Talent Management Challenges in a Knowledge Economy: An...
Transcript of Talent Management Challenges in a Knowledge Economy: An...
Journal of Emerging Issues in Economics, Finance and Banking (JEIEFB)
An Online International Research Journal (ISSN: 2306-367X)
2018 Vol: 7 Issue: 1
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Talent Management Challenges in a Knowledge
Based –Economy: An analytical Study of Saudi Banks
Alharbi, S. Hamed, Tabuk University, Kingdom of Saudi Arabia.
E-mail: [email protected]
Morsi, N. Mohamed,
Tabuk University, Kingdom of Saudi Arabia. E-mail: [email protected]
___________________________________________________________________________________
Abstract
The Saudi economy is heading towards a knowledge economy. Therefore, the current study
focuses on determining the challenges facing the application, and human resources
management functions of talent in a knowledge-based economy. Accordingly, the current
study focuses on the employees' perceptions of the challenges and obstacles facing and
impeding the implementation of talent management if Saudi banks. Also, the study focuses on
the practical recommendations to cope with such challenges and overcome them in order to
enhance economic and social development. The main objective of the present study is to test
three hypotheses developed from the review and analysis of relevant literature. Examining
data from twelve Saudi banks and 140 employee and manager, show significant differences in
the challenges of talent management across Saudi banks. The current study also shows that
talent management challenges are classified into bank level challenges and industry or sector
level challenges.
___________________________________________________________________________
Key Words: Knowledge Based –Economy, Talent, Talent management, Talent challenges and
obstacles
JEL Classification: M120
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1. Introduction
Studies on Talent Management (TM) have been conducted extensively in developed
countries (e.g. McDonnell, et.al. 2015, Collings, et.al. 2009, Capelli, 2008, Cooke, et al.
2014) where their findings have contributed to the body of TM literature. On the other hand,
scant research has been conducted in different context, especially in the Middle East and
particularly in Kingdom of Saudi Arabia (KSA), where it has its own factor that challenge the
implication of TM. This research comes to shed the light on the factors and issues that face
TM. The rapid changes in economic and social changes in Saudi market make it difficult to
understand the exact challenges. The Saudi economy is transferring into knowledge-based
economy (Transition Report to Knowledge Society in Saudi Arabia, 2014). Human resources
are an important pillar of the knowledge economy. This type of economy depends on the
element of knowledge and intellectual capital in achieving economic and social development.
It is clear that the foundation of knowledge economy is the educated and skilled human
resources (talents and competencies) on which this economy depends in the creation, sharing
and use of knowledge.
2. Talent, Talent Management and Talent Challenges
At the beginning we would start to articulate the meaning and definition of Talent
management (TM), which in turn allows to identify its challenges. When reviewing the
literature to search for definition of TM, many definitions came up, as it seems that the
definition itself is still controversial and there is no agreement among academics about one
clear meaning, which presents the first challenge of TM. That is because the definition will
lead to present the challenges. Some writer describe it as the practice of the traditional
functions of HR, while others go to describes TM as a newer faction of Human Resource
Management (HRM), where supporters of this perspective argue that all employees have
talent, and that organizations should use a good practice of HRM functions to utilize these
talent. This has been criticized for being undifferentiated and described as 'old wine in a new
bottle' (Lewis & Heckman, 2006).
Furthermore, Lewis & Heckman indicated it is still difficult to find a solid definition
because the phrase itself surrounded by many assumptions. Another perspective treated TM
as succession planning to ensure the continuality in the line of talented leaders. Other
approach perceives TM as the management of talented employees, which means focusing on
a few number of employees who demonstrate high potential or performance. From this
perspective, organizations have a certain criteria that has been used to identifying those who
are talented, then mange them through a set of HRM tools. Another approach to TM is that
referring to Human Resources Capital where recruiting, assessing, developing and
maintaining employees is an organizational goal (Capelli, 2008, Nair, 2009).
