‘Survival of private firms hinges on hiring Saudis’

Private sector companies will continue hiring young Saudis because their survival depends on their compliance with Saudization quotas under the “Nitaqat” (naturalization) program and the newly introduced work permit fees.
Such is the conclusion of a report from the commerce committee at the Eastern Region Chamber of Commerce and Industry (ERCCI) on laws and regulations recently introduced by the Ministry of Labor.
The committee said the decisions are a big challenge for Saudi businesspeople. There will be fierce competition between private sector firms. They will either survive by complying with the new regulations or close down their businesses.
The report also stressed that it was important for the Ministry of Labor to promptly alter the color category of companies if they meet Saudization quotas.
Saudi firms have been color-coded into four categories based on their Saudization quotas. Firms labeled “red” are not allowed to renew their foreign workers’ visas and must improve their status by hiring more Saudis. “Yellow” firms are not allowed to extend their foreign employees’ work visas beyond six years. “Green” or “excellent” firms with high Saudization rates are allowed to offer jobs to foreign workers that are employed by firms in the red and yellow categories and transfer their visas.
Firms in the “blue” or “VIP” category will enjoy the ability to hire workers from any part of the world using an Internet-based system with minimal clearance needed.
The committee also noted the importance of protecting companies in case Saudi employees resign after receiving extensive training and other benefits.
The committee members also discussed possible damage to companies from these resignations, especially if these companies signed contracts for specific projects.