Recruiting Top Talent in Saudi Arabia

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Saudi Arabia Top Talent

International companies recruiting top talent in the Kingdom of Saudi Arabia (KSA) for their expansion plans face restrictions on how they build their workforce. Most employees in the private sector are expats, which led the Saudi government to institute a program of ‘Saudization’ to increase the number of locals working for leading companies.

Saudization, known as Nitaqat and launched in 2011, must comply with quotas based on the company’s size, activities, and the expat/Saudi balance in their workforce. The scheme is color coded. Platinum-rated entities receive preferential treatment regarding immigration processing times, while the lowest-rated ‘red’ companies are restricted from hiring foreigners until they improve their quota. Non-compliance results in fines, a ban on new work permits or being able to transfer employees.

The Ministry of Human Resources and Social Development (HRSD) – formerly the Ministry of Labor and Social Development – announced extensions to the program to come into effect by September 2023, affecting such as branch managers, supervisors, customer services and sales agents, all of which will have to be Saudis.

Other restrictions were already in place as the government seeks to protect its own nationals in the employment market, while maintaining Saudi Arabia’s attractions for foreign investment and high-level talent. This is evidenced by the KSA issuing 44 licenses for multinationals to move their headquarters to the capital, Riyadh, including PepsiCo, Deloitte, Unilever, and Baker Hughes. From 2023, foreign companies will need a regional headquarters in Saudi Arabia to qualify for a license.

These complexities are among the issues facing foreign companies. Finding and recruiting the best talent in an overseas territory that may be thousands of miles away is a major task for companies broadening their international horizons.

So, recruiting staff is a challenge. Where to begin?  This is where Bradford Jacobs’ global experience is vital for taking the smartest recruitment route in Saudi Arabia.

The Recruitment Process in Saudi Arabia

Foreign companies entering the recruitment process in Saudi Arabia must cope with Saudization, known as Nitaqat. Since starting the program in 2011 as part of ‘Vision 2030’, the Saudi government is balancing the need to protect the local workforce alongside attracting investment and corporations from overseas.

In this complex employment landscape, companies looking to recruit staff need support from partners who have a comprehensive understanding of how the system works. For example, some industries allow only Saudis to be employed. These are all issues that need to be addressed before you make your first move in finding the right match for your expansion plans.

Recruitment is the first stage of making your company operational and competitive in Saudi Arabia. However, complications surround moving staff into the country, obtaining visas, residence permits and fitting in with the KSA’s quota system. To avoid these issues, it is vital to know where to locate the finest candidates for your company’s international expansion.

Once recruited and onboarded, employers must comply with various procedures to ensure employees are legally able to work in Saudi Arabia. Responsibilities include.

  • Registering and obtaining approval for the contract through the Qiwa website
  • Once the contract is signed, registering the employee online with the General Organization for Social Insurance (GOSI). All Saudis must be registered, and expats can elect to register independently or through their employer
  • Registering employee with the Zakat, Tax and Customs Authority (ZATCA). Although there is no personal income tax on Saudi-sourced income, withholding taxes apply to non-residents

Note: Foreigners entering Saudi Arabia to work, require a sponsor (kafeel), which can be company or individual. They must have a written employment contract. Employers must then:

  • Ensure expat has the 10-digit Sponsor ID from the Ministry of Human Resources and Social Development (HRSD)
  • Use Sponsor ID to verify the ‘iqama’ residence and work permit, issued by the Ministry of the Interior. To obtain a foreigner’s work permit, the subsidiary’s payroll must include at least one Saudi national

Legal Checks on Employees in Saudi Arabia

Criminal Record Checks: Allowed only for specified employment, such as the financial sector, in which case the check is made through the relevant municipality court.

References and Qualifications: Verifying educational qualifications and employment records is common.

Medical Checks: These are required pre-employment as part of the visa application process. Saudi law does not prohibit drug and alcohol screening either pre-hire or during employment, when employers can use the Ministry of Human Resources and Social Development (HRSD) accredited system at government-registered clinics.

Required:  Compliance with all immigration, work permit and visa regulations for non-Gulf Cooperation Council nationals.

Basic Facts on Hiring in Saudi Arabia

In the Kingdom of Saudi Arabia (KSA), employment legislation is generally covered by the Labor Law (2005), plus specific provisions that may be introduced by the Ministry of Human Resources and Social Development (HRSD), formerly the Ministry of Labor and Social Development.

The government’s ‘Saudization’ program aims to increase the number of Saudi nationals employed in the private sector, where expats form most of the workforce. Only Saudi nationals, for example, can be employed on indefinite contracts or are entitled to a ‘de facto’ minimum wage. Entitlements and benefits generally also apply to nationals from the other five Gulf Cooperation Council (GCC) nations – Bahrain, Kuwait, Oman, Qatar, and the United Arab Emirates.

  • Employment contracts must be in writing, generally in Arabic and English or another language, although in the case of disputes the Arabic version will prevail. Dual language contracts, with both translations in the same document, are permitted
  • Employer and employee must each have a copy of the contract, which is drawn up on the HRSD-issued template
  • All contracts must be registered and approved through the Qiwa website
  • Once the contract is signed the employee must be registered with the Zakat, Tax and Customs Authority (ZATCA) and the General Organization for Social Insurance (GOSI)
  • Under the Labor Law and reflecting the Saudization program, only Saudi nationals are permitted open-ended, indefinite contracts
  • Probation periods for 90 days can be agreed. The employee can give written agreement to extend the trial period to a maximum 180 days
  • The probation period must be included in the contract and either party can terminate without reason or redress

Other factors apply to hiring from outside KSA or other GCC nations, including:

  • Foreigners require a sponsor (kafeel), which can be company or individual, and they must have a written employment contract

Employers must then:

  • Ensure expat has the 10-digit Sponsor ID from the Ministry of Human Resources and Social Development (HRSD)

Use Sponsor ID to verify the ‘iqama’ residence and work permit, issued by the Ministry of the Interior. To obtain a foreigner’s work, permit a Saudi national must already be on the subsidiary’s payroll