Ministry urged to compensate firms for switched employees

Updated 26 February 2013
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Ministry urged to compensate firms for switched employees

The Chamber of Commerce and Industry (CCI) in the Eastern Province has contacted the Ministry of Labor a several times asking that businesses be given compensation for the expenses paid in training the employees who later join other companies, Abd ar-Rahman ar-Rashid, chairman of CCI, said.
The ministry has yet to reach a decision regarding the matter. He explained that many companies incur large amounts of money in qualifying and training new Saudi employees who leave the original company following signature of a contract upon receiving offers from other businesses.
Ar-Rashid stressed the need for respect and courtesy amongst companies. He said that competition and rivalry should be in a positive way and must be conducted through legal channels.
No one should be employed with another company until his contract expires with his original company, he asserted. He added that when a person switches his original company, the Ministry of Labor should step in and impose financial fines on the employee.
This can compensate the original firm that provided training.
He also added that there are no rules to penalize a party leaving his/her company prior to the expiry of their contract. This, he said, encourages companies to get the better of each other and to try to lure competent employees even though they are still bound by active contracts. He explained that one of the most important reasons for attrition is that some professions are in high demand in the Saudi market.
Ar-Rashid said he would bring up the matter during the meeting of businessmen with the minister of labor next Saturday. He urged that a prompt resolution is needed so that the problem does not worsen and cause some companies to lose money or pay fines or even go out of business owing the Nitaqat (naturalization) process and other initiatives.
A number of businessmen have called upon the ministry to centralize all private sectors via the ministry. They urged the ministry to step in promptly to curb employee attrition, because it has become a worrying and disturbing phenomenon.
Many companies have gone to the trouble of establishing dedicated training institutes, hiring trainers and specialists and giving them high salaries in order to train young Saudis on the professions needed by the market. But, in most cases, the trainee leaves the company that trained him to work for another company for a salary that is only SR 500 more than the salary he was paid at his parent company.
Meanwhile, Said Zahrani, chairman of SRACO, said that employee attrition has become a common phenomenon, which has caused large financial losses among specialized companies that have dedicated training facilities. He said that the Eastern province witnesses an attrition rate of more than 50 percent among private sector employees.
He said that there are Saudi companies operating in other Arab and Gulf countries that practice a better system.


Green light for crown prince-led Saudi privatization program

Updated 39 min 9 sec ago
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Green light for crown prince-led Saudi privatization program

  • The Privatization Program is one of 12 key elements of the Saudi Arabia’s Vision 2030
  • The program is aimed at increasing job opportunities for Saudi nationals

RIYADH: Saudi Arabia’s Council of Economic and Development Affairs on Tuesday approved the Privatization Program that is one of 12 key elements of the Kingdom’s Vision 2030. 

The program is aimed at increasing job opportunities for Saudi nationals, attracting the latest technologies and innovations, and supporting economic development.

It encourages both local and foreign investment in order to enhance the role of the private sector, with government entities adopting a regulatory and supervisory role. The aim is to increase the private sector’s contribution to GDP from 40 percent to 65 percent by 2030. 

The program will aim to reach its objectives through encouraging the private sector to invest in establishing new schools, universities and health centers, while the government pursues its organizational and supervisory role in health and education.

The privatization program aims to benefit from previous success stories, with the private sector’s collaboration in the development of infrastructure, and its involvement on a large scale in sectors such as energy, water, transport, telecommunications, petrochemicals and finance.

The program sets out a series of objectives in three areas: Developing a general legal framework for policies related to privatization; establishing organizational foundations and dedicated institutions to execute the policies; and setting a timescale for their delivery. 

The Council of Economic and Development Affairs is headed by Crown Prince Mohammed bin Salman.