Market Research Report

Saudi Arabia HR Outsourcing Services Market Research Report: Forecast (2024-2030)

By Services (Payroll [Payroll Management, Loans & Other Benefits Processing, Payroll Master Data Management, Pension Administration, etc.], Benefits Administration [Health Insuranc...e, Retirement Accounts, Vacations & Leaves, Employee Visa Processing Services, Employee Data Administration, etc.], Recruitment Process [Talent Acquisition, Recruiting, etc.], Learning Services [Talent Development & Management, Employee Collaboration & Engagement, etc.], Multi Process Human Resource [HR Tools, Workforce Planning & Analytics, Budgeting, Integrated HR Services, etc.], Others [HR consultancy etc.]), By End User (Oil & Gas, BFSI, Hospitality, Healthcare, IT & Telecom, Public Utilities, Others), By Region (Central, East, West, South), By Company (Sovereign Group, Nathan & Nathan, Miza Business Solutions, Tharwah, Respeed, IRSAA Business Solutions, The First national Human Resource Company (FNRCO), ETISAL International, Marcom Arabia, Raya Customer Experience, Other) Read more

  • ICT & Electronics
  • Oct 2023
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  • PDF, Excel, PPT

Market Definition

Human resource outsourcing refers to the hiring of a third-party organization by the business to administer its human resources & personnel management. These services include payroll processing cycle, leave & attendance management, recruitment & hiring, etc. HR management is a service that most organizations are likely to outsource as it enhances the personnel management function & increases the efficiency of the organization.

Market Insights & Analysis: Saudi Arabia HR Outsourcing Services Market (2024-30):

The Saudi Arabia HR Outsourcing Services Market is projected to grow at a CAGR of around 7.2% during the forecast period, i.e., 2024-2030. The market growth is attributed to the surging focus of the Saudi government to diversify their economic revenue from service-based industries. The focus has been surging as part of Saudi Arabia’s “Vision 2030”, launched in 2016, under which the government announced various programs like the Financial Sector Development Program, Health Sector Transformation Program Privatization Program, National Transformation Program, etc. These programs have helped attract many local & foreign investments to the country, which, in turn, is driving the need for HR outsourcing services for hiring human resources & managing business operations efficiently.

As companies establish themselves in the region, they often seek HR outsourcing services to manage complex Saudi labor laws & compliance requirements, making it a lucrative market for HR outsourcing providers. As Saudi businesses adapt to the new normal, they are increasingly turning to outsourcing to access the latest HR technologies & expertise in managing remote workforces.

Report Coverage Details
Study Period Historical Data: 2019-22
Base Year: 2022
Forecast Period: 2024-30
CAGR (2024-30) 7.2%
Region Covered Central, East, West, South
Key Companies Profiled Sovereign Group, Nathan & Nathan, Miza Business Solutions, Tharwah, Respeed, IRSAA Business Solutions, The First national Human Resource Company (FNRCO), ETISAL International, Marcom Arabia, Raya Customer Experience, Other
Unit Denominations USD Million/Billion

 

Additionally, in Saudi Arabia, digital transformation is progressively being adopted by various end-user industries for business operational excellence. Thus, the trend towards digitalized HR outsourcing services is notably emerging across the country for improved benefits like efficient performance management, etc. Simultaneously, the Kingdom's increasingly dynamic labor market has created a demand for specialized HR solutions.

With the rise of flexible employment models and a growing need for talent acquisition and management, companies are finding it cost-effective to outsource these functions to experts who can provide tailored solutions. Further, as the Saudi government is focusing on streamlining bureaucratic processes and creating a more business-friendly environment, it is creating notable opportunities for international HR outsourcing firms to enter the market. Hence, these factors combined are expected to continue to augment the demand for HR outsourcing services in Saudi Arabia in the forecast years.

Saudi Arabia HR Outsourcing Services Market Driver

Complexity of Compliance & Labor Regulations Leading to a Surging Adoption of HR Outsourcing Services – Saudi Arabia has a highly regulated labor market with numerous laws, regulations, and compliance requirements. The country has strict labor laws, such as the Labor Law, Nitaqat (Saudization) program, and the Wage Protection System (WPS), which require meticulous adherence by employers. The introduction of reforms like the Labor Reform Initiative (LRI) in 2022 has added to the regulatory landscape. These regulations encompass areas like labor contracts, employee rights, wages, working hours, and expatriate worker quotas.


