Starting this Sunday, Saudi Arabia will implement a significant policy change aimed at localizing engineering jobs. The move, designed to boost employment opportunities for Saudi nationals, mandates that 25 percent of engineering roles in private sector companies with at least five workers be filled by Saudi citizens. This initiative, unveiled earlier this year, is part of the Saudi government’s broader efforts to replace foreign workers with local talent in various sectors, including education, telecommunications, and real estate.
Step Towards Saudization
The decision to localize engineering professions follows a series of similar initiatives under the kingdom’s Saudization policy, which seeks to increase the employment of Saudi nationals across various industries. Last December, the Saudi Ministry of Human Resources announced plans to localize jobs in sales, purchases, and project management, which came into effect earlier this year. A similar initiative targeting the dental profession was partially implemented in March.
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Impact on Employment
The latest policy is expected to generate over 8,000 jobs for Saudis, with a minimum monthly salary of SR7,000. The Ministry of Human Resources, in collaboration with the Ministry of Municipal and Rural Affairs and Housing, aims to ensure that these localization efforts align with labor market demands and the specifics of engineering specializations.
The Ministry of Municipal and Rural Affairs and Housing will monitor the implementation of this policy. Private sector companies that comply with the new regulations will benefit from various support programmes offered by the Ministry of Human Resources. These include assistance with recruitment, training, and long-term employment stability.
Incentives and Support for Private Sector
To encourage private sector compliance, the Saudi government is offering a range of incentives. Companies adhering to the localization regulations will gain priority access to employment support programmes through the Human Resources Development Fund (HADAF). This includes support for finding qualified employees, providing necessary training and education, and ensuring job continuity.
The Ministry of Human Resources has also published a detailed procedural guide on its website, outlining the localization process, affected professions, and required quotas. Non-compliant establishments will face legal consequences, emphasizing the importance of adherence to the new regulations.
Vision 2030 and Economic Diversification
This initiative is part of Saudi Arabia’s Vision 2030 plan, which aims to diversify the economy and reduce unemployment among citizens. One of the key elements of this strategy is the rapid Saudization of the workforce. By increasing the number of Saudi nationals employed in the private sector, the government hopes to create more productive job opportunities across various regions of the kingdom.
Junaid Ansari, head of investment strategy and research at Kamco Invest, highlighted the importance of balancing Saudization with consistent investment in the education sector. “The overall talent pool in the kingdom needs to not just remain stable but improve rapidly to keep up with the growing requirements of the private sector,” he said.
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The overall unemployment rate in Saudi Arabia, which includes both Saudis and expatriates, was relatively stable at 3.5 percent in the first quarter of this year. However, the unemployment rate for Saudi citizens decreased to 7.6 percent from 7.8 percent in the previous quarter. The labor force participation rate for Saudis also increased to 51.4 percent from 50.4 percent, indicating a positive trend in employment among Saudi nationals.