Saudization Programs: Effective or not?

The Saudi Ministry of Human Resources and Social Development announced recently the implementation of two decisions (Saudization Programs) to localize health professions by 60%, and professions in the medical device sector by 30% for engineering and technical professions for medical devices and 40% for sales professions and introducing medical devices and supplies throughout the Kingdom, as of April 11, 2022.

The ministry said, in a statement, that it had issued the two decisions earlier; to provide more stimulating and productive job opportunities for the people of the country. It also aims to raise the level of Saudi participation in the labor market, create more job opportunities for national cadres, and enhance Saudi contributions to the economic system.

Saudi Medical Jobs

The “Human Resources” added that the application of the two decisions comes after the end of the grace period specified for them. It indicates that the decision to localize professions in health specialties includes: jobs in medical laboratories, radiology, physiotherapy, and therapeutic nutrition in all medical facilities operating in the Kingdom, with the setting of the minimum calculation limit.

 In the Saudization rates, 7,000 riyals for a specialist, and 5,000 riyals for a technician; Saudization will be 60% of the total number of workers in the targeted health specialties, with the decision providing more than 5,600 jobs for male and female citizens.

The Ministry pointed out that the decision to localize professions in the “medical devices” sector included the localization of professions of sales, advertising, and introduction to medical devices and supplies in two phases, the first by 40%, and the second phase by 80%, as well as the localization of engineering and technical professions for medical devices, in two phases, the first by 30%. And in the second phase, by 50%, it will provide more than 3,000 job opportunities for male and female citizens, as the minimum wage is 7,000 riyals for holders of a bachelor’s degree, and 5,000 riyals for a technician.

Supporting Private Sector

The Ministry of Human Resources and Social Development will provide a package of incentives and support related to supporting private sector enterprises in employing Saudis, including wage support by up to 50%, job-seekers training, transportation allowance to and from work, and moving allowance from one city to another, an allowance for childcare to increase mothers’ participation, and an allowance for teleworking to encourage new work patterns.

On the other hand, the ministry announced that the decision to implement the minimum calculating percentage in the Saudization rates in the private sector to raise the salaries of Saudi dentists and pharmacists, to a minimum of 7,000 riyals, has entered into force. This is following the decision of the Minister of Human Resources and Social Development issued on October 12, 2021, approving the amendment and updating of the guides for the dental and pharmacy professions.

Saudi Physicians 

However, it is also necessary to take into account the country’s actual need for Saudi doctors. Higher education sends about 750 students annually to New Zealand, Australia and Belgium. This is a wonderful effort that must be followed by a long-term strategy for the Saudization of medicine. Serious work must be done to expand the creation of universities and colleges specialized in medicine.

The geographical area of ​​Saudi Arabia should be considered so that they can be covered with the needed number of Saudi doctors. Scholarships abroad can be expanded. The percentages established for accepting students in local universities should be reconsidered, as the student’s abilities are not governed by the percentage only.

Steps Towards Saudization

The Kingdom of Saudi Arabia has pursued a serious human development policy to replace expatriate labor with national labor since 1975, in what was known as the (Saudization) program, through three five-year plans after unemployment pressures increased and the number of Saudis entering the labor market.

Saudi Five-Year Plan 

Since 1975, the (second) Saudi five-year plan was approved and focused on giving priority to Saudis in employment in all administrative work and most technical disciplines, to increase Saudis’ contribution to the total workforce, diversify skills and raise their level, and prepare professionally for entrants to the labor market.

The third five-year plan (1980 – 1985); is to call for the employment of Saudis in supervisory and administrative positions and to review education curricula to achieve this goal. As for the fourth, fifth, and sixth five-year plans (1985 – 2000), they emphasized the policy of replacing expatriate labor with national labor through a plan targeting the following elements:

-Continuing to reduce dependence on non-Saudi manpower.

-Raising the productivity of workers.

– Increasing the size of the private sector’s attraction of Saudi manpower.

– Increasing the degree of compatibility of the skill level of Saudis who join the labor market to meet the needs of the national economy.

– Increasing Saudi women’s access to employment opportunities.

Challenges & Obstacles.

-Throughout this period, several factors prevented the achievement of most of these goals as required, and this resulted in the failure to activate some laws and requirements on violating companies and institutions and the inability to take strict measures in this area, and the most important of these factors are the following:

-The reluctance of Saudis to work in some jobs, especially technical, craft, and service jobs that were limited to expatriate workers.

– Increasing the number of Saudis enrolled in education to certain specializations, which the Saudi labor market may not need.

-Saudis’ preference for residency and work in major urban areas, and their unwillingness to work in other areas.

– Failure to achieve the principle of equal opportunities at work between men and women, despite the increase in women’s demand for education.

– The failure of the Saudi private sector to play its role in attracting Saudi workers, and its preference for the lowest-paid foreign labor, which it can dispose of when it desires to do so.

– The unwillingness of foreigners working in different locations to train Saudis who have recently entered work; Fearing that they will take their places and be laid off.

How to overcome obstacles: –

Such obstacles can be overcome through: –

* Obligating the private sector to operate a certain ceiling of national employment.

* Reducing the recruitment of foreign workers, prosecuting the illegal ones, and deporting them from the country.

* Raising the cost of expatriate workers to an extent that makes hiring them unfeasible for the employer.

* Imposing fees on the recruitment of foreign labor, and stipulating that they be skilled technical workers and have rare specialties.

* Develop educational curricula and curricula in line with the needs of the labor market to create national generations capable of competing with expatriate workers, with the need to pay attention to various training programs to hone the skills of national elements.

Future effects of Saudization

Although the process of Saudization or other processes of replacement of national labor is an inherent right of the state, and an undeniable ambition, there is no doubt that the process of Saudization will have effects at the local level of the Kingdom, and at the external level, especially in the countries exporting labor to the Kingdom.

On the internal level of the Kingdom of Saudi Arabia, it is expected that the contribution of national labor to the workforce and the Saudi economic activity will increase, and the dependence on expatriate labor will decrease, but this will change the rhythm of the Saudi society and the lifestyle of the individual and the family, especially after the increase in the participation of Saudi women in the labor market.

On the other hand, this change will affect the structure of taxes, insurance, pensions, and end-of-service benefits for the workforce in Saudi Arabia. It is also expected to affect the consumption pattern and the quality of goods sold in Saudi markets after the number of expatriate workers is laid off.

Air traffic between Saudi Arabia and labor-exporting countries such as (Egypt, Jordan, and Asian countries) will also be affected, which will affect the returns of airlines, whether Saudi or foreign.

The Role of Youth

To enhance the Saudization attitude in the kingdom of Saudi Arabia, young people should accept the job, no matter how low the salary is, and consider it a prelude to success and struggle. Some famous models started with low salaries and are in the highest positions now, with the need for permanent committees to count the number of jobs in the two sectors.

Universities can focus on the specializations that the labor market needs, and close any departments that are not needed by the labor market; since it is considered supportive of unemployment, several departments have no jobs, and there is no point in continuing them.

There must be a link between the curricula and the labor market, as it is a very important matter in our time, and focus must be placed on training and its inclusion in education so that this link occurs, and the maximum benefit for workers is made; Thus, foreign investment will enter strongly in the coming years in the Saudi market; Which will help in employing a large number of graduates and raise efficiency at work.

To sum up: The wise policy now being followed in the Kingdom of Saudi Arabia, known as (Saudization), is considered an inherent right of civil society, which the Saudi government adopts and seeks to establish, it is also based on strict plans which reflect 2030 view, the most important of which is creating job opportunities for all citizens and realizing the principle of development in human and economic resources.