There is an excess supply [of engineers and doctors] and they are asking for high salaries when there aren't enough jobs.
On the other hand, Alhussaini says the lack of people with both financial and technology expertise is a challenge as well as those with knowledge in supply chain and logistics, all big sectors that are currently undergoing massive digital transformation. “There is lack of availability of developers, data engineers and machine-learning experts,” Alzaini adds, and the available pool only gets even smaller for early-stage startups. “Early stage companies are facing more difficulties to find and convince talent, but it becomes easier as the company gets bigger in size and value,” he explains, adding that hiring dynamics typically change right after a round of funding makes headlines.
In all fairness, potential recruits aren't wrong to be skeptical, he acknowledges. “They are aware about the companies that go bankrupt, so a good reputation in the ecosystem matters too.” The most challenging hire is finding a co-founder to take the risk with you, Alzaini adds.
A good start
But while the majority are still “reluctant” to take the leap, Alhussaini believes the minority is a good start. “As with everything, you are changing or disrupting the thinking of the people,” he says. The mentality among Saudi youth is also changing owing to this generation's Silicon Valley successes, he notes. “They've seen that the people who did Facebook, WhatsApp, Google, and so on, are all young people.” And it's vitally important for the country's future prosperity perceptions change, Alzaini insists. “In America, 90% of the government's revenue comes from the startup companies like Google, Apple, Amazon, [and] Facebook,” he points out.
Saudi's Vision 2030 plan was designed to attract foreign investment, create jobs for citizens and most importantly, diversify the economy away from dependence on oil after crude prices plummeted in 2014. The government's target is to raise the contribution of SMEs to GDP from 20% to 35% by 2030.
Dubai-based business growth specialist Ayman Itani, who advises founders and governments that run startup programs in the UAE and Saudi Arabia, is bullish on the changing scene. “In any growing economy there's going to be a need for more talent,” he says. “The ideal approach is always to source [talent] locally, especially if you're solving local problems. What's exciting about startups in Saudi is that they're working on solving local needs.”
And with success stories in the region, like Uber's acquisition of Dubai-based ride hailing app Careem for US$3.1 billion, the largest technology sector transaction in the Middle East so far, as well as other exits in the region, Itani says he witnesses more and more individuals in the Kingdom wanting to shift to entrepreneurship every day. “They're leaving their comfortable jobs to go to challenging startups. They're putting in their own money and family money as well, because they are eager to do so now and also it's more socially acceptable due to the success of Careem.”
Moreover, with many startups offering workers ownership interest in the company through employee stock ownership plans (ESOPs), Itani says talent are become more tempted to venture into the ecosystem. “Even if they're not starting their own business, they want to be part of a growth story,” he explains. “That gives them long-term benefits as well, financially, or as an alumni of the startup. One talent trend that I see that I think is encouraging for everybody is that let's say you work with an early stage startup, as that startup and its name grows, you become wanted, and can move on to a bigger startup. So, you could be vested in this one, and have moved on.”