Labour minister gets tough on Saudisation

26 January 2012

Companies could lose work permits if Saudi nationals are not hired

Saudi Arabia will revoke licences of private companies that fail to comply with Saudisation plans, the kingdom’s labour minister said on 23 January in Riyadh.

“We cannot continue to guarantee work permits if you do not commit to the national employment plan,” Adel Fakieh told the annual Global Competitiveness Forum.

One of the ministry’s main objectives for 2012 is to increase hiring of Saudi citizens by providing subsidies to private sector employers. There are currently eight million expatriates working in Saudi Arabia. At the end of 2010, there were four million Saudi nationals working in the kingdom.

The objective is part of the ministry’s Nitaqat initiative, which aims to increase the number of Saudi citizens working in the private sector. Previously, businesses in the kingdom were required to comply with a blanket quota of 30 per cent Saudi employees. With the new Nitaqat system, private sector companies will be ranked based on a number of different criteria. 

Saudi job creation targets
Source:  Ministry of Labour and Social Affairs

“The new Nitaqat system only compares companies to their peers of the same size and the same economic activity and based on actual rates achieved. The excuse that ‘my business is different’ is therefore no longer valid,” Fakieh said.

The Nitaqat scheme will require employers to open bank accounts for all employees so that the ministry can monitor salaries to ensure fair pay to Saudi employees. “A company will not be allowed to hire several low-paid workers such as security guards just to increase the number of employees,” Fakieh said.

The kingdom is aiming to create three million job opportunities for Saudi nationals by 2014 and six million by 2030.

The ministry is also planning to open 50 job centres dedicated to women before the end of the year. “We have started introducing specific initiatives, for example, restricting work to Saudi women in shops specialising in women’s goods. We can limit possibilities only to Saudis or Saudi women to create economic conditions that makes employing Saudi women the only alternative for employers,” said Fakieh.

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