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Therefore, Mellahi, & Collings (2009) conclude in their review that the lack of precise
definition of TM contributes to the limitation of understanding TM which, in turn, influences
the definition of what are the TM practices and challenges. Talent can be divided in two parts,
one part goes to the managers who are willing to motivate and detect the talent of their
employees, while the second belongs to the employees themselves who would like to improve
their skills and to be dedicated at work. In addition, the organizational culture has a
contribution to employees for being talented. AlRuwaili (2013, p.9) notes that "while talented
people are those who have the energy and willingness to accept challenges, they also show
their abilities in creating distinctive features for the organization". Bhatnagar (2012)
indicates that TM is facing many issues and challenges around the globe, and that these
challenges can be sometimes overtaken, when managers' experience play crucial part to deal
with these challenges.
We believe that challenges of talent management differ from one region to another; from
one context to another; from one culture to another; and from one economic system to
another. That's because the situation is different, the circumstance are different, and vies
versa. This means that challenges of TM can be affected by the surrounded context, meaning
that social and cultural setting contributes to the challenges of TM. This implies that TM
challenges in developed countries differ from challenges at developing countries.
Consequently, the practice of TM has a considerable contribution in overcoming TM
challenges such as treating the staff in fair manner (Alamri, 2016). Furthermore, Egerova
(2013) indicates that the increased complexity and structural shifts of the economy and
workplace create significant talent management challenges.
The organization's strategies are also important in maintaining and retaining talented
employees (Koketso & Rust, 2012). They conclude that organizations that face such kind of
challenges of keeping employees must devise a strategy that ensures the retention of their
talented employees. Nair & Vidyeswari (2009) note that the success of organizations and
businesses depends significantly on successful TM. Accordingly, when organizations face
difficulties in finding, keeping, retaining, motivating and developing employees, HR
professional should keep focus on the following six points (Nair & Vidyeswari, 2009):
1. Attracting candidate who possess high quality of standard
2. Identifying and develop employees who achieve high performance
3. Retain employees who are valuable to the organization and top performers
4. Filling high-impact positions to support their company's growth
5. Keeping employees engaged and focused on high priority goals
6. Optimizing compensation to serve business objectives
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Beechler & Woodward (2009, p. 257) state that there are four significant factors that
affect the war of talent, these are: global demographic and economic trends; increasing
mobility of people and organizations; transformational changes to business environment skills
and culture; and finally growing levels of workforce diversity. They also indicate that each
organization faced their own unique challenges.
3. Literature Review
The current study focuses on the challenges and constraints facing the application of TM
in Saudi banks. According to the comprehensive body of studies on the broad subject,
especially the empirical ones, the authors have summarized these studies in (Table 1).
Previous studies on TM challenges have been conducted in several countries such as South
Africa, Poland, Slovenia, UK, China & India, Kenya, Saudi Arabia, Lebanon and Iran. These
studies have shown many different challenges in several areas. In South Africa, the study of
Koketso & Rust (2013) identified the challenges as the failure to retain talent, lack of
recognition of staff, problems of succession planning and management, and poor career
strategy. In the study of Poland (Skuza & McDonnell, 2013), the challenges were: selecting
individuals in the light of personal considerations, less interaction with higher management,
less acceptance of individual success, reliance on interpersonal relationships, less training
value, less acceptability, evaluation, lower participation in decision-making, lack of
performance management standards, and employee-biased evaluation. According to Cooke &
Wang (2014) comparative study of India and China, differences were found in the meaning
and TM systems between the two countries. This study examined the challenges under three
levels: the first is the individual level (such as the opportunistic behavior of talented
employees), the organizational level (e.g, short-term behavior of talent acquisition rather than
development) and finally the overall level. The study found that the problem of TM in both
countries is attributed to the shortcomings of the education system.
The Kenya study (Orwa and Njeri, 2014) have focused on the main challenge of TM in
the form of organizational culture, and other challenges such as career management, incentive
system, and work environment. In Alamri (2015 & 2016) studies applied to KSA in two types
of public and private organizations, the challenges were divided into challenges that apply to
both public and private organizations, challenges to public organizations and challenges to
private organizations only. In their study applied to Lebanese organizations, Hejas, et.al.
