Managing a myriad of entry-to-end of service employee compliances emerged as a major challenge for companies across sizes and sectors in the GCC region amidst a slew of labour law changes, opening up a huge business opportunity for new age Human Resources (HR) ventures offering ‘single window’ solutions to smoothen HR functions, sector experts told Arabian Business.
While tech-savvy HR ventures such as Cercli, Core Integra and PeopleStrong are making major headways in making inroads into the corporate HR sector in the UAE, Saudi Arabia and the wider region with their AI and ML-based ‘single point’ compliance management solutions, a host of international and regional companies and startups are said to be waiting in the wings to make a foray into the region.
The recent surge in the expat workforce, besides the introduction of several employee benefits and post-Covid-19 policy amendments are also prompting corporate majors across sectors to outsource a host of compliance and other HR functions to the tech-enabled HR platforms, industry insiders told Arabian Business.
The emergence of new ventures in the HR segment is also attracting a number of international investors, including Silicon Valley-based early-stage angel investors such as Afore to the Gulf region to cash in on the business potential.
“As a business we’ve seen 25 per cent month-on-month (MoM) growth this year,” Akeed Azmi, co-founder of Cercli, told Arabian Business.
“For us this is indicative of the growth within our clients’ businesses and their need to ensure that their workforce management solutions are able to support them in their efforts to hire, manage and pay their employees seamlessly,” he said.
Azmi said the accuracy of information or having “a single source of truth” is one of the largest issues most businesses face right now.
This includes data across every point in the employee journey – from hiring, onboarding to accurate payroll, leave management, end of service and gratuity.
Several companies in the UAE – as also in the wider region – faced huge governmental penalties for lapses on employee compliances, besides facing data losses and frauds in recent months.
Sector experts said the trend is fast catching up in the region in view of the combined effect of rapid digitisation of services, arrival of large numbers of expats, and new government regulations to ensure effective workforce management.
What this means is that businesses need to be able to keep up with all rules – old and new – at the federal and freezone levels, they said.
Data safety, privacy issues major challenges for UAE, Saudi companies
Sector experts said companies in GCC, especially in the UAE and Saudi Arabia which are making multi-billion investments to diversify into non-oil sectors and attracting global talents in large numbers, are increasingly facing serious issues around employee data safety and privacy.
This is because many of the companies still follow the manual mode for storing information in spreadsheets and often such information is shared through messaging apps or email trails.
Businesses in the region are also facing difficulty in keeping up with geography, nationality and freezone-specific labour laws.
“With platforms like ours, the new breed of HR firms is able to eliminate such challenges by factoring every requirement for businesses,” Mahesh Krishnamoorthy, Managing Director of Core Integra, told Arabian Business.
“So, our customer does not have to think twice,” he said.
David Reche, the other co-founder of Cercli, said their company deliberately focused on building an engineering-led team, allowing it to leverage its technical capabilities to solve some of the biggest challenges their customers face.
“Today we are not only removing data and privacy issues, but we are building a single solution to truly transform how entire workforces are managed by companies,” Reche told Arabian Business.
Industry insiders said talent will continue to move to the GCC in-line with the growing number of opportunities here.
The introduction of long-term golden and freelancer visas, a thriving real estate market, the diversification of economies and other trends have played a role in attracting professionals to move to the UAE and Saudi Arabia, they said.
More international investors are anticipated to back new age HR firms
Sector experts said the emergence of a number of HR-tech startups, besides the entry of several international and regional players into the region is expected to attract investors from around the world to the region.
Azmi said the Middle East continues to attract Western investors who are of late doubling down on startups in the region.
“While most international funds have focused on late-stage investments in the region, with Afore, we are extremely privileged to get a Silicon Valley firm to back us at this early stage as they recognise the untapped potential of the decade ahead of us,” said the co-founder of Cercli, which raised $4 million in a seed round early this month, led by Afore.
The funding deal with Cercli also marked Afore’s MENA debut, with the investment being allocated from its $150 million fund III.
The region’s influx of tech-savvy HR players and growing investor interest in the segment comes at a time when the global workforce management software sector is anticipated to grow to over $18 billion, according to estimates by Global Market Insights.
“We believe the market-maker upside potential for us is significant, especially on the back of strong economic growth, rapid digitalisation and the growing need for a single platform to unify fragmented legacy systems,” Cercli’s Azmi said.
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