JEDDAH: In another move to cut the unemployment rate among its fast growing population, the Saudi government yesterday offered private firms a new incentive to employ Saudis.
The state-run Human Resources Development Fund (HRDF) said it would pay in advance private companies half of the first annual salary of newly hired Saudis. The HRDF used to pay the 50 percent after the completion of the first year.
Hisham Lingawi, director of the fund’s branch office in the Makkah province, expressed hope that the incentive would encourage private companies to train and employ more Saudis.
Unemployment among the 4.17 million native work force rose to 10 percent at the end of August 2008, up from 9.8 percent six months earlier, according to a recent Labor Ministry report. The new Saudization drive is being carried out by HRDF in coordination with the Ministry of Labor, the Chamber of Commerce and Industry and the Technical and Vocational Training Corporation (TVTC).
“The fund will support field programs, projects and studies aimed at employing Saudis. It will also give loans to centers and institutions established in the Kingdom to train Saudis,” Lingawi said. The fund will continue to pay 75 percent of bonuses paid to Saudis who undergo training at private firms.
The new move by HRDF should make the private sector “more enthusiastic about recruiting and addressing the needs of Saudis from less-endowed households after record inflation last year,” John Sfakianakis, chief economist at SABB bank told Reuters.
A SABB survey of 765 companies showed that almost three out of four Saudi companies expect to freeze hiring over the six months to August 2009 because of the global economic depression. Saudi Arabia has so far suffered less from the global crisis compared to other Gulf countries such as the UAE and Kuwait. But with the largest population in the region, the Kingdom faces a bigger challenge in meeting job demands for nationals.
Deputy Labor Minister Abdul Wahid Al-Humaid said the unemployment rate among Saudi women increased by two percent from 24.9 percent in February 2008 to 26.9 percent in August 2008.
“As a result of this increase the overall unemployment rate in the Kingdom rose from 9.8 to 10 percent in August 2008,” he told the Saudi Press Agency. However, the unemployment rate among Saudi men declined from 6.9 to 6.8 percent during the same period.