(2016) outlined strategies and practices for TM and challenges. In another study, applied to
the Iranian automobile industry, Tafti & Amiri (2017) show that there are four divisions of
challenges and obstacles, structural, environmental, behavioral, and managerial.
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Table 1: Previous Empirical Studies Addressing Talent Management Challenges (Source: The authors)
Results Sample Objective Country Author No.
Talent management challenges are: failure to retain key talent,
lack of employee recognition, succession planning and
management problems, poor career management strategies
20 senior managers in
Cape Town, South
Africa
To explore the perceptions of
senior management managers on
the challenges of talent
management in government
agencies
South Africa Koketso & Rust,
2012 1
1-There are significant differences in the intensity of the
challenges between domestic and foreign companies, and there
are differences according to the administrative level of
managers.
2-The main challenges are selection of individuals in the light
of personal considerations, less interaction with senior
management, less acceptance of individual success, reliance
on interpersonal relationships, less value for training, less
acceptance, short-term focus on evaluation, less participation
in decision-making, lack of management standards and biased
appraisal.
6 focus groups, each
consisting of 12
participants, selecting
an appropriate sample
of 100 managers in
various training
programs and from
58 local and foreign
companies
To identify the initial challenges
and constraints to effective talent
management in Poland and
compare them with studies of
Western countries and between
local and multinational companies
Poland Skuza et al. 2013 2
The authors identified challenges related to TM in transitional
countries based on APC characteristics.
560 students (219
Slovenian, 220
Polish, and 91
British.
To identify challenges of talent
management based on
anticipatory psychological
contracts
Poland,
Slovenia, UK Zupan, et al. 2013 3
1- There is a difference in the meaning of talent management
among managers in India and China,
2- There is a difference in talent management systems where
managers in China focused on financial incentives,
3- The most important challenges at the individual level, the
opportunistic behavior of talented employees,
178 directors from
various Chinese and
Indian companies in
terms of ownership
and ownership
To discuss the concept of talent,
talent management, talent
management practices, and talent
management challenges facing
companies in China and India
China and
India Cooke et al. 2013 4
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4-The key organizational issues are : Short-term behavior for
talent acquisition rather than development, weak leadership
and communication, unprofessional management behavior,
application of human resources management tools.
5- At the macro level, managers in both countries attributed
the problem of talent management to the inadequacy of the
education system in each country
The organizational culture is a major challenge to talent
management, as well as the impact of other career
management challenges, incentive system, and work
environment
A class sample
consisting of 61
respondents from
Radio Kenya from
159 countries
To look at how the culture of
organization, career management,
incentive system, and work
environment affect talent
management
Kenya Orwa & Njeri, 2014 5
There are three types of challenges found in public and private
, secondly in public organizations, thirdly in private
organizations
18 human resource
managers, 8 private
organizations , and 8
public organizations
To investigate talent management
challenges in public and private
organizations
Saudi Arabia Alamri, 2015 6
Public organizations need to improve its system and policies
regarding talented employee identification
18 human resource
managers in public
organizations
To investigate talented employee
identification in public
organization
Saudi Arabia Alamri, 2016 7
More details about which strategies and HR initiatives the
targeted professionals agreed on
30 organizations were
carefully selected and
filled by HR
professionals
To explore talent management
strategies and practices Lebanon
Hejase, et. al. 2016
, 8
A framework of obstacles and challenges in talent
management was classified into four categories that are
structural challenges, environmental , behavioral, and
managerial challenges
15 managers in
automotive industries
To identify the obstacles and
challenges of talent management
as well as its success factors
Iran Tafti & Amiri, 2017 9
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Based on the review and analysis of previous literature, the present study is based on the
development of the necessary measures to measure the challenges and obstacles of talent
management in Saudi banks as service organizations, so that they are multi-faceted and do not
measure one aspect or dimension of the challenges and be true in measuring variables. These
metrics will begin to measure the clarity of the concept of talent management and senior
management culture in terms of talent management, organizational and environmental
constraints, and finally a range of constraints on HR systems applied to talent management.
