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Insights   >   Saudi Vision 2030: 4 Key Employment Considerations in Saudi Arabia

Saudi Vision 2030: 4 Key Employment Considerations in Saudi Arabia

Author: TASC Staff Writer
May 24, 2022
Employers • KSA

Ever since the launch of the sensational "Vision 2030" program in 2016, Saudi Arabia, or the Kingdom of Saudi Arabia (KSA) has been making great strides to become one of the greatest and most economically independent countries in the world. In short, Vision 2030 is focused on the idea of creating a modernized investment and legal framework that will boost the economic activity, mainly the private-sector activity, and attract foreign investors, which in turn will diversify the economy while still keeping the local workforce's best interests in mind.

To achieve this vision, several reforms have already been implemented and more will be implemented soon, considering how fast-paced the plan is. So, in light of that, this article will focus on some of the key employment considerations that a business operating in the Kingdom will have to keep in mind if they are willing to reap the benefits of the opportunities presented by "Vision 2030". Read on for the four key employment considerations in Saudi Arabia along with the major employment developments that are likely to happen in the upcoming years.

      1. The Legalities Associated with Employment

Any business wanting to invest in the KSA should know the legal framework of the country safeguarding employee rights. The critical points are:

  • Expat workers may only be employed for a fixed contract term that needs to be renewed annually.
  • A Non-Saudi national working under the sponsorship of one employer is prohibited from working for another employer without formally transferring their IQAMA.
  • An employee of any nationality can be asked by the employer to be on probation for a period not exceeding 90 days.

       2. The Working Environment of the Business

There are certain rules that a company will have to follow to meet employee rights' oblogations, no matter the nationality. One such right is that the employers will have to make a contribution towards the General Organization for Social Insurance (GOSI) for their employees. In addition to this:

  • The employers cannot ask their employees to work more than the maximum working hours prescribed for an individual. This is eight hours a day and a maximum of 48 hours a week.
  • The employees are entitled to a minimum of 21-days paid holiday in a year that increases to 30 days post a five-year tenure of service.
  • Employees have the right to claim compensation on account of unlawful termination.
  • Employers must cover the medical insurance and expenses for the employees and their dependents.
  • An end-of-service award is payable on the termination of employment. It can be based on the length of service and the last pay taken out by the employee.
  • The retirement age is 60 and 55 for men and women respectively.

These employment considerations cannot be ignored because they are based on Shari'ah Law. And to take care of the legalities behind setting up a business in the KSA, a good business requires a good Government Relations Officer (GRO) service. Without it, a company cannot even begin to operate. So, if businesses need the best, TASC is the way to go considering how they are the best recruitment services company working and their GRO services take care of everything a business needs to set up its operations. This allows the owners and the entrepreneurs plenty of time to focus on their business growth, logistics and operations.

      3. Saudization of the workforce

The term "Saudization" ​​is the nationalization policy of encouraging and prioritizing the employment of Saudi nationals. It is one of the vital points that a foreign business investor should keep in mind. Businesses having difficulty in finding a Saudi national fulfilling their requirements do not need to worry because employment agencies like TASC have been helping companies acquire human resources on either contract or permanent basis in Saudi for years now. TASC currently has an active database of over 100,000 Saudi Nationals. There is a specific percentage of Saudi nationals that a business should have in its operations depending on the industry and the size itself to meet and keep their Nitaqat status green.

          4. Women's participation in the workforce

A prominent goal of the "2030 Vision" is to increase the percentage of women in the workforce from 20% to 30%. Since September 2018, some of the domains have been restricted to Saudi women only and this is known as 'feminization'. It's a great effort by the Saudi government, considering how women need better representation in the workforce globally. So, any new business trying to set up shop in the KSA will have to help the government realize its vision sooner by employing a certain percentage of women workers.

Furthermore, as women graduates are increasing day by day, there is a need to address the issue of businesses hiring fewer and fewer women employees for their workforce. Keeping all this in mind, businesses not only have to hire a certain percentage of women workers, but they also have to comply with some of the requirements set by the labour laws. These requirements are:

  • Employers must provide a separate workspace that is segregated from men, and both genders should not stay alone together in a workplace.
  • Female staff must wear modest and non-transparent clothing.
  • Women may not work night shifts.
  • Women are not allowed to work in hazardous or harmful jobs like construction workers.

Besides this, they will also enjoy some additional rights, for example, getting a 10-week maternity leave or getting a 24-month stay without getting dismissed if the child born has special needs or if the woman employee has health issues after delivery.

To summarize, the principal goal of Vision 2030 is to create jobs whilst developing various sectors to supercharge the growth of the economy. For example, the expansion of the retail industry is expected to create more than 1 million jobs for Saudi nationals by the year 2030. As the country aims to move into a new era with "Vision 2030", local and foreign investors seeking to capitalize on the new and fruitful opportunities will need to consider these employment-related policies. Failure to adhere to the new employment framework is not optinional. However, businesses do not need to worry, reach out to us to discuss all your business set up, GRO and recruitment requirements in Saudi Arabia. TASC offers 100% compliance to all labour laws for all businesses in Saudi.

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