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Saudi Government Closes 200,000 Firms Employing Expats

Saudi Arabia has long been an expatriate hotspot, with an estimated 7.5 million expats currently calling it home. However these numbers continue to cause concern to the Saudi government, who believe that native Saudi’s may be missing out on employment opportunities in favour of expatriate workers.
It seems that every few weeks the Saudi government launches a new initiative in the hope of increasing employment of native Saudis. Most recently, the Saudi government began to reward businesses that met the targets for Saudi employees. At the other end of the scale, increasing penalties have been placed on businesses that have failed to meet these targets; irrespective of how unrealistic some business owners claim they are.
Some Saudi business owners claim that hiring skilled Saudi workers is almost impossible these days in some industries and that instead they have to rely on expat workers in order to meet the needs of their business.
Now the Saudi government has announced two brand new policies that could rock the expat community in Saudi Arabia still further and lead to increased tensions between business owners and government officials.
Firstly, the government has begun to offer stiffer penalties to businesses failing to meet their employment targets.
Rather than a mere slap on the wrists, or even financial penalties for businesses missing their targets, the government has now resorted to closing down businesses that consistently fail to comply. In the last year alone an alleged 200,000 businesses have been closed down; a process that of course affects native Saudi workers just as much as it does expat workers.
This is, according to experts, just the tip of the iceberg. It seems many more businesses could soon be following in these footsteps as they struggle – and fail – to find the human resources they need within the native Saudi population.
On the other hand, Saudi Arabia has also recently proposed new changes to their visa regulations. In the past, it was necessary for businesses hiring expat workers to request a visa on their behalf. The expat employee was then tied to their sponsor for two years unless both parties agreed otherwise.
This made it easier for the government to manage and control overseas workers. It also protected business owners who had invested the time and money to recruit from overseas, as their newly-arrived staff couldn’t simply jump ship upon arriving in the country.
Now, though, the Saudi government’s latest proposal would mean that expats will be able to change sponsor far sooner than before and won’t require the agreement of their original employer.
This change of sponsor will not be freely available, but in cases where expatriate staff have not been treated fairly they will be able to seek new employment within Saudi Arabia. Complaints of employers either not producing documents or failing to pay expat staff should drop as a result, as their staff will be able to leave the offending employer without the risk of deportation.
That said, as expat workers typically enjoy higher salaries than native workers, there are concerns about this increasingly liquid work force will impact the economy. It has been argued that expats will find it easier to jump from one employer to another if the new proposals are approved, meaning that average salaries may have to rise in order to retain the best staff.
It should be said that these new relaxed visa restrictions are at present only under discussion may change considerably before being introduced.
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