4. Research Problem
There is increased global attention to the issue of TM and competencies as a stage of
development in the field of HRM. Talent is an important human resource for the competitive
advantage of businesses. Despite this interest, there is a paucity of empirical studies and an
abundance of theoretical writings on this subject particularly in the Arabic context. In view of
the KSA's broad orientation towards the knowledge economy, the current study of TM is an
important and critical focus of the knowledge economy in the Kingdom. This raises a number
of questions, and the current study attempts to find answers to them. Therefore, the problem
of research can be formulated in the following questions:
1. What are the challenges and obstacles facing the application of talent and
competency management in Saudi banks?
2. Do the challenges and obstacles facing the application of TM vary across Saudi
banks?
3. Are there statistical differences in the challenges of TM depending on the
personal, social and functional background?
5. Research Objectives
This research aims to explain the meaning of talent and talent management and their role
in contributing to the development of the knowledge economy in KSA. The second objective
is to determine the quality and level of challenges and constraints facing the application of
talent management in Saudi banks and knowledge of the interrelationship between them.
Finally, suggesting solutions and proposals to overcome these challenges in order to achieve
economic and social development in the Kingdom.
6. Hypotheses Development
In light of the review of the results of previous studies and the conclusions reached, the
current research hypotheses can be formulated as follows:
First Hypothesis (H1): Positive correlations with significant statistical significance are
expected between talent management challenges.
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Second Hypothesis (H2): Significant differences in talent management challenges are
expected to occur in different banks.
The third hypothesis (H3): It is expected that there are significant statistical differences in
talent management challenges depending on the personal, social and functional variables of
study.
7. Research Methodology
This part of the study includes the composition of the research sample, data collection,
and measurement of the research variables.
7.1 Sample Composition and Data Collection:
The current study focused on the banking sector as one of the most important economic
sectors in KSA and the most influential in the knowledge economy adoption in the Kingdom.
Therefore, the current study applied to all 12 branches of Saudi banks operating in Tabuk
region. The list of banks included Al Rajhi, Bank, Al-Ahli Bank, Riyadh Bank, Saudi
Investment Bank, Albalad Bank, Arab National Bank , Al'iinma Bank, French Saudi Bank,
Hollandi Saudi Bank, British Saudi Bank (SABB), Samba, and Al-Jazira bank . As for the
sampling units, a random sample of the employees of these banks was selected. They were
estimated at 140 employees, administrators, managers and various levels of management to
identify their perceptions about the challenges of talent management in the banking sector
operating in KSA (Table 2).
Table 2: Respondents Sample Characteristics
%Percent Frequencies Sub-cluster Respondents
Characteristics
53% 75 20-30 years
1-Age
37.6% 53 31-40
7.1% 10 41-50
0.7% 1 51 and more
98.6% 139 Total
88.7% 125 Administrator
2-Job Title 10.6% 15 technical
0.7% 1 Others
100% 141 Total
6.4% 9 Top management
3-Current Job 24.8 35 Middle management
58.9 83 First supervisory level
86% 127 Total
42.6% 60 Less than 5 years
4-Experience
31.2% 44 More than 5-Less than 10 years
14.9% 21 More than 11-Less than 15 years
9.9% 14 More than 15 years
98.6% 139 Total
69.3% 97 Human Resources Mg.
5-Department
responsible for
human affairs
17.0% 24 Personnel Mg.
3.5% 5 Personnel Affairs Mg.
9.9% 14 Others
99.3% 140 Total
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19.1% 27 Non 6-Attending
Training programs
19.1% 27 One program
15.6% 22 Two programs
46.1% 65 Three or more than 3
100% 141 Total
12.8% 18 Secondary school or Less
7-Educational level
39.7% 56 Diploma between secondary
school and University
47.5% 67 University graduates
100% 141 Total
A carefully constructed questionnaire, which was originally developed in Arabic, was a
research tool to collect data. The questionnaire consisted of two sets of information: the
personal data collection of the researcher and another group containing the challenges of
talent management.
