.
The methodology for this scoping review will be guided by the framework proposed by Arksey and O’Malley (2005), a widely accepted method for conducting scoping reviews, in five stages: identifying the research question; identifying relevant studies; study selection; charting the data, and collating, summarising, and reporting the results. The central research question guiding this review is: What is the impact of TM on oil and gas MNCs in the Saudi Arabian context? This question is significant as it addresses a key area of concern for MNCs operating in the Saudi Arabian oil and gas sector, and the findings can provide valuable insights for strategic decision-making.
3.1. Data Collection and Selection
The data collection process was designed to enable a comprehensive review of existing literature. The methodology for this review involved synthesising and analysing previous studies on TM in MNCs using databases such as PubMed, Scopus, and Google Scholar. Many sources were searched, including articles, books, and reports on TM strategic approaches (Levac et al., 2010). For this study, a set of carefully chosen keywords and phrases, such as “talent management,” “organisational performance,” “TM strategy,” and “oil and gas,” and variations thereof were used to conduct comprehensive searches.
A detailed summary of the inclusion and exclusion criteria employed during the literature review process is presented in (Table 2) which outlines the specific criteria used to identify relevant studies and potential exclusions based on common practices.
Table 2. Inclusion and exclusion criteria.
| Criteria |
Inclusion |
Exclusion |
| Relevance to Topic |
Articles on Talent Managementin oil and gas. |
Articles unrelated to Talent Management in this industry. |
| Publication Types |
Peer-reviewed articles,conference papers, books, reports, and relevant grey literature. |
Non-peer-reviewed sources without scholarly rigor. |
| Time Frame |
Articles from 2013-2023, unless seminal to the topic. |
Articles published prior to 2013, unless foundational tothe topic. |
| Language |
English language articles to encompass an international perspective. |
Articles in languagesother than English, |
| Geographic Scope |
Studies from diverse locations,with a focus on the oiland gas industry. |
Studies specific to irrelevant regions or industries. |
Source: Authors.
Criteria were established to ensure the quality and inclusivity of the literature included in the review. The review focused not just on any studies but exclusively on those examining talent management in the oil and gas sector, particularly within Saudi Arabia or similar regions, published between 2013 and 2023. The inclusion criteria specified that only certain types of publications, such as peer-reviewed articles, conference papers, books, and high-quality grey literature, would be considered.
For instance, papers that referred to the oil and gas sector but whose results were not directly transferable to the industry were excluded, and vice versa. The scope of the review was also controlled by excluding non-peer-reviewed sources, studies older than 2013 unless highly relevant, and publications in languages other than English. According to Munn et al. (2018), it stands to reason that a review group seeking to identify the available evidence in a field would also be keen on pinpointing and analysing any gaps in the knowledge base.
3.2. Data Analysis
The data was analysed using thematic analysis, a method well-suited for scoping reviews. Thematic analysis, as defined by Braun and Clarke (2006), is “a method for identifying, analysing, and reporting patterns within data.” The systematic analysis was performed on the coded data to address questions related to themes and patterns observed in TM practices, challenges, and outcomes within the Saudi oil and gas sector. The coding process was iterative, involving multiple readings to ensure that all relevant information was captured.
The codes were grouped into broader themes aligned with the research objectives. For example, themes such as “training and development” and “performance management” were combined under the broader theme of “Talent Development Challenges.” The synthesis of these themes provided a clear overview of how various TM practices interact and influence organisational outcomes. The thematic synthesis thus offered insights into the effectiveness of TM strategies, employee perspectives, and the challenges facing MNCs in the Saudi Arabian oil and gas sector. Finally, the findings were organised into themes that directly addressed the research questions, illustrating the implications of these findings for practice and policy within the Saudi oil and gas sector. This methodology ensures that the scoping review provides comprehensive and contextually appropriate insights into the influence and impact of talent management practices on MNCs operating in Saudi Arabia’s oil and gas industry.
In this scoping literature review, a comprehensive methodology was employed to gain a deep understanding of the current state of research on talent management’s effect in the oil and gas industry. The review aims to contribute to the field of TM by mapping existing literature, identifying gaps, and suggesting areas for future research (Grant & Booth, 2009). The results of the thematic analysis are presented in the Results and Findings section, where the key themes are explored in detail. These findings are critically examined in the Discussion section, with a focus on their implications for practice and policy within the Saudi Arabian oil and gas sector. Additionally, the findings from this analysis are intended to address the identified gaps in the existing knowledge. The concluding section of the paper outlines potential research directions that can be pursued to further explore and fill these gaps.
4. Results and Findings
The study of the literature on TM within the Saudi Arabian oil and gas sector yielded several key results. The results are structured around three main themes: talent development challenges, the effectiveness of TM practices, and the contribution of these practices to organisation performance and sustainability. Additionally, the findings within each theme highlight the complex nature of TM practices and their significant effect on organisational performance.
4.1. Talent Development Challenges
The study identified several challenges in talent development within the Saudi Arabian oil and gas industry. A notable issue is the lack of adequate training and development opportunities. This hampers the ability of organisations to build a workforce capable of meeting the evolving demands of the industry. Additionally, the findings highlighted a need for robust performance management systems to effectively assess and enhance employee performance, aligning with organisational goals.
