Saudi Arabia: 80% of recruitment offices fail to meet regulations

Dubai: Saudi Arabia has reported that 80 percent of recruitment offices and companies operating in the Kingdom are non-compliant with regulations and lack comprehensive governance, according to the Ministry of Human Resources and Social Development.

The ministry said the situation has negatively impacted the Kingdom’s relations with countries that send workers to Saudi Arabia.

The announcement came in response to public feedback on the draft “Rules for the Practice of Recruitment and the Provision of Labor Services,” which the ministry recently posted on the Istitlaa public consultation platform. The feedback included concerns about the mandatory transformation of small recruitment businesses into companies.

The ministry said it conducted individual interviews with more than 170 recruitment office owners and chief executives to discuss the mandatory conversion.

Following a review of international best practices and workshops held with business owners, the ministry requested that these offices transition into small companies.

Since 2022, a total of 86 recruitment offices have been converted into companies, and the ministry said it has received more than 200 additional requests for conversion.

However, recruitment office owners have objected to the mandatory shift, saying it has forced many to exit the market due to high capital requirements and the need for bank guarantees. They argued that the continued presence of smaller offices had helped stabilize market operations and pricing.