For a company that is looking to scale themselves in the MENA region, launching in the Saudi market can provide an excellent opportunity for the company to accelerate their growth. Expansion into one of the largest markets in the Middle East has many requirements and variables such as the process for hiring and talent requirements.
The hiring process for new employees is a long and arduous process for any company. It requires hours of diving into the available talent pool and filtering out the potential candidates. The cost of time and resources to the task make it essential that the final candidate chosen is the right one in order to avoid repeating the same process over again.
However, while the process for hiring talent remains basically the same all over the world, there are certain additional processes and requirements that need to be fulfilled in certain countries.
This article will go over some of the salient points that need to be kept in mind by companies when going through the hiring process in KSA such as:
- Improving standard of local talent
- Addressing local talent pool
Nitaqat, also known as ‘Saudization’ is a nationalization program launched by the government that makes it mandatory for Saudi companies to have a specified number of employees from among locals. The program has been launched in order to counter the rising local unemployment in the country, to counter the effect of foreigners holding key positions, lack of female workforce and to improve the overall skill level of locals.
According to the Nitaqat system, companies are graded according to a system of classification which ranks them into four zones. These zones are:
Any company within KSA that has more than nine employees is required to hire a specified number of local employees which depends on the category under which the company operates and the total number of employees in the company. Companies having less than ten employees are exempt from the zoning system but are still required to hire at least one local.
Companies are required to meet the Nitaqat requirements in order to be considered eligible for certain privileges, such as access to block visas for foreign workers, expedited immigration services, and flexibility in renewing or transferring work visas. Companies can fall under 4 bands (Red, Yellow, Green, Platinum) based on which they receive their privileges. It is ideal to fall under the green/platinum category as there are various visa benefits that one can enjoy, whereas falling within the red category has restrictions such as no visa renewals or issuance. According to the Ministry, firms that remained in the Red category would find it restrictively difficult to remain in business.
Improving standards of local talent
The new rulings are in line with the Vision 2030 of the Kingdom and also to make room for the younger generation of locals who are coming back after studying abroad.
Infact, under the auspices of the King Abdullah Scholarship Programme (KASP), which is administered by the Saudi Arabian Cultural Mission (SACM) within the ambit of the Ministry of Education (MOE), more than ten thousand students have gone abroad for higher studies on scholarship. For the last five years, Saudi Arabia has consistently been ranked in the top five countries in terms of sending students to the US for higher studies. In addition, the Kingdom also ranks high amongst countries sending students to Canada and the UK. According to recent studies, half of the KSA’s local population is under the age of 25 and more than 50% of university graduates are female
This has led to a perceptible improvement in the local talent pool and highlighted the need for more vacancies and a welcome increase of females in the workforce within the country. According to the latest estimates by the Human Resources Development Fund, there has been an addition of 121,000 new Saudi employees in the private sector in the first quarter of 2021. Additionally, according to the findings of the National Labor Observatory in 2021, Saudization in the private sector grew to 22.75% in the first quarter as compared to 20.37% during the same period last year.
Specific roles reserved only for Saudis, according to Article 36 of Saudi labor law, there are 74 job categories which are reserved only for locals and no foreigner can be hired for those. These include:
- Director of Tourism
- Booking Clerk
- HR Manager
- Reservation Manager
- Customer Services Manager
However, there can be exceptions when a company can show a need/gap within the talent pool and show that there is no local to fill up the post. In those circumstances, they are allowed to hire a foreigner. But it is on a case to case basis.
Addressing the local talent pool
According to a recent study, where there has been an improvement in the talent pool, companies are still finding it hard to get talented locals to apply for non-traditional sectors which are not a part of their local culture. Currently there still exists a mismatch between the educational level and the skills required in the workforce which calls for more vocational training. These shortages are being met by expats and foreigners for now. However, with the changes laid down in the Vision 2030, experts believe that within 5-10 years, there will be a significant improvement of local talent in the workforce.
The Forward Career Accelerator is an AstroLabs initiative offering Saudi graduates early career opportunities in international companies and regional VC-funded startups expanding to Saudi Arabia. Designed for early career KSA nationals with 0-4 years of work experience, it provides a great opportunity for them to kick-start their career into a journey of fast growth and personal development.
There has been a positive development of late in the talent pool which was evidenced by the findings of the 8th Professional Exhibition organized by King Abdulaziz University in Jeddah recently. During the course of the event, it became clear that more and more students were willing to apply to companies that had previously not attracted much interest within the local population. Saudi students were now more seriously considering jobs and sectors that matched their skills and capabilities, statistically speaking 60% of the population in KSA are under the age of 60. They have a changed and evolved mindset, they want growth opportunities in order to make an impact.
If you’re looking to hire, reach out at firstname.lastname@example.org