Recruiting in Saudi Arabia can bring potential tripwires for companies taking steps to build their international profile. International companies recruiting top talent in Saudi Arabia for their expansion plans face restrictions on how they build their workforce. The majority of 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 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.
Bradford Jacobs’ global experience is vital for taking the smartest recruitment route into Saudi Arabia. Our benchmark platforms as a Professional Employer Organisation (PEO) have worldwide reach and include a total understanding of the complexities of the Saudi employment market. You need staff to be ‘up and running’ quickly.
Foreign companies recruiting in Saudi Arabia must cope with Saudization, known as Nitaqat. Since starting the program in 2011 as part of ‘Vision 2030’, the Saudi government has been 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 comprehensively understand how the system works.
For example, some industries allow only Saudi Arabians 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 and residence permits and fitting in with the KSA’s quota system. To avoid these issues, knowing where to locate the finest candidates for your company’s international expansion is vital. Don’t wait, contact Bradford Jacobs for the solutions.
Once recruited and onboarded, employers must comply with various procedures to ensure employees can legally work in Saudi Arabia. Responsibilities include.
Note: Foreigners entering Saudi Arabia to work require a sponsor (kafeel), which can be a company or individual. They must have a written employment contract.
Employers must then:
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.
In the Kingdom of Saudi Arabia (KSA), employment legislation is generally covered by the Labour Law (2005), plus specific provisions that may be introduced by the Ministry of Human Resources and Social Development (HRSD), formerly the Ministry of Labour and Social Development.
The government’s ‘Saudization’ program aims to increase the number of Saudi nationals employed in the private sector, where expats comprise most of the workforce. Only Saudi Arabians 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.