Human Resources Development Fund

Human Resources Development Fund Human resources development constitutes one of the major problems that the Kingdom faces in its efforts to strengthen the process of its economic development, using a series of economic reforms whose effects have become visible when the government of the Custodian of the Two Holy Mosques has taken a number of decisions and steps. Some of the major decisions and steps that have been taken are the Saudization of jobs and the preparation of Saudi youth in order to assume their responsibilities and participate in the growth and development of the national economy. In addition, companies in the private sector are to be encouraged and assisted so that they can hire Saudis and make their capabilities and services available to them. In consequence of this, the economic policy makers of the Kingdom have realized the importance of making human resources development a top priority, establishing and developing effective modern mechanisms that will usher and guide it. These mechanisms are to comply with the needs of the local labor market in order to guarantee the highest returns both in terms of quantity and quality. They should also support and invigorate the national economy so that it can stand up to regional and international competition. Giving importance to the investment in human resources development has considerably increased, starting from the first five-year plan in 1970 and going up to the end of the seventh five-year plan in 2004 (see figure 1). Hence, the training and preparation of Saudi human resources and the development and enhancement of their skills has become the first priority in the development policies of the government. Consequently, 276 billion riyals have been earmarked for human resources development in the seventh five-year plan. 1 As a result of this, the Council of Ministers had made Resolution No. 107 dated July 2000, and the Royal Court released Royal Decree No. 18M dated August 2000 to establish the Human Resources Development Fund. The Fund will have a legal personality and will be administratively and financially independent. Its Board of Directors will represent it and its head office will be in Riyadh. It will also have offices and agents that will carry out its activities in other cities in the kingdom. The Fund will concentrate on the encouragement, training and employment of Saudis in the private sector.

H The Establishment of the Fund The establishment of the Human Resources Development Fund, with its legal and administratively and financially independent personality, was founded as a result of a clear strategic Saudi objective whose achievement has posed an unprecedented challenge. This strategic objective is the Saudization of jobs in the private sector; and the establishment of the Fund has become one of the effective mechanisms that prepares well trained and well qualified Saudi cadre of both genders who will be up to the challenges ahead. The preparation of this cadre will precipitate the achievement of the strategic objective that will bring about social, economic, and security benefits to our country. The Human Resource Development Fund has been given the responsibilities that have been drawn out by our esteemed leadership, which was spelled out in the Resolution of the Council of Minister No. 107 dated on July 2000 and in the Royal Decree No. 18M dated on August 2000. It was decided by these authorities to establish the Fund as a legal entity that enjoys administrative and financial independence. This status will enable those who run it to translate the policies of the government into reality; and they are supposed to do this by offering the essential knowledge and skills, which will help them to get jobs in the private sector, to Saudi youth. The execution of these policies will undoubtedly have positive effect on our national economy. 2 In connection with this, the annual money transfers by the expatriate labor are a financial drain from the national economy, which cannot be ignored anymore. The constant flow of these funds outside the country can be stopped, and the money can be invested in economic projects either in manufacturing or in the services, when the citizens of this country take the place of the expatriates and assume their responsibilities towards their country in the best possible way. When this happens, the out flowing funds will flow in, and will, consequently, reinforce our economic stability and our national security.

Objective and Responsibilities of the Fund The General Objective of the Fund: To support the efforts to prepare a national workforce and help them employed in the private sector. In order to realize the general objective, it will do the following: 1. 2. 3. 4. 5. 6. Offer grants to those involved in the preparation, training, and employment of a national workforce, especially in the private sector. Share the expenses of preparing, training, and employing the national workforce in the private sector. Pay a percentage of the salary of any trainee who is hired by a private firm after he finishes his training. The same will be done for new recruits of the firm. Offer financial assistance to programs in the field, projects, plans, and studies that are aimed to employ Saudis and help them take the place of the expatriate workforce. Provide loans to private establishments that prepare and train the national workforce. Embark on studies and research that are related to activities in the field of preparing, training and employing the national workforce. The Fund has from its inception laid down the structures and organizations that enable to carry out its work and execute its objectives. It has established an administrative structure that reflects the objectives for which it has been founded. For example, it has created the following departments: the department of training, the department of employment, the department of programs and research, and the department of financing. These departments complement each other in their work a feat which has enabled them to achieve the objectives of the Fund in a balanced manner and made them exhibit positive results in the labor market in a very short time. 3

