JEDDAH: Economists say salaries in the private sector are likely to increase by 20 to 30 percent in the next five years as a result of the presence of foreign investors and the privatization of some segments of the public sector.
The retail, technology and tourism sectors will be the first to witness this growth, they pointed out.
Economist Abdullah Al-Maghlouth said salaries will increase by about 30 percent during the next five years as a result of the entry of gigantic companies in the fields of retail, technology, tourism and entertainment.
According to Taif University professor Salem Ba’ajaja, mega foreign companies are trying to attract Saudis because they are mandated to employ a certain percentage of nationals in their units in the Kingdom.
Ba’ajaja said that these companies have an employment system that guarantees a minimum of 20 to 30 percent annual salary increase in the next five years.
He said local small- and medium-size companies will be forced to increase their average salaries to keep Saudi employees and maintain nationalization rates.
He said sectors such as banks, petrochemicals, technology, tourism and entertainment will offer the highest salaries in the coming years.
The president of the union of labor committees in the Kingdom, Nidal Radwan, said last year’s 5 percent increase in Saudi salaries was a positive indicator, but “it is still far from what we are looking for and what Saudi workers deserve.”
He, however, said that the entry of foreign companies in the labor market does not necessarily mean that Saudi salaries will increase. But the rate of Saudi employment should increase. However, this might not happen unless there is a dramatic change in the Ministry of Labor and Social Development’s policy regarding the issuance of foreign labor visas.
Radwan added that a dramatic and positive change in the level of Saudi workers in the private sector will happen only if the right policies and programs are adopted, including those regulating the minimum wage, which guarantees a dignified life for workers and their families.
The minimum wage should be decided through agreement among social partners, who are the representatives of workers and employers, as well as pertinent government bodies.
He said policy should also include setting a maximum limit to the number of labor visas and focusing on recruiting skilled expatriates; training national workers and focusing on the demands of the labor market; and imposing taxes or fees on companies in the Red Zone in Nitaqat.
Up to 30% salary hike predicted in 5 years
Up to 30% salary hike predicted in 5 years