7.2 Measurement of Variables
Despite the many definitions of TM in many writings, for the purposes of the current
research it can be defined as follows: "A range of functions and activities that include
attracting, selecting, training, planning career progression and maintaining the talented,
Outstanding Performance". A questionnaire was designed to measure talent management
challenges. The questionnaire included the following variables and elements. The final
questionnaire included 25 questions as follows: The first group of variables included 7 items
such as age, current job title, current job, duration of experience, name of department that
handles personnel and employees of the bank, number of training courses obtained in the field
of human resources, and finally the level of education. The second group of challenges
questions for TM and Competencies in Saudi Banks and this part of the questionnaire
included 18 questions to measure the following challenges on the five-point Likert scale:
(A) The clarity of the concept of TM
(B) The Bank's senior management commitment to the culture of TM.
(C) Organizational challenges.
(D) Environmental challenges.
(E) Challenges related to selection systems, incentives and training.
(F) Performance evaluation challenges.
8. Results
The results of the present study can be divided into three parts. The first deals with the
results of descriptive statistical analysis and the second deals with the results of the reliability
analysis and the validity of the measurements, while the third deals with hypotheses testing.
8.1 Descriptive Statistics Analysis:
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Table (3) summarizes the results of descriptive statistical analysis of averages and
standard deviations of TM challenges applied to Saudi banks under study.
Table 3: Means and Std. Deviations of the Major Components and Questionnaire Items
Std.
Deviation
Mean Questionnaire items Major
components 0.999 3.158 F1 Descriptive Statistics: Factor 1:
Bank level
challenges 1.234 3.350 10. Selecting people based on
personal consideration
1.197 3.235 11. Top level personal biases
when doing talent performance
appraisal
1.192 3.128 12. Losing criteria and tools to
evaluate talent objectively
1.245 2.985 13. Direct communication
barriers to exchange
information among
1.213 3.157 14. Insufficient recognition and
talent acceptance and unfair
incentives bases
1.322 3.071 15. Senior managers feelings
that talents are threats
0.953 3.358 F2 Descriptive Statistics: Factor 2:
Banking
sector/industry
level challenges
1.194 3.275 18. In general, Talents limited
participation in decision
making
1.199 3.268 20. Saudi banks lack a new
culture to manage talent and
competencies
1.168 3.398 22. The lack of clarity of the
terms of talent and talent
management for practitioners
in the management of human
resources in Saudi banks
1.155 3.219 23. The scarcity of talent and
competencies of individuals in
senior management and
leadership positions in Saudi
banking activity
1.275 3.532 25. Increasing turnover
(leaving) work within Saudi
banks in general
The results of the factor analysis showed two factors of TM challenges in Saudi banks as
follows:
Factor 1: Challenges at the Bank Level, With A General Average of 3.16 of 5, Or 62.6%.
The Elements Of The Questions Were Descending As Follows:
Rank in descending order Score Elements of
questions
(1) 3.35 V10
(2) 3.23 V11
(3) 3.16 V14
(4) 3.13 V12
(5) 3.07 V15
(6) 2.98 V13
3.16 Average
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Factor 2: Challenges at the Level of the Banking Sector, With a General Average of 3.36 of 5,
Or 67.2%. The Elements of The Questions Were Descending As Follows:
Rank in descending order Score Elements of
questions
(1) 3.53 V25
(2) 3.40 V22
(3) 3.27 V18
(4) 3.27 V20
(5) 3.22 V23
3.16 Average
Overall, the challenges for the banking sector as a whole (3.36) were higher than the
Bank's (3.16).