H The Administration of the Fund Intent on developing its human resources, the Fund has given training courses to its employees in order to enhance their abilities. These courses have contributed to the development of their skills and abilities. Likewise, the participation of the Fund in conferences and seminars that are concerned with human resources development has had positive effect on it. It has been exposed to the most modern techniques and positive practices related to its specialization. Consequently, this has enriched the knowledge and skills of the participants from the Fund who attended these courses. The Department of Training The role of the Department of Training of the Fund is to facilitate the needs of the private sector by translating one of its objectives, namely the employmentoriented training into reality. It will do this by ensuring the high standards of the graduates and the competences of the trainees. Moreover, it will ascertain the availability of opportunities and essential equipment in places where the training is done, endorse the programs, follow them up, prepare recommendations of support, and regularly assess them. The Department of Employment 4 The Department of Employment is responsible for the coordination with places of work, namely in establishments, training and educational companies, and national employment projects that are concerned with the employment of Saudis. It is also responsible for studying applications for direct employment, which are submitted by the establishments and companies, the follow up of new employees after they are hired, and the confirmation of continuity of employment.

The Department of Finance The Department of Finance is responsible for the following: Assessment of the economic viability of the training programs and projects before offering the loan to the firm, and ensuring their consistency with the general objectives of the Fund. Receipt of enough guarantees that are proportional to the loan from the firm that applies for the loan. The amount of the required loan for any program or project of a single firm should not exceed 2.5% of the money allocated for loans in the fiscal year by the Fund, and 30% of the total cost of the project that seeks the loan. Supervision of the implementation of programs and projects that receive loans in order to ensure that they are going according to plan, and provision of consultations with regard to problems and difficulties that programs and projects face. This supervision will be carried out in the form of periodical reports about the progress of the work of the programs and projects as well as in the form of visits for inspection. The Public Relations Department The Public Relations and Media Department comes directly under the Director General. This department has a number of responsibilities chief among which is transmitting the mission and the objectives of the Fund to the general public, which is the actual environment for the work of the Fund. It will do this by passing on the news of the Fund and its activities to the different types of the media, and by being present in the events and seminars in which the Fund participates. 5 The Quality Unit The aim of this unit is to improve the quality of the services of the Fund. It is responsible for the design, endorsement, and follow-up of quality control programs for all the activities of the Fund. Some of these programs create systems for measuring

H the quality of service with regard to competence, effectiveness of performance, and analysis of production services in a periodic manner, while comparing with them both the local and international standards. It then submits reports to the Director General. It also contacts the organizations that benefit from the services of the Fund, checking their level of satisfaction and receiving and acting upon general suggestions. The Department of Planning and Development This department is responsible for preparing the yearly and five-year plans that are laid down in order to realize the objectives of the Fund. It also follows up their executions after they are adopted. The Financial and Administrative Department This department is responsible for providing financial services to the departments, units and employees of the Fund. The Department of Programs and Research 6 This department is responsible for coordinating the programs and projects that are concerned with the growth and development of human resources. It conducts studies and research in the preparation, training, and employment of the national workforce that the Fund contributes to their funding. It also provides library facilities and facilities in the field for the researchers of the Fund. The Legal Department This department is responsible for studying the law and giving legal advice to the Fund. It studies all the cases that it receives from all the departments and provides legal opinions about them. It also studies and prepares contracts and agreements according to the rules of the government. Moreover, it revises and checks the agreements that are to be made with others, ensuring their accuracy and precision from the legal perspective

