Situation of Employees in Saudi Arabia

Employment rate in Saudi Arabia grew by 3.2% in 2014.  The issue of foreign labor in Saudi Arabia is now one that touches all corners of the globe. Since 30% of Saudi Arabia’s population of 27.3 million are immigrants from other countries. On the other hand, Saudi nationals have witnessed high levels of unemployment for the past decade; the unemployment rate of nationals remained high at 11.7%.  Besides, 35% of the population is under 19 years old, and in few years, this segment will enter the labor market.

  1. The expanding of foreign employees & high rate of unemployment

Currently, foreign employees represent around 31% (8.4 million) of the Kingdom’s population. They dominate the private sector workforce by holding about 90% of jobs. On the other hand, nationals who represent 70% (18.7 million) of the population account for the remaining 10% of jobs.

Employment_in_KSA

Foreign employees constitute the major chunk of employees in the Kingdom’s private sector. This is leading to higher unemployment rates among Saudi nationals and causing discontent among the locals. The exhibit above shows that the unemployment rate among nationals has been consistently high for several years.

High foreign remittance is another factor that has been brought to light. Every year, foreign employees in the Kingdom send significant sums of money in the form of remittances back to their home countries. In 2010, Saudi Arabia became the world’s second biggest remittance source, sending USD 27.1 billion in expatriate remittances.

  1. Rise in youth population

Saudi Arabia has a young population with over 40% of its people under the age of 20. Population under the age of 20 increased 4.3% during 2006-2009. The increase in the number of Saudis reaching the working age is exerting further pressure on the labor market. Figures from the International Labor Organization indicate that the Kingdom’s youth unemployment level is worse than that of Jordan, Egypt. According to the Central Department of Statistics and Information, unemployment rate in the 20-24 age categories stood at 30.2% in 2009. Unemployment, especially among the youth, is a critical issue which has diverse negative implications that could affect the Kingdom’s socioeconomic stability and burden the government’s welfare system.

  1. Unrest in the region

The wave of civil unrest that swept across the MENA region last year escalated the urgency for improving job opportunities for Saudi nationals in the Kingdom. Unemployment among others was believed to be a key reason for political instability in several countries across the region. The unrest led to the toppling of governments in countries such as Egypt and Libya. Although Saudi Arabia remained largely insulated from these events, the gravity of the situation is well understood. The Saudi Arabian government announced several social and economic packages during the year to address unemployment and income disparity in the Kingdom. In February, a USD 37 billion package, including pay hikes, unemployment benefits and affordable housing, was announced. Job creation emerged as a top priority in the government’s agenda. The King ordered the creation of 66,000 security force posts, and another 66,000 jobs for graduate teachers and health diploma holders.

Source: http://vnmanpower.com 

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Economic Structure in Saudi Arabia

The economy is highly dependent on oil. But the increased oil revenues, and the governments strategy to diversify the economy, has made way for other sectors. The non-oil sector is starting to gain importance, and according to official figures the non-oil grew by 3% in real term in 2009, compared to the total real growth of 0.2 %.

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Sectoral Employment Forecast in 2016

In 2008, there were 2.03 million people in employment. By 2016, total employment is expected to be 77,000 lower than in 2008, recovering from a low of 1.7 million in 2010. In 2008, one quarter of employment was in the market services sector (finance, business services, hotels and other), just under one fifth in health and education, 14% in distribution (retail, wholesale and motor) and 13% in construction. By 2016, the sectoral distribution of employment will change somewhat. Traditional manufacturing is expected to lose 2 percentage points of its share and account for 5% of total employment by 2015. Construction is expected to account for 10% of employment in 2015 compared to 13% in 2008; agriculture for 4% compared to 6%. An increase in share is expected to be observed in market services, high tech manufacturing and transport and communications.

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Saudi Employment Forecasts 2015-2025

The Saudi labor market is segmented in several aspects, be it in wages, work hours or skills with unique challenges facing the employment of Saudis in the private sector. Data released by the Central Department of Statistics and Information showed that the overall unemployment rate in Saudi Arabia was healthy by international standards at 5.7% during the first half of 2015. This reflected the positive general employment stance of the non-oil economy and the private sector in particular. However, the challenge to the Saudi labor market is rooted in the over-reliance on non-Saudis occupying private sector jobs.

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How to Manage Workers in Dorm

Worker camps and housing facilities should have a written management plan, including management policies or plan on security, living conditions, workers’ rights and representation, relationships with the communities and grievance processes. Part of those policies and plans can take the form of codes of conduct. The quality of the staff managing and maintaining the accommodation facilities will have a decisive impact on the level of standards which are implemented and the well-being of workers. The manager will be responsible for overseeing staff, for ensuring the implementation of the accommodation standards and for the implementation of the management plans.

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Standards for Workers’ Accommodation in Dubai

When recruiting foreign workers in Dubai, employers should ensure that accommodation which is provided is not overcrowded and does not pose a risk to the health and safety of those living there, and that any agreed notice periods are observed.

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Labor Law in the UAE Will Be Changed to Protect Rights for Employee

Sweeping new rules by the Ministry of Labor will forge a stronger relationship between employers and workers and enhance the labor market across the country by ensuring transparency and encouraging more flexible labor mobility for workers.

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Understanding more about Employees’ need

Like employers, individuals have their own unique needs for seeking employment. Different people have different needs and one of the keys to building a stable core staff and adding to it when necessary, is to match the needs of prospective employees. This is done in the hiring process and the key to successful hiring is having well defined needs and creating employment ads that clearly specify those needs.

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Salary for foreign worker in the UAE

The UAE economy is a transitional economy that attempts to diversify away from hydrocarbon-based to non-hydrocarbon-based economic growth. One of the main constraints during the transition is the scarcity of skilled knowledge workers from the local population while there is abundant supply of imported mostly unskilled foreign workers.

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Labor market regulation in Saudi Arabia

Saudi Arabia has begun large-scale foreign labor imports in the 1970s. Whereas the public sector now is largely Saudiized, attempts to nationalize the private labor market, although official policy since at least the early 1980s, have made little headway. Throughout booms and busts, dependency on foreign labor has remained high.

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