8.2 Reliability and Validity of Scales
The validity and reliability of the parameters used in the present study were analyzed
using the correlation coefficients between the elements of the scale used (Table 4), the Alpha
Cronbach analysis, the exploratory factor analysis (Table 5) and the Confirmatory factor
analysis (Tables no. 6, 7).
8.2.1 Correlations Matrix
The internal consistency of the elements of the study instrument has been verified and the
extent of the association of these elements of the constituent questions by finding correlation
coefficients using the Pearson correlation coefficient. Table 4 presents correlation coefficients
of eleven challenges items. The pairwise correlations were positive and significant at the 0.01
level in all items. Seven of questionnaire items were excluded for the non-significant
correlation coefficients. Table 4 indicates that H1, the first hypothesis of significant statistical
correlations between TM challenges in Saudi banks has been achieved.
Table 4: Correlations Matrix
V25 V23 V22 V20 V18 V15 V14 V13 V12 V11 V10
1 V10
1 0.69 V11
1 0.71 0.60 V12
1 0.66 0.61 0.49 V13
1 0.65 0.68 0.60 0.64 V14
1 0.44 0.49 0.47 0.50 0.39 V15
1 0.41 0.48 0.41 0.44 0.42 0.46 V18
1 0.64 0.43 0.48 0.48 0.53 0.48 0.34 V20
1 0.55 0.52 0.54 0.43 0.43 0.53 0.53 0.40 V22
1 0.65 0.63 0.49 0.44 0.47 0.54 0.59 0.54 0.44 V23
1 0.60 0.47 0.54 0.32 0.33 0.32 0.31 0.41 0.41 0.34 V25
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** All Correlations are significant at the 0.01 level
8.2.2 Exploratory Factor Analysis (EFA)
EfA with varimax rotation was performed on TM challenges in order to extract the
dimensions of challenges construct for the full sample of respondents. Table 3 shows the
results of EFA for TM challenges. Table 5 indicates that the EFA on the full set of 11 TM
challenges yielded two factors with eigen- values greater than 1.
Table 5: EFA of TM Challenges
Cronbach's
alpha
Cumulative
%
% Variance
explained
Eigen-
value
Factor
loads
Factors
0.891 34.419 34.419 6.173 Factor 1: Bank level
challenges
0.798 Q10: Personal
matter's
selection
0.786 Q11:Performance
appraisal biases
0.777 Q12: Losing criteria
to evaluate talent
0.750 Q13: Direct
communication
barriers
0.813 Q14: Insufficient
recognition of talent
0.490 Q15: Talents are
threats
0.859 65.679 31.669 1.073 Factor 2: Banking industry level
challenges
0.636 Q18: limited
participation in
decision making
0.779 Q20: Lack of talent
mg. culture
0.733 Q22: Unclear talent
mgt.
0.758 Q23: The scarcity of
talent
0.776 Q25: Increasing
turnover
Based on the item loading, these two factors were respectively labeled as bank level
challenges (BLC), and banking sector/ industry level challenges (BIC), which explained
65.67 per cent of the observed variance. The Cronbach alpha values of reliability for
underling factors are 0.891, and 0.859 respectively, suggesting satisfactory level of construct
reliability which is greater than 0.7.
8.2.3 Confirmatory Factor Analysis (CFA)
This step is also known as testing the measurement model where the construct of TM
challenges was tested using the first order confirmatory factor model to assess construct
validity using the method of maximum likelihood. The results consistently supported the
factor structure for challenges structure as discussed earlier in the EFA step. The confirmatory
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factor diagram using Amos is shown at figure 1. The CFA technique is based on the
comparison of variance –covariance matrix obtained from the sample to the one obtained
from the model. The measurement model results at the aggregate level for TM challenges are
presented in Table 6. The figures in table 6 exhibit the standardized regression weight
between each manifest variable and its corresponding latent variable. All the observed
variables have a standardized loading of more than 0.5 attesting the convergent validity of the
measure. The goodness of fit statistics for TM challenges is shown in Table 7. The resulting
measurement models and their respective observed variables for challenges construct indicate
an acceptable fit. The values of CFI, IFI, NFI, RFI, and TLI are highly satisfactory, as they
are very close to a value of 1.0, which denotes a perfect fit. In addition, the values of x2/df
ratio should be within the range of 0-5 where lower values indicating a better fit.