Saudi Arabia HR Outsourcing Services Market Research Report: Forecast (2024-2030)

These rules are frequently updated, making it challenging for businesses, especially those new to the country, to stay compliant. Thus, businesses that are expanding their presence in Saudi Arabia are opting for outsourcing HR services to gain business expertise in navigating this complex landscape.

Additionally, non-compliance with labor laws & business standards in Saudi Arabia results in penalties and operational disruptions. Thereby, fueling the demand for HR outsourcing services to mitigate these risks & maintain good standing with government authorities in Saudi Arabia.

Saudi Arabia HR Outsourcing Services Market Opportunity

Growing Focus on Cost Efficiency with the Rapid Economic Transformation to Fuel Market Growth – As the country is diversifying its economy by encouraging service sector growth, cost optimization has become a crucial factor in uplifting business growth. Thus, the need for HR outsourcing among organizations is rising to control expenses while accessing professional HR services. This is becoming appealing for startups, SMEs, and businesses looking to streamline their operations.

The Saudi government is planning to boost public-private partnerships aligned with its 2030 Vision to promote collaboration between government entities & the private sector in various projects and initiatives. With the surging focus of the Saudi government, the country is anticipated to witness substantial investments in manufacturing & service-based industries.

The increasing need for efficient government and management services to ensure that businesses adhere to Saudi standards, particularly in terms of Labor Laws, is expected to drive a strong growth in the demand for HR outsourcing in the years ahead.

Saudi Arabia HR Outsourcing Services Market Trend

Growing Inclination Towards Shared Services Augmenting the Market Growth – The demand for shared HR outsourcing is rising in Saudi Arabia due to the evolving needs of businesses and government entities for enhanced operational efficiency & cost savings. In today's era, organizations are increasingly recognizing the importance of achieving full integration to seamlessly connect with customers, suppliers, and multi-site company locations worldwide.

As Saudi Arabia is working towards diversifying its economy, both public & private sector entities in the country are focusing on their core competencies. This leads to increased outsourcing of non-core functions like shared HR services that would help them allocate resources more strategically.

Saudi Arabia HR Outsourcing Services Market (2024-30): Segmentation Analysis

The Saudi Arabia HR Outsourcing Services Market study of MarkNtel Advisors evaluates & highlights the major trends and influencing factors in each segment & includes predictions for the period 2024–2030 at the national level. Based on the analysis, the market has been further classified as:

Based on the Services:

  • Payroll Services
  • Benefits Administration
  • Recruitment Process
  • Learning Services
  • Multi-process Human Resources
  • Others (HR consultancy etc.)

Multi-process Human Resource services are gaining noticeable traction in Saudi Arabia. The segment growth is attributed to the surging expansion of SMEs (Small- and Medium-sized Enterprises), which form a significant portion of the Saudi economy. For instance, according to Monsha’at, a Small and Medium Enterprises General Authority, the Kingdom’s vibrant SME sector continued to expand in the third quarter of 2022, reaching approximately 978,445 enterprises in Q3 2022 as compared to around 752,500 during Q1 2022.

The number of SMEs is further anticipated to grow in the coming years, with an expected GDP contribution of over 30% by 2030, aligned with the Saudi initiatives for privatization under Vision 2030. As Small and Medium enterprises often lack human as well as capital resources to operate efficiently, the need for HR outsourcing to manage multiple services, including payroll, recruitment, benefits administration, etc., is substantial.

Further, as Monsha’at predicts the expansion of Fintech industries in Saudi Arabia to grow around 65% during 2022-2025 to support the Saudi digital transformation, the need for efficient multiple IT-related HR outsourcing services is expected to rise. These services include hiring, training, managing employee benefits, administrative services, etc., thereby fueling the demand for multi-process HR outsourcing services during 2024-2030.