and checking that they are properly drafted and clearly express the aims that they are meant to serve. In addition, it represents the Fund in courts during legal proceedings. It also studies and compares the sources and rules of law, such as labor law, commercial law, and administrative law. Follw up Department: Implement an active control on the performance of the fund administration units and its branches as well as making sure that the workflow is going on according to the polices,plans, and programs set forth. Moreover, monitoring the extent of the supported establishment abidance by the agreement concluded with the Fund. Female Section: Introduce the services provided by the Fund to the business women through facilitation of training and employment of female national labor force and enabling this labor force to occupy suitable jobs in the private sector. Department of Information Systems: This department is concerned with supply, promotion and upgrade; and operation of the various software and systems as well as the hardware of all types involved in performance of the Fund activities. 7

H King Fahad Recruitment National Center The late Custodian of the Two Holy Mosques King Fahad Bin Abdul Aziz (May Allah Bless him) had approved to establish King Fahad Recruitment Center at his own cost to stand as a technologically and electronically advanced center is to assist in employing saudi manpower and to provide professional advice on programs. General aim of the Center: The center is aiming to facilitate employment of Saudi Manpower in the private sector, and provide professional advice services. Detailed objectives: 8 1. 2. 3. 4. 5. provide recruitment service for Saudi citizens who are seeking employment, and business enterprises in the different regions through advanced technologies. Act as coordinator between applicants and the private sector to fill in the available vacancies. Establish a labor market database for both employment seekers and available vacancies. Inroduce training programs required for the labor market and suggest suitable programs for applicants whose qualifications are not appropriate for the available vacancies. Provide professional advice and detect professional tendencies of school students in early stages of education to help them in determining their course of education and training, and interlink education and labor market.

6. Provide special care for employment seekers of the special needs category, as well as those users who required special care. Establishment of the center: Establishment phase had involved the construction of three centers in the major regions: Riyadh. Holy Makkah and Eatern regions. Then followed by opening (12) electronic service units at Riyadh, Holy Makkah, Dammam, Hail, Abha, Jizan, Najran, Onaiza, Jeddah, Wadi Dawasir, Al Jouf, 9

H Training & Recruitment Support Mechanism 1- The Fund has developed the trainig & recruitment programs which started in the two previous years and represented in the recruitment - linked training program and the direct recruiment program to be replaced by the developed program for supporting training & recruitment aiming at expanding the training & reccruitment field in the Private Sector which has been implemented on 16/08/2004 AD as follows: The Support Mechanism for those priviously qualified or trained (one already qualified) : It aims the support of those previously trained by government or private institutions and holding an approved specification and holding an approved certificates such as the graduates of University and the Colleges & Institutions of the General Organization of the Technical & Technological Organization and the Institute of Public Administration so that the trainee shall satisfy the requirements of the job or required training for provisional adaptation while at work. The support in this way shall be offered as per the following mechanism. 10

Training Support Supporting the period subsequent to training Period Training Salary Period Salary Dosen`t 500 SR/ 75% of the The period (50%) of the exceed (3) month salary not exceeding complementing total salary not months for each (1500) SR/ month two years exceeding employee for every effective (2000) SR/ month employee and the the expiration for every employee employer shall incur of training and the employer the remaining (24) months shall incur the percentage. training period remaining percentage. 11

H 2- The Mechanism of supporting those not priviously qualified ( The non-qualified ): It aims supporting the training and recruitment of those not previously trained qualified and does not fulfill the requirements of the job he/she is nominated to. In this case, the support is offered as per the following mechanisms: Training Institution Training Support Supporting the period subsequent to training Period Training Cost Salary Period Salary Inside Not (500)SR month (75%) of the 50%) of total the exceeding for every saary not salary not institution (12) month employee exceeding (1000) exceeding (75%)of SR/month for (2000 SR ), training cost not every employee. (12) month for every Outside Not exceeding (1500) The employer months employee and the exceeding SR/month. shall incur the the employer 12 Institution (24) month The employer shall incur the remaining remaining percentage shall incur the remaining percentage. percentage.

