Saudi Arabia’s job market is largely shaped by the push for “Saudization”, a colloquial term for a movement that is officially called “nationalisation”. Part of this push is a set of regulations called Nitaqat, which falls under the jurisdiction of the Ministry of Labour and Social Development, and requires organisations operating in Saudi Arabia to maintain certain percentages of Saudi nationals in their workforce.
The levels depend on the sector and the size of the company – and the percentages go up in phases over time. Sometimes the mandates require companies to ultimately achieve a workforce composed only of Saudi nationals. Companies that fail to meet the requirements at any phase will not be allowed to renew work permits for their foreign employees, and will not be able to open new facilities.
Nitaqat is part of the effort to fight unemployment and underemployment of Saudi nationals. According to Hanaa Almoeibed, research fellow at the King Faisal Center for Research and Islamic Studies, 58% of the workforce is non-Saudi. Although that figure is lower in the IT sector, it is still over 50%.
The problem is not a lack of jobs – it is a lack of motivation. Saudis are used to cushy government jobs – Almoeibed estimates that about 66% work in the government. While Saudis may be reluctant to work in the private sector, as the country moves towards an economy less dependent on oil revenue, people are having to become more competitive. The private sector does not offer jobs for life – and people who don’t perform don’t get bonuses and promotions.
The changing economy has created a vicious circle: the more that Saudi nationals stay out of the job market, the more they get behind in skills, and the further they get behind in skills, the harder it is for them to compete in an open jobs market.
Jobs in IT
Fortunately, the IT sector is an area where there is an abundance of Saudis already well suited to the work. That is because the universities have been investing heavily in curricula to graduate Saudis with skills in computer technology for many years.
It is also because a lot of international companies – including Cisco, Microsoft and IBM – have been investing in hiring and training Saudis for a long time now – and some of them move into government after gaining experience in the private sector.
For example, Abdullah Alswaha, the current minister of communications and technology, was managing director of Cisco Saudi Arabia for 12 years.
At the recent LEAP22 conference in Saudi Arabia, Alswaha announced more than $6.4bn in new technology and startup investment. The funds will be used to transform Saudi Arabia into an innovation-based economy that will require IT skills in almost all sectors.
“The job market today in IT is quite aggressive in hiring Saudis,” said Mansour Abdulghaffar, managing partner at Amrop Saudi Arabia, a leading Saudi executive search firm. “But we still have certain gaps in the market. For instance, I recently worked with a client who is a market leader in what they do. They are looking to hire a senior IT executive, but they cannot hire from their competitors because my client is far ahead of everybody – so anyone they hire locally would probably be behind in their skills.
“IT is an industry that requires specific know-how and is an example of where we have to go out of country to hire. In these cases, we help our clients to hire seasoned expat executives from Europe, the US or Asia Pacific. Client companies also hire a Saudi successor, who shadows the expat so that in five years, the Saudi national has the knowledge to do the job.”
Abdulghaffar added: “We often have to do this for highly specialised jobs. An expat is hired on a five-year assignment to do a specific job. But from day one, they know that, as part of their job, by year five they must have trained a Saudi successor and they must hand the job over to the successor and leave.”
Believe it or not, this arrangement has certain advantages for the expats. Apart from the fact that they pay no taxes while working in Saudi Arabia, they are also likely to gain skills of their own. That is because with all the investment going into transforming the economy, the country offers once-in-a-lifetime opportunities for expats to develop their careers in virtually every industry.
It is very rare to get the opportunity to lead the kind of projects that Saudi Arabia allows expats to lead. For example, the defence manufacturing sector requires digital talent and is attracting a lot of people from abroad. Nowhere else in the world today can IT professionals say that they have worked on so many greenfield projects. The same goes for tourism and hospitality. Hundreds of new hotels are springing up, which require a range of new information systems built from scratch.
“Money is not the main factor driving people coming here,” said Abdulghaffar. “The main factor is the challenge. The people we hire – the very seasoned executives – have reached a point where they are well off. They are no longer motivated primarily by money, but they do get excited by the challenges and opportunities that the Saudi market offers them.”
Advice for candidates and employers
Abdulghaffar advises young Saudi job-seekers to look for something that will increase their knowledge. Candidates should not take a job just because it’s with a blue-chip company or because it pays well – specially in the first part of their career. They should instead look for a job that gives them rich experience, even if it is with a small company, he said. A track record full of successful projects and transformations will pay off in the long run.
“If you go for the money, you’ll get a nice paycheck in the beginning,” he said. “But because companies that pay well have everything in order, they don’t need any radical changes. You’ll be there just to push paper.”
As for employers, Abdulghaffar points out that a lot of employers don’t get the idea that it’s not the money that attracts people the most. People want a challenge, and money is the second or third on the list of motivating factors when it comes to a job.
“Tell them about a challenge and a vision,” he advised hiring managers. “Tell them they will lead the effort. Give them a time-frame and tell them what resources they will have and the support they’ll get. Give them a well-packaged offer that includes a good job description, along with authority matrices, budgets, support and resources.”