Changes are once more afoot for expats in Saudi Arabia. The well-publicised “Saudization” targets are designed to regulate expat workers within the kingdom and force Saudi companies to prioritize local workers over expensive overseas talent.
Doing so should, in theory, help to guarantee jobs for deserving Saudi’s and prevent situations occurring as have been seen in some other Middle Eastern countries whereby expats flock to a country taking over many of the vacancies that would otherwise have been filled by locals.
Over the last few months we have covered a range of steps taken by the Saudi government to rail against expat workers but now new proposals represent one of the biggest shake-ups in the history of the Saudization program. Sadly, the news is not good and could make it even tougher for expats in the kingdom who may find themselves increasingly being selected against.
While companies in Saudi Arabia already receive targets for how many expat workers they may employ, with stiff financial penalties for those organizations failing to meet the designated targets, it seems further complications are to be introduced into the mix. Complications which could transform the whole labour market within the country.
The latest proposals suggest taking into account both an expat worker’s length of time in the country and their salary in order to calculate expat worker allowances. In essence, new “grades” have been proposed that may see a single expat worker being counted as more – or less – than one worker depending on their salary and length of time in the country.
The suggestions mean that a higher-salaried expat worker would take up less of the target than a lower-salaried worker. Those earning over SR15,000 would be counted as only half a worker, for example, while those earning less would be considered one worker.
Also, the longer that an expat has been working in the kingdom, the “more” expats they would be counted as. Those present in the country over 5 years would be counted as three expats, for example. This is the top tier possible according to the new proposals.
The plans therefore select against lower-salary workers as well as those who have remained in the country for longer periods of time. Indeed, the last part of the puzzle is that the Ministry of Labor is considering limiting expat workers to no more than 8 years stay.
While only time will tell how these proposals really affect the expat workforce in Saudi Arabia there is a significant risk that due to these changes employers will only seek to take on expat workers for short-term, highly-paid contracts where the penalties are most relaxed. Long-term or lower paid job offers are far more likely to be offered to native Saudis so as to avoid breaching agreed Saudization targets and the financial penalties this can invoke.