Small steps: The long road ahead to meeting Saudi Unemployment goals
Yes Saudi is revamping, modernizing and opening up its economy to foreign and private investments, and yes there are more freedoms on every level of society.
Still, the kingdom’s hands are tied because of rampant unemployment.
Around 35% of young Saudis are suffering from unemployment, according to a study conducted by Naif University of Security Sciences in Riyadh.
Overall unemployment among Saudis is 12.8%.
Saudi vision 2030 target is 7%.
Getting there is difficult.
Logistics and education
“Around 34.6% of unemployment was blamed on poor distribution of jobs in small cities and villages and 35.6% was blamed on Saudi graduates’ inability to cope with job market needs,” the study said.
Researcher Mohammed Al-Aufi said in a media statement that salaries and job security would need to improve in the private sector to encourage citizens.
“Many Saudis are not interested to work in the private sector because of low salaries,” he said adding “the culture of shame also played a role as most Saudis refuse to take up (low paying) jobs as they fear it would affect their image in society.”
“Moreover, most young men and women living in villages and small cities are not ready to move to major cities to take up available jobs.”
Can Saudi authorities force the hand of the private sector?
As part of the Kingdom’s Vision 2030 strategy, the Ministry of Labour and Social Development (MLSD) amended its existing Saudization (Nitaqat) system for organizations by increasing the mandatory employment ratio of Saudi nationals to expatriate employees in the organizations’ local workforce.
According to Ernst & Young, the new Nitaqat grading program became effective from September 2017 and it is being implemented amidst reports that almost 60% of work visa (Iqama) applications for foreign nationals were rejected in 2016 to encourage local hiring.
The Saudi Gazette also reported that 4 new employment support programs, in addition to Saudization were introduced, including a Freelance Program, Part-time Job Program, working women’s ‘Children Hospitality Program’ called ‘Qurrat’, and Program for transportation of working women called “Wusool”.
On January 7, Ministry of Labour and Social development (MLSD) has announced that only Saudi citizens will be able to work in car rental offices from mid-March 2018.
In a statement to Saudi Press Agency, MLSD spokesperson Khaled Aba Al-Khail said the government aimed to promote the “productive and sustainable” localisation of the labour market.
“The ministry will provide electronic training programmes to qualify young Saudi workers of both genders for the sector and offer the use of a national work portal to connect employers with job seekers,” he was quoted as saying.
The statement said that a joint inspection team will monitor car rental establishments for violations and issue fines that will double in the case of repeated offences.
Also, more than half of Saudi Arabia’s administrative regions have announced in December 2017 their commitment to the Saudization of the gold and jewellery market, according to the Saudi Press Agency.
Of the kingdom’s 13 regions, those of Qasim, Tabuk, Najran, Baha, Asir, Northern Border, and Jazan have said they will hire and train Saudis to work in stores.
A media statement reveals that there were an estimated 35,000 expatriates who work in 6,000 gold and jewellery shops across the country in December 2017.
Moreover, in April 2017 Saudi labour minister issued an order to restrict employment in shopping malls to Saudi nationals.
While Saudization is one move to restrict employment to Saudi nationals in the kingdom, removing the ban for driving women will lead to an increase in employment among Saudi women.
This step aims to lift the employment rate of women from 22 per cent presently to 30 per cent, according to CNN Money.