Inspiring Change: How Middle Eastern Startups Are Shaping the Future of HR
British Chamber of Commerce Dubai (BCCD)
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Innovative HR technology startups are driving changes in the way companies across the MENA region are operating, helping to redefine workplace practices, and playing a vital role in fostering inclusive, engaged and productive teams.
This article delves into the influence of these companies and highlights how they are setting new benchmarks that cater to local and global demands in the region.
The Middle East's HR technology market is projected to grow at a robust rate over the next few years, driven by a range of factors:
Sector Growth?
MENA software spending is expected to record double-digit growth of 12.3% in 2024 , followed by IT services spending, growing at 11.1% ( Gartner ).
The global HR technology market is projected to grow from $23.98 billion in 2022 to $39.90 billion by 2029 .?
Digital Transformation and Employee Well-being?
Businesses are increasingly implementing organisation-wide digital transformation programs as part of their corporate strategy to optimise costs, be more responsive, become an employer of choice, and stay competitive and relevant.
Within the HR function, digital tools can automate tasks, streamline recruitment processes, and offer data insights that enable better decision-making, while AI and machine learning technologies can provide predictive analytics and more efficient talent management.
In particular, the growing well-being digital solutions companies are providing a wealth of wellness programs such as digital physio, gym memberships, mental health resources and digital and flexible work options that help create a more healthy, engaged workforce, promoting employee satisfaction and increasing productivity and growth.
Seventy percent (70%) of GCC companies plan to invest in HR tech to improve their talent management capabilities according to our research findings thus highlighting how important automation has become in HR processes.
Economic diversification and workforce growth?
As the regional economies continue to diversify away from the traditional oil and gas industries, and into a range of new more innovative sectors, such as technology, tourism, finance and healthcare, there has been a corresponding demand for more sophisticated technology-driven HR solutions.
At the same time, younger, more tech-savvy workforces tend to expect efficient and professional HR support, requiring companies to invest in technologies that improve the employee experience.
In addition, Government policies promoting digital innovation and smart city projects further increase HR technology adoption, while incentives for a knowledge-based economy encourage the use of technology across all business functions, including HR.
The demand for HR tech solutions is primarily fueled by the need for efficient talent management, improved employee engagement, and streamlined HR processes. According to a recent survey, 78% of Saudi companies plan to increase their investment in HR technology over the next three years.
Additionally, the Kingdom's ICT strategy aims to create over 25,000 jobs in the sector and increase the IT market size by 50%, further driving the demand for the outsourced HR tech market .
Several startups and corporations in the Middle East have capitalised on this growth and made significant strides in the HR tech space. Notable examples include:
The Regional Impact of HR Tech Startups
The contributions of HR tech startups in the Middle East are multifaceted, addressing various challenges and introducing new opportunities for businesses and employees alike.
Efficiency through Automation: Automated payroll, attendance tracking, expense management and records management help to increase efficiency and accuracy, reduce costs and boost productivity.
Enhanced Employee Experience: Online platforms simplify access to HR services, helping to improve employee engagement and retention.
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Data-Driven Decision Making: AI and data analytics enhance hiring and performance management, optimising talent strategies.
Local Compliance: Companies such as Auxilium and ZenHR ensure compliance with local employment laws and regulations, reducing risk, building trust and allowing companies to scale faster.?
Scalable Solutions: From small businesses to large enterprises, startups offer customisable HR solutions that meet diverse needs across industries.
The Future of HR Tech in the Middle East
The future of HR tech in the Middle East holds promise with key trends shaping the industry:
AI and Machine Learning: Expect increased adoption in HR tech to streamline recruitment, boost employee engagement, and enhance performance management, led by startups embracing these technologies.
72% of Middle Eastern CEOs expect AI to have a major impact on their businesses within the next five years, indicating the growing importance of artificial intelligence technologies for digital transformation in this region.
Employee Well-Being: Organisations are prioritising employee health, wellness, and work-life balance. HR tech startups focusing on these areas, like those in the Middle East, are gaining traction.
Integration with Business Systems: Seamless integration with ERP and CRM platforms is crucial for improving data flow and gaining comprehensive organisational insights. Startups facilitating such integrations will be highly sought after.
Global Expansion: Middle Eastern startups are poised to expand internationally, leveraging solutions that address global HR challenges and open new market opportunities.
According to a global survey by? Eightfold AI, nearly 70% of these HR professionals say they are excited or optimistic about AI in HR, and almost 40% of them are already using such solutions to some extent ? (source: Spyrosoft )
Support and Investment: Governments, investors, and accelerators are increasingly backing the Middle Eastern startup ecosystem, which is essential for the growth and sustainability of HR tech startups. Continued investment and talent nurturing will drive further innovation in the sector.
Conclusion
People-tech driven startups are changing the MENA economic landscape, with a dynamic and rapidly growing market, the Middle East is becoming a hub for innovative HR tech solutions
HR tech embraces a large set of companies, from employee well-being to expense management and payroll processing. We are seeing a number of companies prove their relevance to employers and employees across the HR spectrum.??
The need for digital, scalable solutions for HR services will only increase across the GCC as new industries take hold and more and more people move to the region.?
It is important that employers take up such solutions proactively to provide a responsive and employee-centric workplace, allowing them to not only optimise their HR functions but also to become an employer of choice.?
For More Information and Advice
If you require help or advice about managing your workforces in the GCC, you can contact the Auxilium team at: https://www.auxiliumservices.com/ .
auxilium specializes in supporting organisations across the GCC, providing bespoke EOR and HR solutions that are empowered by Auxilium’s Talent Management Platform, a cloud-based HR solution, specifically designed for businesses operating across the GCC.