RIYADH, 7 May 2004 — A survey of 75 companies in the Kingdom has revealed that the overall level of Saudization went up from 18 percent in 2000 to 23 percent this year — an increase which falls short of the annual five percent target set by the Ministry of Labor.
A quarter of the companies surveyed had actually increased their recruitment from low-wage countries like Bangladesh, Sri Lanka, Nepal, Indonesia and Eritrea. Other companies, mainly multinationals based in Europe, were beginning to recruit technical staff from Eastern Europe as the EU expands to the east, and pay rates for these workers remained 40 percent lower than those paid to other Westerners.
These are the main findings of a survey on the salary structure of Saudi companies conducted by the Riyadh-based Gulf Management Services, Ltd. (GMS) in connection with a handbook entitled “How Saudi Companies Pay,” which details the grades, salaries, benefits, bonus schemes, staffing and Saudization levels as well as other emerging trends in the companies.
In terms of salary structure, the average salaries of Western expatriates were found to have declined about five percent in the top grades while increasing by over 25 percent in the middle grade.
The increase in middle salaries is accompanied by a decline in the number of Westerners working in the Kingdom as more seek jobs in other booming economies. These workers are being gradually replaced by Saudis, other Arabs and Asians. In the current environment of tension and terrorism directed against Western expatriates, the increase in salaries could be set to continue in order to lure workers here, especially as the US dollar pulls down the Saudi Riyal against most other currencies.
GMS said that a total of 180 job categories were studied to assess the pace of Saudization on the corporate ladder and the incentives in place to bring more Saudis into the private sector.
The average workforce of the companies involved in the survey was 312. The percentage of Saudis in the companies ranged from 64 percent down to only three percent.
The survey shows that Saudi managers constituted four percent of the workforce in the companies covered by the survey, while those in the labor category comprised 59 percent of the work force, making up 19 percent of clerical jobs and 18 percent of professional jobs.
The findings indicate that the Saudization programs in industry are working, if rather slowly. More than 80 percent of the companies reported that they had stepped up their recruitment of Saudis in the past year, and two-thirds have a formal manpower development program for Saudis.
Only ten percent of the companies — mostly Saudi affiliates of multinational companies — had a scheme of incentives for their employees, such as savings plans, pension schemes and stock options. As more multinationals enter the Kingdom, more Saudi companies will adopt such plans as a means to retain Saudi employees, especially with its accession to the WTO.
