Saudi Arabia’s Saudization Program and Its Impact on IT Recruitment
The labor market in Saudi Arabia is highly dependent on foreign talent, both in the public and private sectors. The kingdom has a very high demand for skilled workers to carry out their mega-infrastructure projects, and the local workforce is not experienced and skilled enough.
The Saudi market, therefore, is split between two distinct labor markets. One is for Saudi nationals, while the other is for expatriates. According to a recent report published by the Central Department of Statistics and Information, the overall unemployment rate in Saudi Arabia is about 5.7%, which is considered healthy by international standards.
However, a large portion of these workers were non-Saudis working in various positions. The same report mentioned the unemployment rate of Saudis to be about 11.6%, which was considered alarming by the officials.
This led to the inception and development of Saudization, which is basically a reform in the recruitment sector that makes it mandatory for companies to hire Saudi nationals, especially in the private sector.
What is Saudization?
Saudization was first introduced in 1985 by the Labor Ministry of Saudi Arabia with the aim of creating more job opportunities for Saudi nationals and reducing their reliance on foreign talent. This policy mandates that every private or public Saudi company must hire a certain number of Saudi workers if they are to continue their operations in the Kingdom.
Due to the strict implementation of Saudization policies in 2014, a large number of expatriates had to leave the country, which resulted in the closure of more than 200,000 private firms.
The Impact of Saudization on IT Recruitment
Saudization has affected almost every industry in the region. IT recruitment has also changed a lot, and there are many challenges that IT organizations and job seekers need to face during the recruiting process.
- Ineffective Communication
The Saudization has led to unrealistic assumptions and expectations between hiring managers and recruitment professionals in Saudi Arabia in terms of the selection of candidates. Hiring managers are unable to provide useful feedback on why they are rejecting certain eligible candidates, and that puts recruitment agencies in a tough spot.
Moreover, if you are an expatriate who owns an IT company in KSA and you are forced to hire local professionals who only know the native language, it can also make communication a bit tricky.
- Organizational Structures
This is another factor where Saudization has impacted recruitment in Saudi Arabia. Most local companies have an inherent hierarchal view of company leadership and management.
This makes it hard for expatriates to adjust to these traditional or cultural settings that Saudization seems to uphold.
- Saudization Quotas
Saudization brings with it a lot of challenges for HR services and recruitment professionals. A study conducted by “Informa Middle East” in 2015 also focused on this particular aspect of Saudization policies.
They report that companies that strive to meet the Saudization Quotas often have to sacrifice their efficiency and productivity. This often poses a lot of challenges for such organizations, making it hard for them to stay competitive for too long.
- Quality of Candidates
Though the Saudi government has put a lot of money and effort into producing skilled graduates from the top universities in Saudi Arabia, they are still not able to perform as well as some expatriate candidates who have more experience and knowledge about IT.
Most employers are of the view that fresh university graduates often express unreasonable expectations in terms of job responsibilities and compensation. This has been a cause for concern for many recruiters since they are not able to find local candidates with enough skills and drive to enter the workforce.
- Employee Engagement
It has also been observed that most Saudi nationals tend to move from one organization to another, often showing they do not feel engaged with the people they work with. The lack of commitment from such candidates affects the work environment poorly and makes it hard to maintain a steady and collaborative operation.
- Remuneration Outlook
With Saudization policies in place, all the major companies have to train entry-level employees so that they can do their roles efficiently. And once they have trained these people, they now need to retain them. This means if a person wishes to leave, the company must offer them more in terms of salaries and benefits to encourage them to stay. This puts employers under a lot of financial stress with very little ROI.
Saudization and Foreign Workers
Saudization directly impacts the expatriates who relocate there to find jobs and build a career in IT. If there is a job vacancy available and the company has yet to meet the quota, they will have to hire a Saudi national, even though you might have the same skillset, education, and experience as them.
There is still tough competition owing to the fact that there is a significant shortage of skills and relevant IT experience among fresh graduate Saudi nationals. This puts expatriates in a better position where they do stand a chance if they know how and where to look for jobs.
So, if you are a well-rounded IT professional who has the right skills and expertise, you can land a good job despite the Saudization policies in place. Many private-sector companies have also come up with strategies to cheat the system.
They have found that downsizing and temporary Saudi hiring can help them keep up with the Saudiization requirements without reducing their efficiency. This has proved quite helpful for expatriates working in various sectors in the KSA.
The IT companies in Saudi Arabia are constantly looking for better ways to attract experienced and skilled expatriates as well as highly qualified Saudi nationals. The Saudization program has affected the recruitment process of these companies to a great extent, and now they have to design working environments where both local and foreign employees can collaborate and engage effectively.
The Saudization aims to build a job market that prefers and appreciates Saudi nationals, but that cannot diminish the importance and impact of expatriates who can help these people upskill and learn new tools to fill the expertise and knowledge gap.
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