Retailer welcomes new rules on Saudization for malls

Retailer welcomes new rules on Saudization for malls
Short Url
Updated 09 April 2021

Retailer welcomes new rules on Saudization for malls

Retailer welcomes new rules on Saudization for malls
  • Alhokair says it has worked in recent years to ensure we nurture and retain Saudi talent across the business

DUBAI: Saudi conglomerate Fawaz Abdulaziz Alhokair Co. (Alhokair), one of the Kingdom’s largest retailers, has welcomed a new move by the government to fully Saudize the Kingdom’s shopping malls, creating more jobs in the sector for Saudi workers.

Human Resources and Social Development Minister Ahmed bin Sulaiman Al-Rajhi on Wednesday issued three new labor directives that are set to transform the country’s retail and restaurant sector, creating 51,000 jobs for Saudi men and women.

“We are pleased to see fresh Saudization initiatives for the retail sector. These efforts will create new and exciting opportunities for local talent, driving exposure to new sectors and upskilling a powerful section of the local workforce,” Marwan Moukarzel, CEO of Alhokair, told Arab News.

“In recent years, Alhokair has worked to ensure we nurture and retain Saudi talent across the business, and we look forward to extending this program into more parts of our organization. This is a milestone for local retail, reflecting positive change aligned with Vision 2030 and its targets for the private sector economy,” he added.

The news comes as the retailer moves forward with an ambitious expansion plan, aiming to open around 57 food and beverage outlets in the next 12 to 16 months, and at least another 50 retail stores in the fashion, cosmetics, beauty, and sports sectors.

Gulf governments, under pressure to provide more jobs for citizens amid declining oil revenues, are extending localization programs across industries that have typically relied heavily on expatriates.

The Kingdom introduced its nationalization scheme, Nitaqat, in 2011.

The first directive stipulated that only Saudis would be able to work in “closed commercial complexes (malls)” and their management offices.

A limited number of roles would be exempt, but the ministry did not specify which ones.

The other rule changes were related to raising the number of Saudis working in the restaurant, cafe, and catering trade.

The statement did not specify what the new localization rates would be across these sectors.

This is the latest government move to boost the number of Saudis in the workforce. In February, it introduced restrictions on outsourcing customer care services to foreign call centers. The previous month, Saleh Al-Jasser, Saudi minister of transport and chairman of the Public Transport Authority, approved 100 percent localization of ride-hailing services. Other Saudization initiatives announced this year include a goal of 30 percent nationals in accountancy, while a target of 20 percent was set for engineering in August 2020.

The population across the GCC declined by about 4 percent in 2020 due to an exodus of foreign workers spurred by subdued non-oil sector growth and nationalization policies, according to estimates by S&P Global Ratings. The departures were highest in Dubai, followed by Oman, Qatar, Abu Dhabi, and Kuwait. “The GCC’s high dependence on expat labor, especially in the private sector, has stymied its development of human capital in the national population,” S&P credit analysts led by Zahabia S Gupta wrote in a research report in February.

“The majority of the local workforce is employed by the public sector, which weighs on governments’ fiscal positions, especially in times of lower oil prices.”

Saudi Arabia has the lowest dependence on foreign labor among GCC countries at about 77 percent, while Qatar has the highest at about 94 percent, according to S&P data.