Expat exodus from Saudi prompts hiring crisis

Published:  12 Jul at 6 PM
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The Saudi crown prince’s efforts to drag Saudi Arabia screaming into the modern world are laudable, but seem to be leading to an economic crisis of confidence.

Many in the Kingdom see the programme as ambitious but unrealistic, especially those business owners affected by the Saudization plan responsible for a mass exodus of expat labour. Since the end of 2016, some 800,000 foreign employees have left for good and it’s proving almost impossible to get local citizens to fill the job vacancies. It seems the scheme to provide around 450,000 private sector positions to be filled by Saudis by 2020 is doomed to fail, taking a good number of employers down with it.

The massive expat exodus is a response to increased Saudization of the private sector in order to end its dependence on the foreign workers who make up a third of the Kingdom’s total population. Tools include levies on companies employing foreigners, dependents’ fees levied on expatriates and restrictions on jobs for incomers in the service and retail sectors. As a result, Saudi’s rental real estate market is in the doldrums and formerly busy shopping malls are emptying.

The majority of expat workers arrive from Asian countries and the Middle East and are employed in low-paid positions in businesses now forced to employ only Saudis. However, the majority of Saudis prefer to avoid what they determine as low-status jobs, opting to stay on the kingdom’s generous unemployment pay-outs and causing panic amongst businesses in the private sector. Heads of local chambers of commerce and industry are calling on lawmakers to exempt the sector from full Saudization, particularly with posts difficult to fill such as those in the construction industry.

Fines for disobeying the new rules are being regularly handed down, and business associations are reporting many firms are at risk of shutting down permanently. Many private sector companies are now getting round the issue by employing Saudi citizens in effectively bogus positions whilst paying them minuscule salaries in a ‘fake Saudization’ manoeuvre. However, one local media outlet said it all, reporting employers are saying Saudi youth is lazy, uninterested in working or building a career and happy to stay home and do nothing rather than working in a low-status job.
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