SMEs to employ more Saudis as hiring expats gets expensive

 The rate of Saudization in small and medium enterprises (SMEs) is expected to increase as a result of high cost of employing expatriate workers, according to traders and market analysts.

Mohammed Al-Johani, deputy chairman of the food committee at the Jeddah Chamber of Commerce and Industry (JCCI), said the new strategy of the Ministry of Labor and Social Development (MLSD) seeks to achieve a balance between the number of jobseekers and the current economic situation of private firms.

“SMEs that represent 90 percent of firms in the private sector will be forced to employ more Saudis as a result of a substantial increase in the cost of employing foreign workers,” Al-Johani told Al-Madina Arabic daily.

Saudis receive a monthly salary ranging between SR3,000 and SR5,000.

Decision-makers represent 15% to 20% of workers in a company. They receive a salary of SR10,000 to SR15,000 monthly. Saudis should work on these positions as there are about 100,000 Saudis who have graduated from foreign universities under the King Abdullah Foreign Scholarship Program.

“These highly qualified Saudi graduates can replace those highly paid expats,” Al-Johani said.

Dr. Khaled Al-Maimani, head of human resource department at Faculty of Economics in King Abdulaziz University in Jeddah, said the main reason why many Saudis leave private companies is the lack of confidence between Saudi employees and management. “This happens mainly because of the absence of Saudis in top or middle management in major companies,” he told Al-Madina newspaper.

He urged the ministry to change its Saudization strategy as it should focus on increasing the efficiency of workers.

He expected unemployment rate to fall from 12.9 percent as a result of increase in the cost of employing foreigners.

Nidal Ridwan, president of the Federation of Labor Unions, said all jobs are important and the government wants to Saudize jobs in all sectors without any exemption.

Ridwan said the Saudization program was going ahead in the right direction despite the challenges posed by the illegal tasattur (cover-up) businesses and some employers. He urged the private sector to support the government’s efforts to create suitable job opportunities for young Saudi men and women.

Economist Dr. Essam Khalifa emphasized the need to employ Saudis in senior managerial positions to facilitate employment of Saudis in the private sector.