JEDDAH, 29 September 2005 — A decision by the Council of Ministers on Monday to raise the rate of Saudization in private companies to 75 percent has been widely welcomed by citizens who said it would significantly reduce unemployment in the country.
But some company executives fear that the new law will compel them to employ untrained Saudis which would harm their businesses. They emphasized the need for trained Saudi manpower before enforcing the decision.
Alsharief Ghazi ibn Jeraidi, general manager of Alsharif Construction Company, said the new law would force private firms to hire unskilled Saudi workers to take up challenging positions. “As most Saudi jobseekers are young and untrained, the burden of training them falls on private firms,” he told Arab News.
Nasser Alhammamy, manager of Alhammamy Association, and a number of other executives emphasized the need for training Saudis to enable them to take up jobs that require specialized skills. They argue that the companies should not be burdened with the responsibility of training unskilled manpower and the job seekers themselves must bear the expenses.
The new Labor Law, which was approved by the Cabinet on Monday, urges the private sector to provide young Saudi workers with adequate training to equip them to take up various jobs and create a suitable atmosphere for Saudis to work. The law, which replaces legislation issued 37 years ago, allows women the freedom to work in any fields that suit them.
Saudi recruits often complain that the jobs made available to them do not match their skills or experience. Ghazi said an effort has to be made to bridge the gult.
“There is no law in Saudi Arabia to ensure a minimum wage and jobs available in the private sector could be low-paying,” added Alhammamy.
While many citizens applauded the new law on Saudization, economists remain pessimistic.
“Providing jobs for the unemployed should not be at the cost of efficiency and effectiveness. Indeed, the law should be flexible, and firms ought to be given the freedom to hire and fire to improve their profitability and productivity,” said one economist.
Some economists argue that hiring more and more Saudis may boost the national economy, since Saudi citizens spend their income locally.
The Saudization policy addresses the unemployment problem directly, but economists call for greater emphasis on training Saudi manpower. The current policy places the burden of training the work force on the backs of individual firms, they say.
Should managers be free to decide on hiring and firing they would only make decisions that are most beneficial to them. But if their hands are tied by legislation, the companies will lose their ability to compete in the market; productivity will suffer which in turn will lead to an economic slowdown.
“Hiring foreign labor is not without its costs,” argues Mohammad Alquithami, human resources manager at Binzagr Company. “In hiring foreigners, there are many extra costs that do not apply in the case of Saudi labor. Saudization might lessen these costs, but the expenses of training remain too high. The private sector is pushed to subsidize the unemployed.”
