New system to promote Saudization in the private sector

Riyadh: Following years of unsuccessful efforts to have the private sector hire more Saudis, the Saudi Ministry of Labour announced new measures to replace expatriate workers with Saudis in this sector.

The new mechanism consists of category packages and includes penalties to be applied against companies that fail to meet the Saudization set rates, said Labour Minister Adel Faqih at a press conference.

The new system, in which companies would be classified into green, yellow and red categories, will replace the regime where Saudization is based on percentage. The previous system stipulates that every year the company shall Saudize 5 per cent of its foreign workers. Companies with high rate of hiring of Saudis will be placed on green category while the ones with less rates will be put on yellow and red categories, respectively. The minister described the old Saudization regime as ‘negative' as it fails to encourage the private sector to hire more Saudis.

This new scheme comes after a recent royal decree by the King including granting 2,000 riyals for the unemployed Saudis and setting a minimum monthly wage of 3,000 riyals for all employed nationals.

"Our field crews would intensify their efforts to ensure that private sector companies adhere to the Saudization standards set by the ministry," Faqih pointed out.

The Saudi Minister of Labour pointed out that companies in the green category would be granted incentives, while the ones in the red category would be given a time limit to change the situation before being prevented from renewing work visas of their expatriate workers. He added that details of additional incentives given to Saudization-friendly green companies would be announced on June 11 on the website of the ministry.

"If we were able to absorb more than 8 million expatriate workers in the labour market, how can we not able to absorb one-tenth of them who are male and female Saudis job seeker?" the minister asked. He underlined his ministry's commitment to make genuine progress in term of jobs nationalization. "Providing jobs for national cadres is an irreversible duty and a national necessity and not a choice," the minister pointed out.

Official figures indicate that there are 448,000 Saudis of both sexes looking for jobs, though unofficial figures put the number higher than this. There are more than 8 million expatriate workers in Saudi Arabia, mostly in the private sector.