Saudi Arabia Work Culture
Saudi Arabia Work Culture
To succeed in business in Saudi Arabia, it is vital for both employers and employees to have a strong understanding of the business culture.
As a global PEO (Professional Employment Organization) it is our goal to be familiar and updated with the business culture in the country we work with and in. By sharing our knowledge about Saudi work culture, we want to support your global expansion plans. Therefore, we will address all the aspects of the work culture in Saudi Arabia to start your expansion well-informed.
Work Culture in Saudi Arabia
Traditionally an economy based on oil, Saudi Arabia has been opening its doors to international investment, companies, and expat employees for decades as it builds its global trading profile. The government’s Vision 2030 program is encouraging private enterprise and the growth of start-ups and SMEs as it widens its economic horizons.
Saudi Arabia has issued multiple licenses for multinationals to move their headquarters to the capital, Riyadh, including PepsiCo, Deloitte, and Unilever in a drive to rival the United Arab Emirates as the No. 1 business hub in the Middle East and West Asia. From 2023, foreign companies will need a regional headquarters in Saudi Arabia to qualify for a license.
Most staff in the private sector are expats, which led to the government introducing ‘Saudization’, or Nitaqat, in 2011 to increase the number of locals on company payrolls. Companies must comply with quotas based on company size, business activities and the balance of employees between foreigners and Saudis.
Expats must be prepared for ‘positive discrimination’ towards local employees in such as training, promotion and the level of benefits and entitlements above the statutory minimums.
These are the complications on the recruitment front for companies expanding into Saudi and expats hoping to work there, where the attractions include zero taxation on personal income. Despite its growing profile in the world economy, Saudi Arabia’s business culture remains traditional in many regards.
Adjustments must be made whichever country incomers arrive from. Ready for the challenge? Now is the time to get down to business. So here are a few tips on taking the best strides to clear those cultural hurdles.
Language: The business language is generally English; if unsure or not fluent in Arabic, have an interpreter on your team, particularly if making presentations.
Punctuality: Not overly important to Saudis and, although it is best to show respect by being on time, do not show impatience if meetings are delayed, cancelled, or frequently interrupted.
Meetings and Negotiations: Introductory small talk can soon be followed by hard bargaining with decision making coming from the top, and usually from a Saudi. Being ‘pushy’ will not work, with polite flexibility being the best option. Building trust and relationships is crucial, as in most countries in the region, so be prepared to spend the time laying the foundations for the business relationship.
Greetings: Members of the opposite team should be greeted individually, most senior first, with a handshake. Only use the right hand. Where women are on the other team, men should wait for them to extend their hand first and should not prolong eye contact.
Business Cards: Exchange using the right hand at the start of the meeting, with the Arabic side uppermost.
Dress Code: ‘Dress to impress’ in the business environment … formal for both men and women.
Out of Hours: Lunches and dinners or meetings for coffee in a hotel lounge are all part of the ‘getting to know you’ process and a useful networking introduction for those trying to get ‘their foot in the door’ for business opportunities.
Saudi Arabia’s Minimum Wage
The monthly minimum wage applying to Saudis in the public sector set in 2022 is SAR 4,000 (€1,046, US$1,065), which was changed for the first time since 2013. There is no statutory minimum in the private sector.
Probation Periods in Saudi Arabia
Trial periods must be covered in the employment contract and are generally for 90 days, although the employee can give written agreement for the probation to be a maximum of 180 days. Either party can terminate without cause or reason.
Working Hours in Saudi Arabia
Eight hours a day to a maximum 48 a week is the norm. During the holy month of Ramadan hours are cut to six a day and 36 a week for Muslim staff. Employees are entitled to 30 minutes unpaid break after working five hours and total work time cannot exceed 10 a day including overtime.
Overtime in Saudi Arabia
Extra hours are paid at 50% above the employee’s normal hourly pay, regardless of whether the extra hours are for day or night work, on rest days, public or religious holidays.