Based on the End User:

  • Oil & Gas
  • BFSI
  • Hospitality
  • Healthcare
  • IT & Telecom
  • Public Utilities (Aviation, Infrastructure Facilities, Ports, etc.)
  • Others (Education, etc.)

The Hospitality sector is speculated to hold a prominent share of Saudi Arabia HR Outsourcing Market in the forecast years. The rapid expansion of hotels, resorts, and tourism-related businesses in Saudi Arabia is leading to several HR challenges across the hospitality business, including workforce management, ensuring compliance, and training solutions. Owing to this, the hospitality business is transitioning towards adopting HR outsourcing services to concentrate on delivering exceptional customer experiences. These include tasks like payroll, benefits, staffing, etc.

Moreover, as Saudi Arabia is aiming to transform the economy from oil-dependent to a service sector, the country is rapidly investing in hospitality infrastructure projects, including NEOM, the Red Sea Project, Qiddiya, etc. These developments are majorly aligned with the Saudi government's aim to welcome nearly 100 million visitors by 2030.

As the hospitality sector expands, the need for HR services to ensure the smooth running of hospitality operations is anticipated to rise, promoting the growth of Saudi Arabia's HR Outsourcing Market during 2024-30.

Saudi Arabia HR Outsourcing Services Industry Recent Development:

  • 2022: RAYA CX, signed a strategic partnership contract with Zain Saudi Arabia a communications and digital service company. Under this partnership deal, RAYA CX would provide outsourcing services to Zain Saudi Arabia.

Gain a Competitive Edge with Our Saudi Arabia HR Outsourcing Services Market Report

  • Saudi Arabia HR Outsourcing Services Market Report by MarkNtel Advisors provides a detailed & thorough analysis of market size & share, growth rate, competitive landscape, and key players. This comprehensive analysis helps businesses gain a holistic understanding of the market dynamics & make informed decisions.
  • This report also highlights current market trends & future projections, allowing businesses to identify emerging opportunities & potential challenges. By understanding market forecasts, companies can align their strategies & stay ahead of the competition.
  • Saudi Arabia HR Outsourcing Services Market Report aids in assessing & mitigating barriers associated with entering or operating in the market. By understanding market dynamics, regulatory frameworks, and potential challenges, businesses can develop strategies to minimize risks & optimize their operations.

Frequently Asked Questions

   A. The Saudi Arabia HR Outsourcing Services Market is expected to grow at a compound annual growth rate (CAGR) of 7.2% from 2024 to 2030.

   A. The complexity to manage compliance & labor regulations is expected to drive the Saudi Arabia HR Outsourcing Services Market during 2024-30.

   A. Some of the top companies in the Saudi Arabia HR Outsourcing Services Market include Sovereign Group, Nathan & Nathan, Miza Business Solutions, Tharwah, Respeed, IRSAA Business Solutions, The First National Human Resource Company (FNRCO), Etisal International, Marcom Arabia, Raya Customer Experience, etc.

   A. Hospitality is gaining substantial traction in Saudi Arabia's HR Outsourcing Services Market.

   A. The growing inclination of businesses towards shared HR outsourcing services for enhanced resource optimization is a key trend shaping the growth of the Saudi Arabia HR Outsourcing Services Market.

   A. The surging focus on cost efficiency aligned with rapid economic transformation is creating notable opportunities for the Saudi Arabia HR Outsourcing Services Market.

Saudi Arabia HR Outsourcing Services Market Research Report (2024-2030) - Table of Contents

 

