Saudi Arabia’s New Job Localization Policy: Implications for Indian
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Raven Ruma
- . July 22, 2024
- . Update: July 22, 2024 10:04 pm
Recently, Saudi Arabia adopted a radical policy including a reserve quota in the private sector meant to boost employment chances for its people. Effective starting on Sunday, this new rule requires a 25% reserve for Saudi nationals working for private corporations in technical professions. This major change fits the Kingdom’s larger plan to improve Saudi nationals’ employment opportunities and complement its ambitious economic targets.
The 25% Reservation Quota
Under the new Ministry of Human Resources and Social Development regulation, Saudi nationals must occupy 25% of engineering roles in private sector enterprises. This project intends to increase local engineering employment by means of cooperation with the Ministry of Housing and the Ministry of Municipal and Rural Affairs as well. Reflecting a strong drive towards rising the Saudi workforce in important technical areas, the Ministry has said that this program will “provide better job opportunities for Saudi men and women.”
Effect on Private Sector Businesses
The policy will influence any private sector company using five or more engineers. These enterprises now have to follow the localization quota or risk legal consequences. This action emphasizes the Kingdom’s will to apply these new employment criteria and guarantee significant involvement of Saudi nationals in the engineering sector.
Vision 2030 and Saudization
Under Crown Prince Mohammed bin Salman’s larger Vision 2030 effort, which Saudi Arabia is implementing, the new job localization program fits. Vision 2030 seeks to diversify the Kingdom’s economy, therefore lessening its reliance on oil and improving many other areas. “Saudization,” which stresses giving Saudi nationals top priority for career prospects across several sectors, is at the core of this program.
The Vision 2030 initiative aims high, lowering unemployment in Saudi Arabia to 7%. Reducing dependency on foreign labor and improving local employment help this approach to reach that aim.
Connotations for Indian Professionals
The implementation of this reservation system is probably going to have significant effects on Indian professionals who yearly come to Saudi Arabia in search of work. Historically, engineers among other highly qualified and semi-skilled Indian professionals have been frequent visitors to Saudi Arabia. With 178,630 Indians arriving to the Kingdom in search of employment, Indian migration to Saudi Arabia surged dramatically in 2022 alone.
The new reservation system should help to lower the availability of engineering jobs for foreign experts, particularly Indians. This shift can affect Indian job seekers in the Saudi engineering industry, therefore restricting their chances in favor of native candidates.
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Strategic Realizations for Indian Professionals
Those Indian businesses and professionals that operate in Saudi Arabia could have to adjust to these developments. For people, this can entail looking at other employment markets or industries less impacted by the new regulation. For businesses, it could mean modifying their labor plans to meet the localization criteria and keep operational effectiveness.
Last Thought
The new job localization policy of Saudi Arabia marks a dramatic change in the Kingdom’s attitude to private sector employment. The strategy seeks to boost local employment and promote the more general objectives of Vision 2030 by requiring a 25% reserve for Saudi nationals in technical professions. For Indian professionals, who would thus have less prospects in the engineering field, this strategy also has consequences. Professionals and companies both will have to carefully negotiate changes as Saudi Arabia develops its economic and employment policies to fit the Kingdom’s new laws and strategic goals.