Fig.1: The Confirmatory Factor Path Diagram
Table 6: CFA of TM Challenges
Standardized regression weights Factors and items
Factor 1: Bank level challenges
0.741 PM : Personal matter's selection
0.830 PA : Performance appraisal biases
0.854 LC : Losing criteria to evaluate talent
0.762 DC : Direct communication barriers
0.793 IR : Insufficient recognition of talent
0.599 TT : Talents are threats
Factor 2: Banking sector/ industry level challenges
0.671 LP : limited participation in decision
making
0.784 LT : Lack of talent mg. culture
0.755 UT : Unclear talent mgt.
0.837 ST : The scarcity of talent
TM
Challenges
Construct
DC
PM
IR
LP
LT
UT
F1
Bank level
challenges
F2
Industry
level
TT
IT
PA
LC
ST
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0.645 IT : Increasing turnover
Table 7: Goodness of Fit Statistic
𝐂𝐡𝐢 𝐬𝐪𝐮𝐚𝐫𝐞
/df
df 𝐂𝐡𝐢 𝐬𝐪𝐮𝐚𝐫𝐞 RMSEA TLI RFI NFI IFI CFI
1.970 43 84.725 0.08 0.924 0.857 0.907 0.952 0.951
8.3 Variance Hypothesis Testing
To test hypothesis, H2, H3, ANOVA analysis was used and it showed that:
(1) There are significant differences in the challenges of TM across the studied
banks, 11 of them with a level of 0.002 for the first factor, 0.005 for the second
factor of the challenges.
(2) There are significant differences in the challenges of TM according to the
current function of the respondents (top management, middle administration, first
supervisory level), with a significant level of 0.011, and zero.
9. Discussion and Conclusion
This study examines the challenges facing the application of TM among commercial
banks in KSA. The study showed two main types of factors that represent the challenges and
obstacles facing banks in applying TM. The first type of challenges and obstacles are internal
elements of the bank. The second type is external elements related to the nature of the
banking industry or the banking sector itself. The first type elements are insufficient
recognition of talents, choice according to personal considerations, biases in performance
assessment, lack of objective criteria for talent assessment, communication impediments. On
the other hand, there are factors related to the nature of the service sector itself, the most
important of which is the increase in the turnover rate, the weakness of TM culture, the
scarcity of talents, and the ambiguity of talent management itself.
As for the study hypotheses, differences were found in the challenges and obstacles of
TM with significant statistical significance across the studied banks. There were also
significant differences in TM challenges of significant statistical significance according to the
current job of the respondents.
9.1 Implications for Practice
The present study has been applied to an important service sector in KSA, the banking
sector, which is facing stiff competition for talents and competencies and rapid technological
and knowledge transformations. Talent or human capital is one of the most important factors
of its success and progress. The challenges facing talent management in Saudi society are
somewhat different from those in Western and European societies. In other words,
community cultures and organizational culture play a major role in shaping the practices and
Journal of Emerging Issues in Economics, Finance and Banking (JEIEFB)
An Online International Research Journal (ISSN: 2306-367X)
2018 Vol: 7 Issue: 1
2432 www.globalbizresearch.org
challenges of TM in developing societies, as well as in developed societies. To explain this,
Saudi society is traditional and conservative and traditional practices are applied to HRM. TM
is something new and requires changing the culture of banks related to traditional HRM
practices and switching to TM practices.
9.2 Limitations and Further Research
The present study was conducted only on Saudi banks operating in Tabuk region, which
may require further studies in other parts of KSA. The study makes a valuable contribution to
research in the knowledge based Saudi Economy, specifically the banking sector. This
research focused only TM challenges. Further studies also are needed to investigate the TM
practices and benefits in the same banking sector.
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