4.2. Effectiveness of Talent Management Practices
The adoption of strategic TM practices was found to potentially improve organisational performance and foster long-term sustainable success. Effective recruitment and selection practices, aligned with strategic HR due diligence, address the industry’s unique talent needs, including challenges such as an aging workforce and global talent competition. From the literature reviewed, the following can be posited: investing in employee development, through promoting training and improving the work environment, enhances performance management and employee retention. Furthermore, the study revealed that inclusive talent development practices, prioritising diverse talents and implementing job rotation and global assignments, underpins organisational commitment and employee valuability.
4.3. Contribution to Organisational Performance
TM practices were shown to enhance individual satisfaction and engagement, contributing significantly to overall organisational performance. These practices promote a positive work culture, improve productivity and innovation, reduce turnover, and align individual and organisational goals. Strategic focus on talent retention and successor development, through offering generous financial packages and integrating reward systems. This appears to minimise employee loss and attracts foreign talent, further enhancing organisational performance.
5. Discussion
The critical interrogation of the literature revealed a complex landscape of TM within the Saudi Arabian oil and gas industry, characterised by both challenges and opportunities. The findings underscore the critical role of strategic TM practices in enhancing organisational performance and achieving sustainable success. Specifically, the study highlights the importance of addressing talent development challenges, such as the need for more robust training and development opportunities and performance appraisal systems (Levy et al., 2015). These challenges, if unaddressed, can significantly hinder an organisation’s ability to cultivate a workforce that meets the industry’s evolving demands. The effectiveness of TM practices, including strategic recruitment, selection, and employee development, is evident in their contribution to organisational performance. These practices not only enhance individual satisfaction (Alanazi, 2022; Kamal & Lukman, 2017) and engagement (Kamel, 2019), but they also promote a positive work culture, improve productivity and innovation, and align individual and organisational goals. The future of work will prioritise people’s needs over tasks or getting the job done, emphasising employees’ roles more, which is projected to enhance production performance significantly (Al Haziazi, 2021). A Global Human Capital Trends 2016 survey by Deloitte (2016) explores how the new organisation is focused on the future of work and the need for a more agile and adaptable talented workforce. The strategic focus on talent retention and development, particularly through inclusive and diverse talent development practices (Kaliannan et al., 2023), emerges as a key driver of organisational commitment and performance.
5.1. Implications for Practice
For managers in the Saudi Arabian oil and gas sector, the study offers actionable insights for improving TM strategies. Emphasising hybrid TM strategies that combine inclusive and exclusive approaches can address the identified challenges and leverage the opportunities for fostering organisational performance. Furthermore, adoption of effective performance management systems, including robust performance appraisal and feedback mechanisms, can enhance talent development and retention. These strategic recommendations are crucial for organisations aiming to navigate the complexities of the industry (Battisti et al., 2023). and achieve long-term sustainability and success.
5.2. Implications for Policy
At a policy level, the findings suggest the need for regulatory frameworks that support the development and implementation of strategic TM practices. These policies should facilitate continuous learning, promoting an environment where employees can regularly update and enhance their skills to keep pace with industry advancements. Encouraging workforce diversity is also crucial, as it brings varied perspectives and innovative solutions to complex challenges within the oil, gas, and renewable energy sectors. Additionally, integrating global talent by easing immigration policies and recognising international qualifications can significantly contribute to the industry’s competitiveness and resilience. Such frameworks not only attract top-tier talent but also ensure that the workforce remains adaptable and equipped to handle the dynamic demands of the energy sector.
6. Conclusion and Future Research Directions
This review offers valuable insights into talent management practices, strategies, challenges, and empirical research methods. It is necessary, however, to acknowledge certain limitations. The scope of the study excluded theoretical or conceptual frameworks and other aspects of talent management, focusing specifically on talent management activities and initiatives. Additionally, the focus on empirical papers may have limited the diversity of perspectives on the topic. Also, some relevant studies may have been excluded due to the selection criteria necessary to maintain consistency. Although the articles reviewed represent a sample of the existing talent management literature, they are considered representative of the currently available literature. The findings of this review contribute significantly to our understanding of talent management practices, despite their limitations. Further, the study opens doors for future research in this dynamic area.
This study provides a comprehensive exploration of TM practices within the Saudi Arabian oil and gas industry, highlighting the nuanced dimensions of these practices and their impact on organisational performance. By identifying the challenges and effectiveness of TM strategies, the research offers valuable insights for enhancing organisational performance and sustainability in a critical sector of the global economy. The study’s findings underscore the importance of a strategic approach to TM, emphasising the need for continuous improvement and adaptation to the industry’s dynamic demands. While this study contributes valuable insights into TM in the Saudi Arabian oil and gas industry, it also opens avenues for future research. Expanding the scope of research to include primary data from industry practitioners can provide deeper insights into the effectiveness of specific TM practices. Additionally, exploring TM strategies in other industries or geographical contexts can offer a broader understanding of the challenges and opportunities in managing talent in diverse settings.