Saudi Arabia is one of the top 20 largest economies and one of the top 3 oil-producing nations in the world. Oil accounts for 42% of its total GDP, taking the tally to approximately 2.6 trillion riyals. To reduce its dependence on oil, the Kingdom has laid out plans to diversify its economy through its Vision 2030 objectives.
The long-term vision aims to remodel the structure of the Saudi economy into a more differentiated and sustainable one by rolling out initiatives for the private sector to raise its contribution.
The strong emphasis on achieving Vision 2030 objectives has positively impacted businesses across various industries, in turn impacting the Saudi Labour Market and the hiring environment. In this article, we review the 3 most significant factors that have influenced the labour market based on the economic changes taking place across the Kingdom.
1. Digital Transformation and Work Patterns
Globally, remote and flexible work trends have become the norm. According to PwC, since the establishment of Saudi Arabia’s National Digital Transformation Unit in 2017, the government and the private sector have spent around $15bn on ICT infrastructure. This huge investment meant the entire country has internet coverage, and more than 93% of citizens between the ages of 10 and 73 are internet users. Globally, Saudi Arabia was one of the first countries to offer commercial 5G services and currently ranks 13th in the World Economic Forum’s Digital Capacity Index. Saudi Arabia’s strength in ICT proved critical during the pandemic when remote working from home became the norm globally.
The Ministry of Human Resources and Social Development (MHRSD) said that one of the Kingdom’s goals in 2022 is to manage and motivate flexible-work platforms, operate freelancing, as well as use remote working programs.
The change in work patterns has proved to be highly popular across the Kingdom, with 221,551 flexible work contracts documented in only the second quarter of 2022, whereas remote contracts reached 77,240 in 2022 alone.
2. Jobs in New Sectors
Vision 2030 has led the Kingdom of Saudi Arabia to consistently launch, build and invest in new and untapped sectors, including energy, mining, tourism, and entertainment, which have all led to the creation of many new and in-demand jobs. For instance, tourism development is an important driver of growth for the future of Saudi Arabia. It is one of the key pillars at the heart of Vision 2030’s plan to help diversify the economy and reduce reliance on oil.
The Saudi Tourism Authority was established in March 2020 to support the growth of the travel and tourism sector by developing, defining, and delivering innovative experiences for tourists. This strategy has contributed to an increase in demand for talent to assist in the development of new products and services to promote this sector. As of 2022, the Saudi Tourism Authority has created 836,000 jobs, well in line with Vision 2030 of creating 1 million job opportunities.
Similar to the tourism sector, the finance and banking, logistics and transportation, mining and metals, information technology, sports, industrial and manufacturing, education, healthcare, environment and sustainability, media and marketing, agricultural sectors are also embarking on the path of rapid development.
Saudi is embarking on the path of highly-accelerated growth by aiming to increase foreign investment from 3.5% to 5.7% by 2030. It also aims to bring down its unemployment rate to 7% from the current 10.1% (2022) by 2030 with more opportunities and educational facilities.
3. New Regulations
The Kingdom of Saudi Arabia has been putting efforts into developing its labour market so that it is more appealing to international companies and open to diversity. For instance, the Labor Reform Initiative (LRI) aims to support the Ministry’s vision of establishing an attractive job market, empowering, and developing labour competencies, and developing the overall work environment in the Kingdom.
The goal behind this initiative, which came into effect in 2021, is to improve the contractual relationship between employees and employers and attract top global talent to the country.
Saudi Arabia also intends to catapult women's participation from 22% to 30% by 2030, which has already been exceeded by 12% in the first quarter of 2022. Women's entrepreneurship will skyrocket as efforts to improve women's rights are stepped up.
These initiatives will not only benefit local businesses but also foreign businesses looking towards setting up or investing within the country.
The fast-paced and constantly evolving Saudi economy makes for a dynamic job market. Vision 2030's robust development planning and strategy will generate several emerging sectors that will propel the country beyond 2030. However, to make this vision a reality, businesses in Saudi Arabia need the right talent.
The task of filling challenging roles with the right talent is our strength. TASC is one of the leading recruitment and HR solutions specialists in Saudi Arabia. In line with the Saudi Vision for 2030, we are committed to boosting businesses by providing outstanding "people solutions" across Saudi Arabia. Our 15+ years of local and global recruitment experience and a strong on-the-ground presence in Saudi Arabia have assisted businesses in overcoming their recruitment challenges in a flourishing economy by providing them with the finest talent available.
Our competent recruitment solutions help businesses meet their Saudization targets to meet Vision 2030 objectives quickly and effectively.
So, if you’re a business seeking highly skilled talent on a contractual or permanent basis, the team at TASC is here for you. Contact us today to learn more about our recruitment solutions.
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