Government’s carrot-and-stick approach to reduce unemployment among Saudis appears thwarted by mismatch between Saudi candidates and the available jobs. Elizabeth Dickinson reports
Saudi citizens say they can’t find work, despite expat exodus
Saudi Arabia has no shortage of jobs these days.
When one million of the country’s 8.5 million expatriate labourers left this year as part of a government drive to limit illegal labour, shops were left untended and cars unwashed. Schools could not find teachers and students lost their tutors.
Yet even as posts are left vacant, many Saudi citizens say they cannot find work. Roughly one in three Saudis under the age of 30 is unemployed, as well as 35 per cent of women, government statistics say.
The government is trying to close that gap with a carrot-and-stick approach of reducing expatriate workers and convincing Saudis to take private-sector jobs.
Communications, information technology, the financial industry, health care and tourism are among the most promising industries for Saudi employment, said Alaa Zeitoun, head of governance solutions for the MENA Booz Allen Hamilton office in Abu Dhabi.
The urgency of job creation in Saudi Arabia is unique in the Gulf region, where the majority of nationals are employed by the government. At its current rate of growth, the International Monetary Fund (IMF) estimates that the Saudi labour force is growing at an annual rate of 3.6 per cent a year. If nothing changes, that will mean that 1.4 million Saudis could be unemployed within a decade
Job creation for Saudis is “the major policy issue – every policymaker you speak with has it at the top of their agenda”, said Simon Williams, chief economist for the Middle East at HSBC.
While every Gulf country has implemented policies to increase citizens’ employment in the private sector, Saudi Arabia’s is by necessity the most ambitious.
In April, Saudi Arabia announced a drive to reduce the number of foreigners working in the country illegally. King Abdullah offered a four-month amnesty, later extended to November, for expatriates to make sure their paperwork was in order.
Some four million people managed to do so, and another one million returned home.
Meanwhile, interior ministry inspectors visited companies to make sure they followed strict quotas for how many nationals they must employ. And from the beginning of this year expatriates on a spouse’s visa were unable to work without their own employment sponsor.
The new rules have occasionally put employers in a tight spot. Freelance labour, such as workers who are no longer employed by their visa sponsor, dried up overnight.
“Nowadays, it’s a little bit difficult to find a qualified candidate,” said the head of the Jeddah Tutors Academy, a group that hires private tutors on a part-time basis.
“Nobody wants to work part time ... yet there is a huge demand of private home tutors in the market.”
Moves to reduce foreign labour were aimed at clearing the way for more Saudi employment. But the bigger problem, experts say, comes from a fundamental mismatch between Saudi job candidates and the available jobs.
“I think one of the main issues is the expectation of the market,” said Sami Al Hossayen, an engineer who is in charge of the government’s Technical and Vocational Training Corporation (TVTC), a body aimed at boosting Saudi private-sector employment. “Companies expect Saudis to graduate and be very professional” without additional training, even as experienced workers “from other countries are willing to accept less salary”.
Aiming to bridge one of these two gaps, TVTC initially pays a portion of new graduates private-sector salaries, which would otherwise be lower than in the public sector.
But education is the primary way to combat this disconnect, and today occupies 25 per cent of state expenditure.
“A stronger educational system may be the most important means of promoting Saudi-isation, since Saudi citizens qualified for high-skilled positions will have a competitive edge over foreign candidates in both domestic and foreign firms,” said Abdullah Al Zahrani, vice dean of the community college at King Saud University.
Mr Zahrani is part of a growing cadre of vocational trainers honing students’ skills to match the needs of the job market. Enrolment in vocational school has grown impressively, in line with the numbers of students pursuing higher education overall. The country hopes to see 450,000 vocational school graduates annually by 2015, up from just 94,000 in 2009.
TCTV offers two-year diploma courses in 36 men’s colleges and 18 women’s colleges, with 15,000 staff for 84,600 students.
Roughly 94 per cent of graduates find jobs in the private sector after graduation, said Mr Al Hossayen. Many of the students are paired with companies before graduation, an attempt to make sure their training caters to job openings.
In addition to teaching skills, vocational training also is changing the expectations of incoming workers about the workload private companies will expect them to carry.
Mr Zeitoun of Booz Allen, which has advised the Saudi government on labour issues, argues for educators to address “all the dimensions of change needed for Saudis to become an effective component of the job market”, including building work ethic.
“The first part of the strategy is built around investment in education and training to improve labour supply, and Saudi-ising the private sector and dealing with illegal workers,” said Mr Williams of HSBC.
“These are only the initial steps, but they strike me as the right way forward.”