The Mechanism of Supporting Health Training: It aims at supporting the qualification of job seekers in specialties that achive added value to the labor market and it includes supporting recruitment-linked training for the diploma stage and for those desiring to pursue their study of diploma or complementary B.Sc in nursing or pharmacology specialties in addition to supporting the recruitmentlinked training for the B.Sc stage in nursing and pharmacology. Here under is a brief presentation for the supporting mechanism in the health specialties: 13

o M Human Resources Development Fund - The Guide Book An indicative table showing the mechanism project for supporting the recru- H itm The target category The trainee status Training location Diploma stage Not previously Outside the establishment supported premises The complementary Training shall be Outside the establishment B.Sc stage.it is a perquisite to restricted to Nursing & premises obtain a diploma, passing the pharmacology specialties professional practice exam, plus being at work and the lapse of one year at least in the job 14 B.Sc stage (Nourice) Training shall be restricted to Nursing & Outside the establishment premises. pharmacology specialties

u- itment -linked training in the health sector for both diploma and B.Sc stages: Training Support Supporting the recruitment period Period Cost Salary period Cost Not exceeding 30 months The fund contributes by 90% of training cost not exceeding 9000 SR/One semester The fund contributes in supporting the salary by 1000 SR/ month One year commencing from the expiration of training The fund contributes by 50% of the employee`s salary not exceeding 2000 SR per month. The The fund shall Not obtaining Recruitment shall complementary contribute by 90% a support not be supported period for the of the training cost for salary from unless after B.Sc stage after not exceeding the fund. completing the crediting the 25000 SR for one B.Sc stage. diploma hours semester. from the competent organization The approved period for The fund shall contribute by 90% The fund contributes by One year effective The fund contributes by 15 obtaining B.Sc of the training cost 1000 SR/ the completion (50%) of the degree as not exceeding month during of training employee`s salary approved from 25000 SR for one training not exceeding the educational semester. 2000 SR organization in the per one month. Ministry of Higher Education

H The Fund Programs 1-Training program at work ending by skill for job seekers: This program aims at enrolling the non-qualified job seeker in a training program at work in an establishment to empower him acquire specialized skills and experience in a given profession then consider employing him in the trainig establishment or others (Non recruitment liked training). The fund shall incur (500 SR) for the establishment and (1500 SR) as a compensation for the trainee on monthly basis for one trainee. 2- While at work training ending with experience ( for those already qualified): This program aims at entrolling the qualified job seeker whom it was difficult to recruit in a training program at work in an establishment for enabling him / her acquire experience in a given profession and then study the possibility of employing him / her in the training establishment or others (Non-recruitment-linked training). This program is supported in accordance with the training mechanism ending with skill while being at work. 16 3-The program Maher 12/ 12 for qualifying the specialized cadres: This program aims at qualifying (12,000) job seekers for work in several professions needed by the labor market by the year 2012. They are non-employment training programs. Training is conducted in programs approved from training institutions that have achieved outstanding success in trainig and employing the outputs. The fund incurs all the training cost and the compensation to the trainee amounting (1000 SR)on monthly basis as per the system of the training institution.

4-The Professional Guideance Program: The professional guidance addresses two categories The First: School students The guidance aspect is related to them, as through it, a scheduled visits by schools are conducted to King Fahd National Recruitment Center or any of its branches for benefiting from the educational lectures provided to them and perform the professional preferences examination via the professional guidance system available on the electronic site of the Fund. The Second: The Job Seekers They are related to the professional guidance as it is provided to them via guidance lectures and movies for job seekers applying to the center as such lectures and movies contribute in educating them on how to search for a job, how to prepare CVs, getting ready to interviews and introducing them to the work envionment in the private sector. 5- The Direct Employment Program The program is provided to the private sector institutions suppoprted and non-supported by the fund through activating the support agreements entered between the fund and the private sector institutions as King Fahd National Employment Center directs those registered in the center`s database for work in the jobs provided by the supported institutions as per their employment plans in addition. More over, the center holds direct employment meetings combining the job seekers with the recruitment officials in the non-supported institutions for performing interviews and employment in the light of the same. 6-Distance Work Program 17 This program aims at supporting the employment of the women as well as those with

