RIYADH: ABDUL HANNAN TAGO
Published — Tuesday 23 April 2013
Last update 26 April 2013 10:02 am
As Nitaqat takes hold and private companies scramble to fill the void left by expatriate workers with Saudis, the country will undergo a paradigm shift that forces employers to adjust to the new reality of a very different worker.
The primary consideration among employers is that the emerging Saudi workforce in the private sector will have fewer skills but demand higher salaries. Employers can no longer complain that Saudis are less educated than expatriates. During the 2010-2011 academic year alone, 130,000 Saudis were studying for various degrees in 22 countries.
Private companies now must adjust their hiring standards in how to deal with a new breed of worker not necessarily unqualified for jobs but requiring more training.
In a recent interview with Arab News, Labor Minister Adel Fakeih said the Nitaqat program has so far been able to help 400,000 Saudi citizens get jobs. The program aimed at imposing Saudization rate up to 30 percent and with the Labor Ministry’s new get-tough policy, employers have no choice but to shift their priorities on the type of worker they want.
A study on Saudization by Adel S. Al-Dosary, professor and chairman, Department of City and Regional Planning College of Environmental Design, and Syed Masiur Rahman of the Department of Civil Engineering College of Engineering at King Fahd University of Petroleum & Minerals (KFUPM), noted that there is a need for an integrated substitution strategy to remove the constraints that hinder Saudization in the private sector over the long haul.
According to the Ministry of Labor and research performed by Al-Dosary and Rahman, the private sector under Saudization has provided about 693,000 jobs for Saudis between 2000 and 2004 compared to about 291,000 jobs between 1995 and 1999.
However, at issue is the supply-demand mismatch in the labor market and the Saudi perception of unattractive jobs due to relatively low wages. Employers, perhaps more importantly, look at the “skills imbalance” between Saudis and expatriates.
Simply, the conventional wisdom is that many Saudis seeking employment do not have the skills required in the private sector. Even though Saudis may not possess the skills, they still demand higher salaries than their expat counterparts.
According to the study, “An expatriate labor force is viewed by the private sector as a more cost-effective and low-risk alternative to hiring Saudi university graduates. In fact, higher salaries and other benefits required by the Saudis in the private sector compared to those of expatriates serve as an obstacle to the employment in the private sector.”
Yet a Riyadh supermarket has overcome those obstacles, although it is paying a price. The supermarket recently advertised jobs targeting Saudi job applicants. The skills and education requirements for the jobs were similar for expatriates, but the salaries were better for Saudis.
The supermarket required that a sales accountant have an intermediate school certificate. The salary was SR 4,000 a month for six months of continuous work, and then to SR 4,500 following the six-month period. An expatriate was earning about SR 3,000 a month. The Saudi worker can receive a promotion to branch supervisor after one year of service. He also can receive a SR 5,000 salary if he has completed high school and undergone training.
To qualify as branch manager, the Saudi applicant is required to possess a university degree for a monthly salary of SR 7,500. The company provides medical insurance, free English language learning courses and a sales bonus.
“As a national responsibility, we have to comply with the government campaign,” said a human resources officer for the supermarket. “We have to provide jobs to our citizens as part of the strategic plan, even though we have been employing expatriates since the start of our business.” The supermarket officer said the company has been able to attract Saudis to jobs once performed by expats.
“So far we were able to employ a good number of Saudi applicants,” he said. “We are offering very attractive officers, including eight working hours and two off-days.”
But not all jobs have the same attraction. For one, private companies rely on imported cheap manual labor for labor-intensive occupations that are traditionally eschewed by Saudis. And mandatory Saudization of employees in such fields as vegetable markets has failed.
Yet attitudes about what kind of employment to accept are changing rapidly among Saudis. The conventional wisdom in the 1990s and early 2000s was that Saudis preferred bureaucratic work to manual labor.
According to the Al-Dosary and Rahman study, “A Saudi will accept a position but not a job. A Saudi will ring the cash register in his shop but will not sweep the floor. A Saudi will be a bureaucrat but never a plumber.” Many young Saudis, however, no longer reject such jobs that their fathers and older brothers had once expressed with only disdain.
Although the new generation may be less concerned with the appearance of performing manual labor, many don’t share the same skill sets as expatriates.
In the 1990s, Saudis did not possess the adequate education, and computer and English-language skills. The same problem still dogs many Saudis today, although some employers privately acknowledge that they perpetuate the stereotype to keep employing cheaper expatriate workers.
A Saudi university professor, who is familiar with the labor market and spoke on the condition her name not be published, said the lack of education among Saudis no longer holds water. Thousands of Saudis are returning from abroad with degrees that apply to the private sector.
“Saudis are arriving in the workplace with high university degrees, or at least a bachelor’s degree,” the professor said. “The fact is that Saudis are not accepting the same salaries expatriates with the same qualifications do. There is also stereotyping by private companies that say that Saudis are not up to the job, and they have always been able to get away with that.”
In fact, employers exaggerate the need for experienced workers in an effort to keep Saudis from applying for jobs.
While she acknowledged that Saudis might not be as experienced as expatriates, the professor noted that it should not be an obstacle to getting work.