  1. Market Segmentation
  2. Introduction
    1. Research Process
    2. Assumption
    3. Market Definition
  3. Executive Summary
  4. Saudi Arabia HR Technology Start-up Ecosystem, 2019-2023
    1. Entrepreneurial Activity
    2. Year on Year Funding Received
    3. Funding Received by Top Companies
    4. Key Investors Active in the Market
    5. Series Wise Funding Received
      1. Seed Funding
      2. Angel Investing
      3. Venture Capitalists (VC) Funding
      4. Others
  5. Saudi Arabia HR Outsourcing Services Market Labor Laws, Regulations & Licenses
  6. Saudi Arabia HR Outsourcing Services Market Dynamics
    1. Drivers
    2. Challenges
  7. Saudi Arabia HR Outsourcing Services Market Hotspot and Opportunities
  8. Saudi Arabia HR Outsourcing Services Market Outlook, 2019-2030F
    1. Market Size and Analysis
      1. By Revenues in USD Million
    2. Market Share and Analysis
      1. By Services
        1. Payroll (Payroll Management, Loans & Other Benefits Processing, Payroll Master Data Management, Pension Administration, etc.)- Market Size & Forecast 2024-2030F, USD Million
        2. Benefits Administration (Health Insurance, Retirement Accounts, Vacations & Leaves, Employee Visa Processing Services, Employee Data Administration, etc.)- Market Size & Forecast 2024-2030F, USD Million
        3. Recruitment Process (Talent Acquisition, Recruiting, etc.)- Market Size & Forecast 2024-2030F, USD Million
        4. Learning Services (Talent Development & Management, Employee Collaboration & Engagement, etc.)- Market Size & Forecast 2024-2030F, USD Million
        5. Multi Process Human Resource (HR Tools, Workforce Planning & Analytics, Budgeting, Integrated HR Services, etc.)- Market Size & Forecast 2024-2030F, USD Million
        6. Others (HR consultancy etc.)- Market Size & Forecast 2024-2030F, USD Million
      2. By End User
        1. Oil & Gas- Market Size & Forecast 2024-2030F, USD Million
        2. BFSI- Market Size & Forecast 2024-2030F, USD Million
        3. Hospitality- Market Size & Forecast 2024-2030F, USD Million
        4. Healthcare- Market Size & Forecast 2024-2030F, USD Million
        5. IT & Telecom- Market Size & Forecast 2024-2030F, USD Million
        6. Public Utilities (Aviation, Infrastructure Facilities, Ports, etc.)- Market Size & Forecast 2024-2030F, USD Million
        7. Others (Education Institutions, etc.)- Market Size & Forecast 2024-2030F, USD Million
      3. By Region
        1. Central
        2. East
        3. West
        4. South
      4. By Company
        1. Market Share
        2. Competition Characteristics
  9. Saudi Arabia HR Outsourcing Market Strategic Imperatives for Success & Growth
  10. Competitive Outlook
    1. Company Profiles
      1. Sovereign Group
        1. Business Description
        2. Product Portfolio
        3. Strategic Alliances or Partnerships
        4. Recent Developments
        5. Financial Details
        6. Others
      2. Nathan & Nathan
        1. Business Description
        2. Product Portfolio
        3. Strategic Alliances or Partnerships
        4. Recent Developments
        5. Financial Details
        6. Others
      3. Miza Business Solutions
        1. Business Description
        2. Product Portfolio
        3. Strategic Alliances or Partnerships
        4. Recent Developments
        5. Financial Details
        6. Others
      4. Tharwah
        1. Business Description
        2. Product Portfolio
        3. Strategic Alliances or Partnerships
        4. Recent Developments
        5. Financial Details
        6. Others
      5. Respeed
        1. Business Description
        2. Product Portfolio
        3. Strategic Alliances or Partnerships
        4. Recent Developments
        5. Financial Details
        6. Others
      6. IRSAA Business Solutions
        1. Business Description
        2. Product Portfolio
        3. Strategic Alliances or Partnerships
        4. Recent Developments
        5. Financial Details
        6. Others
      7. The First National Human Resources Company (FNRCO)
        1. Business Description
        2. Product Portfolio
        3. Strategic Alliances or Partnerships
        4. Recent Developments
        5. Financial Details
        6. Others
      8. ETISAL International
        1. Business Description
        2. Product Portfolio
        3. Strategic Alliances or Partnerships
        4. Recent Developments
        5. Financial Details
        6. Others
      9. Marcom Arabia
        1. Business Description
        2. Product Portfolio
        3. Strategic Alliances or Partnerships
        4. Recent Developments
        5. Financial Details
        6. Others
      10. Raya Customer Experience
        1. Business Description
        2. Product Portfolio
        3. Strategic Alliances or Partnerships
        4. Recent Developments
        5. Financial Details
        6. Others
      11. Others
  11. Disclaimer


Saudi Arabia HR Outsourcing Services Market Segmentation