Research Paper on SHRM in Saudi Arabia's Hotel Industry

Abstract

The study uses a qualitative research design with interviews being used as primary data collection method. The data is further analyzed, and the findings used to make recommendations on ways that can be used to improve the adoption of SHRM.

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Introduction

Human resource management is an important function for any business organization. The strategic human resource management allows organizations to strategically position human resources through functions and practices that gets the best for the organization. In Saudi Arabia, there has been a growth in the tourism industry, particularly on hospitality. Hotels are coming up to millions of tourists who visit the country annually. Saudi Arabia is considered to be a religious destination, and millions of people visit the country during the annual Ramadhan celebrations. These people are hosted in hostels within the country's capital. As such, human resources play an integral role in ensuring that these visitors are received and accorded the best services. The research seeks to establish how hotels in Saudi Arabia have embraced strategic human resources and the benefits reaped from the move. Besides, it will evaluate potential benefits the hotel and tourism industry will reap where it shifts focus from traditional HRM practices to SHRM.

1.1. Background

Saudi Arabia is a religious dream destination for all Muslims globally. The city of Mecca and Medina has a religious significance to the religion of Islam. It is estimated that over 15 million visitors come to Saudi Arabia for Hajj and Umra (Aleidan, 2017). The revenue collected from these visits is estimated to be over $100 million. These figures show that Saudi Arabia has great potential for tourism because of its religious importance. There has been a steady rise in the number of hotels in Saudi Arabia (Nieves & Quintana, 2018). In 2017, there was an increase of 7% in the number of hotels to 2,036 (Aleidan, 2017). Besides, the number of furnished apartments grew to 6,940, and hospital entities amounted to 506,716 rooms (Aleidan, 2017). Saudi Arabia has also enhanced its tourism sector through the Saudi Arabia vision 20130 on tourism. There are other tourist attractions in the country that are visited by millions of people yearly. The capital Riyadh is a tourist attraction as it hosts international airport. Annually, millions of travelers, book hotel rooms in Riyadh has they connect their flights to other destinations. The capital also hosts international conferences which attract world dignitaries. Cities like Jeddah and the Eastern Province attract tourists which increases the demand for hotels and other hospitality services. These figures indicate that there is a rise in the demand for hospitality services during these celebrations. Hotel services are provided by employed staff who are experienced to serve guests of diverse backgrounds.

There is little understanding of SHRM in Saudi Arabia since the majority of the hotels stick to tradition HRM practices. The adoption of SHRM has been slow with hotels which have an understanding of the benefits of SHRM receiving quests which are willing to pay a premium price. There is a need to create awareness on the benefits of SHRM and the strategies these hotels should put in place to adequately maximize tremendous opportunities presented by SHRM (Allui & Sahni, 2016). There is little research available on how SHRM impacts the performance of hotels in Saudi Arabia. Researching this area will provide valuable information that can be used in the industry to improve HRM practices and maximize the benefits the industry can reap when it focuses on HRM as a strategic function. The research will further identify new areas of research that can be studied in the future.

1.2. Problem Statement

Hotels in Saudi Arabia are faced with challenges which can adequately be solved through SHRM. However, there is little information regarding the adoption of SHRM in the hospitality industry in Saudi Arabia.

1.3. The Overall Research Aim and Individual Research Objectives

To examine the adoption of SHRM in Saudi Arabia's hotel industry.

The establish the level of awareness on the benefits of shifting HRM strategies to SHRM.

To identify approaches to enhancing the adoption of SHRM among hotels in Saudi Arabia.

1.4. The Research Contribution

The study will contribute to the growing research in the field of SHRM in Saudi Arabia. There is little information available regarding SHRM in hospitality. The research will borrow from existing literature on HRM and focus on how SHRM adoption in the hotel industry can be a game changer. The study will further expand knowledge of how HR professionals can improve productivity in the hotel industry. There has been inadequate information on how performance in the hotel industry can be improved. The perspective of SHRM will provide insights that can be utilized by stakeholders in the hotel industry to boost productivity. The research will further direct future research in HRM particularly on the hospitality and service industry. Saudi Arabia is a growing economy and service, and the hospitality industry is growing. The findings from the research will help the government to develop policies such as the vision 2030 on tourism.

2. Literature Review

SHRM is a concept that was developed as a management practice particularly in managing personnel. The definition and understanding of SHRM have been changing due to different research that targets a specific industry. SHRM has been defined as a combination of different strategies aimed at deploying human resources to perform activities that maximize the opportunity of the organization to realize its goals. SHRM is a field that has significantly developed in the U.S. and western countries unlike in Asia. There have been numerous researchers seeking to identify the link between SHRM and the financial performance of an organization. Majority of the research has established a positive relationship between SHRM and the financial performance of organizations. However, AlGassim, Barry & McPhail (2017) found out that there was a weak relationship between the two factors.

According to Madera et al., (2017), SHRM helps organizations to identify key strategic areas that require the deployment of skilled staff. The findings from this research show that there are functions in an organization which is best done by individual employees. The issues raise things like skills, experience, and expertise in performing certain functions. The finding supports the fact that organizations must strategically deploy its staff to perform functions that are best suited to perform. Gannon, Roper & Doherty (2015) notes that HRM is a field that keeps changing and developing strategies to counter changes in HRM should be put in place to get the best out of human resources fully. As such, SHRM provides a solution to HRM where anticipated changes can affect business operations.

SHRM is a concept that has evolved ever since it was established in HRM. Noe et al., (2017) define SHRM as the use of human resources in the organizations effectively to achieve strategic goals of the organization by integrating HR practices, business strategy, business performance, and competitive edge. In this definition, the author captured organizational performance as well as a business strategy. SHRM must be in line with a business strategy such that employees can be deployed in a manner that will ease the process of achieving strategic goals (Noe et al., 2017). Strategic HRM helps the organization in planning and is put into consideration while making business decisions. An organization must analyze its HR practices and capabilities while developing strategies that will help the organization to meet its goals.

The hotel industry is a service industry where competition is high. However, in Saudi Arabia, hotels compete between themselves for a market that is readily available for all. Altarawneh (2016) explored the nature of HR practices in Saudi Arabia and found out that little regard is put on the importance of HR. Majority of the people working in hotels in Saudi Arabia have underpaid something that affects performance. A shift towards SHRM can help the industry to identify factors that contribute to poor performance in the Hotel industry (Budhwar & Mellahi, 2016). Besides, efforts need to be made to create awareness on HRM and SRM to improve services in hotels as well as expand revenues from the hotel industry. There is limited research that has investigated SHRM in the hotel industry in Saudi Arabia. This research provides the opportunity of expanding knowledge on SHRM in the hotel industry in a bid to find ways of pushing for the adoption of SHRM among Saudi Arabia Hotels.