Jobs for Saudis: Nitaqat rules tightened

The Labor Ministry, which intends to tighten its noose on private firms that are reluctant to Saudize jobs, said newly employed Saudis should stay with a company for at least six months to be counted as a full Saudi worker under the Nitaqat program.
Deputy Labor Minister Ahmad Al-Humaidan said the new condition would be applied on Dec. 23. “A Saudi worker will be counted as one full employee only 26 weeks or six months after his registration with the General Organization for Social Insurance (GOSI),” he explained.
Previously, they were given full-worker status after 13 weeks or three months. “The ministry intends to give companies enough time to adapt to the new policies,” the minister said, adding that it was aimed at encouraging companies to hire more Saudis. According to a statistical report issued by the ministry at the end of July, the new recruitment policies have started to achieve concrete results, with the number of Saudis working in the private sector rising from 9.9 percent in 2009 to 15.15 percent in 2013.
There are more than 10 million expatriate workers in the Kingdom and nearly 90 percent of them work for private companies.
Most private companies prefer to employ foreigners as they are cheaper compared to Saudis. This has increased the number of unemployed Saudi nationals.
Reducing the rate of unemployment among nationals has been one of the long-term strategic challenges in the Kingdom. As a result of the ministry’s policies, the unemployment rate in 2012 fell to 11.7 percent, as opposed to 12.1 percent the previous year.
“The problem is not in the ability to create jobs, as more than 1.2 million jobs are provided to foreign workers annually, indicating that jobs do exist in the private sector,” Al-Humaidan said. “The challenges are setting a minimum wage commensurate with the needs of Saudi employees, as well as increasing the level of competitiveness between the Saudis and expatriates,” he said.
Currently, the provision of salaries for Saudi nationals is supported through the Human Resources Development Fund, which provides up to 50 percent of salaries for Saudi nationals for two years. Companies with higher ratings under Nitaqat can benefit from this salary support for up to three or four years, Al-Humaidan said.
The ready availability of cheap foreign labor has also challenged efforts to increase opportunities for citizens to work in the private sector. Many businessmen have said expatriates often have technical skills unavailable among Saudis, who often lack the experience and perceive low-paid work as degrading.
But the government hopes that policies aimed at reforming the labor market, coupled with excessive spending on training and rehabilitation programs for citizens, will lead to greater impact. At present, Saudis account for only 10 percent of private sector jobs.