H special needs via distance work technique in the establishments of the private sector either by work at home or in another alternative site on fulltime work basis. The employee shall be considered a staff in the beneficiary establishment. The importance of distance work technique is derived from the availability of female job seekers having specialized scientific and training qualification that enabling them to work and achieving productivity. The Fund shall incur 50% of the employee`s salary, not exceeding 2000 SR on monthly basis for two years. 7-The Program of supporting training & qualifying the owners of the small-size establishments This program aims at supporting the training & qualifying the citizens dessiring to start their own projects by incurring the training costs estimated by (3000 SR) for every trainee joining the program via the training portfolio approved by the Fund and implemented by the training bodies sponsoring the small size projects as per the conditions and controls determined by the Fund. 8-The Program of supporting the owners of the small size proj ects 18 This program aims at supporting the owners of the small establishments by paying a monthly subsidiary to the owner of the small project amounting to (3000 SR) for (24) months as per the support controls to be determined by the Fund, provided the capital of the establishment is subsidized by an another official body such as the charity fund, Al Me`awwiyah fund, credit & saving bank or the chamber of commerce provided that the owner of the small establishment practices the work by himself, with the possibility that the establishment owner may benefit from the Fund`s subsidization of his Saudi Staff wages in case he /she enters a subsidization agreement with the Fund.

9-The Program of providing the technical & administrative consultancies to training This program aims at providing the technical & administrative consultancies to the establishments, individuals and the private training institutes and centers with respect of the training programs required by the labour market as well as the criteria and the controls of the quality of the training programs supported by the Fund and introducing them to the commercial partnership and conscience with international training bodies,as well as motivating them to adopt the specialized international certificates and obtaining the ISO 9002 in the training institutions as well as providing the technical support for the training bodies which develop their programs for introducing the work principles & ethics, and perform the personality test & analysis for the trainees before enrolling them to the programs. 10-The program of qualifying the human resources specialist: It is a training program directed to the human resources officials in the private sector establishments and it aims at qualifying and preparing national cadres in the field of the management of human resources and jobs saudization in such establishments. The Fund contributes with a subsidization amounting to 75 of the training costs. 11-The Program of the Human Resources Manual It aims at providing work manuals for guiding the establishments of the Private Sector in establishing and upgrading the concept of Human Resources.The manual shall include the policies of the management of human resources and the organizational charts for the departments as per the establishment size and the requirements of establishing an information system for the human resources (HR MIS). 19

H 12-The Program of the incentives for the job stability for the supported employees This program aims at achieving the job stability for the supported employees in the employing establishments, so that the employee benefiting from the support completing one year period in the employing establishment shall be given a compensation equal to one month salary in addition to a training program to be determined by the establishment which cost shall not exceed (5,000) only five thousand Saudi Riyals. It has been also approved awarding the employee who completes a two year period in the establishment a two month salary eward, in addition to a training program to be determined by the establishment which cost shall not exceed (10,000) Ten thousand Saudi Riyals. 13-The Program of supporting prisoners employment 20 This program aims at encouraging the prisoners during passing their sentence in jail and afterwards through contributing in supporting their salaries as the fund contributes for (24) months with an additional amount to the salary by (5%) of the salary of the jailed employee during passing his sentence in jail, which shall not exceed (1000) Saudi Riyals, on monthly basis.in the event, the sentence expires prior to the expiration of the support period (24 months) and the continuity of the contractual relationship between the employee and the establishment as set forth in the organizational regulations, 50% of the salary shall be supported for the period completing the two year period provided that such support shall not exceed (2000) Saudi Riyals on monthly basis.