Creating a Workforce Model That Supports Both Saudization and Business Growth

In other words, it is sometimes hard to find the perfect match of Saudization and Business Growth. One side demands that you conform with Nitaqat rules set out by the Ministry of Human Resources and Social Development (MHRSD); these rules are strict. The other side is a demand for the possession of correct skills at the exact time needed in order to reach the company's targets.

Getting to understand this issue and finding out how to resolve it is not difficult. Do not see compliance as an HR burden. If you really want to hit your targets and at the same time get your business to run smoothly, you have to design a clever workforce model that will do just that. We show you how to do that.

Major Change: Head Count vs. Strategic Direction

Up until recent years, it has been the case that many companies have approached the problem of Saudization by just recruiting people to fill quotas and so on. This mode of operation, however, is no longer viable in modern times. There have been significant developments on the Nitaqat platform, which now includes profession-based quotas in hundreds of jobs. As a result, you may have a large number of Saudi staff overall but still get into a fix if there's any particular department where you are not adequately represented.

You, therefore, have to assess not just the overall number of personnel but also think in terms of skills and functions. That is why you need to look beyond compliance and instead align with business goals by identifying those roles that are strategic and those that have an impact on revenue. Having found out the right people, it is up to you to get in touch with the candidates and offer them an appropriate contract for your company.

3 Keys to a Balanced Workforce Model

There are two objectives you are chasing: raising the Saudi workforce level and boosting business, so your plan should include a number of these points:

1. Create talent through internship

The market is not a good place to find an expert in the field if you are looking for a Saudi professional who has limited or no experience. If you can create your own talent, then why would you bother competing with others over the few experienced professionals? This way you will be able to expose the young Saudi citizens to your specific business processes right from the beginning so that by the time they get promoted, they will have already proven themselves as productive workers, thus ensuring that you maintain your growth pace.

2. Keep Upskilling and Encouraging Advancement

Employment is just one part of the equation. Retaining staff is equally important. High rates of employee turnover may impact your Nitaqat score adversely and slow down the development of your business. Make sure that career opportunities are clearly defined for your local employees. If employees see that the company values their futures and supports their development through training and promotional possibilities, then they get encouraged to stay with the company for the long term. Such a loyal and knowledgeable team is the type of human resource one can use to initiate new projects or expand existing business ventures.

3. Apply Different Staffing Choices

Rapid changes in business make it vital to have staff that can adapt quickly. For instance, if your company gets a large project, you may need to expand your team to handle it within a short time frame. The idea of going out there and hiring a full-time staff for the duration of the project might make both your Saudisation ratios and your overhead costs go through the ceiling. By making use of flexible contract staffing or cooperating with an already established workforce solutions company, you can expand your team without running the risk of non-compliance with regulations and without affecting the company's compliance level.

Grow Safely in Saudi Arabia

The process of creating a strategy that will ensure a good level of Saudization of staff on one hand while also achieving business growth on the other hand calls not only for constant attention from managers but also for local knowledge to be utilized and very quick implementation of the proposed solutions.

With TASC KSA, we get you through all the hurdles, from recruitment difficulties and compliance with labor laws related to the payroll and visa services to you being free to pursue the core business goals you set out. We are here to make sure you don't cross into prohibited areas while expanding your business across the Kingdom. Reach TASC KSA to talk to our experts in workforce planning at a national level.

Commonly Asked FAQs

1. What is the Nitaqat program?

Nitaqat is a system initiated by the Saudi government that evaluates private firms and classifies them into color codes (Platinum, Green, and Red) based on their level of Saudization which measures the percentage of Saudis in the company, essentially.

The better your color code, the more benefits you can expect in terms of visas, etc., and business license issues will become less complicated for you.

2. Is a company fulfilling its main quota enough to stay compliant?

Not really.

The legislation these days also includes different quotas depending on professions. So, your situation will remain the same: if your overall company strength is sufficient and you are in the correct zone, but within sectors like accounting, IT, or engineering you are not in compliance, you run the risk at that end as well.

3. What happens if my company is assigned a red zone?

If the company is classified at the lowest level (red zone), it indicates that the company has not satisfied the minimum localization standards. The consequences can be quite heavy in terms of penalties, stops on new work visas being granted (and possibly revocations of existing ones), and blockages on foreign worker contract renewals.

4. How does a high staff turnover rate affect your Saudization rating?

Nitaqat's system constantly reviews employee information. When a local staff member resigns, the percentage showing company compliance drops immediately, which might result in getting a lower level, depending on whether it is replaced quickly or not.

5. How can contract employment aid in meeting the requirements?

Hiring workers through the contract method via an authorized human resources partner is a way of introducing specialists to work on particular projects. Employers can cope with fluctuating workloads without affecting the ongoing workforce that contributes to Nitaqat compliance ratios for a given period of time.