Riyadh promotes employment of Saudi citizens
Saudi Ministry of Labour grades firms according to its ratio of Saudis in their workforces.
Changing course. A Saudi man walks past a sign that reads “Saudi employees are wanted.” (Reuters)
2017/03/26 Issue: 99 Page: 9
Riyadh/Dubai - Saudi Arabia plans to tighten restrictions on foreign workers to pressure companies into hiring more Saudi citizens, government sources have said.
The new policy is designed to help the conservative kingdom achieve one pillar of its economic reforms launched last year: Reducing Saudi unemployment from the current 12.1% to 9% by 2020.
But by making it harder for firms to employ low-paid foreign workers, the policy will raise costs and potentially complicate other aspects of the Saudi reform drive, such as developing private-sector businesses and diversifying the economy beyond oil.
The new rules could have a huge impact on a large segment of Saudi residents. There are currently about 12 million foreigners working in Saudi Arabia, many of them doing the strenuous, dangerous and lower-paid jobs shunned by the 20 million Saudi citizens. About two-thirds of Saudi workers are employed by the public sector.
Under a programme launched in 2011, the Saudi Ministry of Labour grades firms according to its ratio of Saudis in their workforces. Companies with higher ratios get preferential treatment when obtaining visas for foreign workers or licences; those in lower categories face penalties.
Under the new policy, construction firms with between 500 and 2,999 workers would have to employ 100% Saudis to be in the top “platinum” category; if they employ 10%, they are rated “lower green”. This compares to current levels of 16% for platinum and 6% for lower green.
In the retail sector, a large company’s current percentages are 35% for platinum and 24% for lower green. This would rise to 100% for platinum and 35% for lower green, according to an official document seen by Reuters.
Similar policies will be implemented in many other sectors, according to the document, which lists more than 60 industries in which restrictions will be applied.
Some change is already occurring in Saudi employment practice, with many citizens now working as cashiers and sales people in retail shops — the sort of jobs previously seen as undesirable. But there is still a scarcity of Saudis willing and qualified to work in the construction sector.
The new policy has been approved by Labour Minister Ali bin Nasser al-Ghafis, the sources said. It is scheduled to take effect on September 3rd, according to one source speaking on condition of anonymity because an official announcement is yet to be made.