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Saudi Nationals Leaving Positions in Private Sector

Saudi Arabia : 02 November 2010

In 2009 more than 115,000 Saudis quit their jobs in spite of the government’s push to reduce unemployment.

Last year saw over 115,000 jobs in the private sector vacated by Saudi nationals in spite of a strong government move to draw more nationals to the economic sector and battle a difficult problem with joblessness, based on official data.

As 2009 closed there were 680,000 nationals working within Saudi Arabia’s private sector, a drop of around 17.8 per cent from the year before.  These numbers were gathered by the Ministry of Labour and published in local print media.

The number of expatriates in that industry grew by almost 15.2 per cent to hit 6.2 million at the close of last year.  Expats are still the dominant labour force within Saudi’s private sector, which is the largest of its kind in the Gulf region.

The print media stated that over 115,000 nationals had left their private industry positions in 2009, resulting in the 17.8 per cent decrease.

No reasons were stated for the drop but it was reported that the private sector’s average monthly salary declined to less than SR 1,000 in 2009, a 26 per cent drop from the SR 1,353 average in 2008.  Wages paid to male workers dropped by 27 per cent to an average below SR 1,000 and those paid to females declined 11 per cent to hit SR 1,675.

Similar to the nationals in other oil-producing nations, Saudis are more drawn to public sector employment that offers higher wages and benefits as well as shorter working hours.

The Kingdom of Saudi Arabia however, is relying on their private sector to bring about solutions to the festering unemployment difficulties.  It is widely believed that the government sector is growing redundant with shrinking growth rates compared to a population growing at 2 per cent per year.

It was reported in June that plans were in the works to open 160,000 positions within the private sector, the long-term goal being to battle unemployment within the nationals and replace expats with Saudis.

Saudi officials stated that there was a shorter plan covering two years, a medium term three-year plan and an overall long-term scheme covering two decades.

The aim of the short-term plan, which is set to begin next year, is to control unemployment followed by the medium-term plan, which is to reduce the jobless rate.

Public relations director for the Ministry of Labour in the Kingdom, Fahd bin Saleh Al Khuraisi, stated that the long-term plan has been set up to increase Saudi Arabia’s competitiveness with reliance on the national work force.

The initial target for the government is to create 160,000 positions for nationals within the private sector.  There are studies under way seeking to increase wages for nationals within private industries in an effort to draw more into that sector.

Khuraisi stated that the Ministry of Labour is working alongside other departments within the government, such as Education, Industry and Trade, Finance, Social Affairs and the Ministry of Economy and Planning, to implement these strategies.  Also, some chamber of commerce locations, investment fund managers and others are involved.

More than 20 per cent of the planet’s recoverable oil is under Saudi’s control, but the Kingdom is experiencing a higher rate of unemployment due to an expanded population and past economic slowdowns.

A leading Saudi bank cited Ministry of Labour data in October and reported that the jobless rate grew to 10.5 per cent in 2009, compared to 10 per cent the year before, mainly due to tighter marker conditions and corporate preference for hiring expats at lower wages.

A study by Banque Saudi Fransi stated that businesses within the private sector prefer foreign workers.  That segment of employees grew to 90 per cent of the total labour force in 2008, an increase from the 87 per cent share of 2006 to 2008.

The study reported that Saudi’s unemployment rate increased due to market conditions, climbing from 10 per cent in 2008 to hit 10.5 per cent the following year.  Ministry data indicated that the private sector hires nine times more expats than Saudi nationals.

Paul Holdsworth, Staff Writer, Gulf Jobs Market News
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