Saudization: how to prepare for the changes

SaudizationWith Nitaqat and Taqat being implemented throughout Saudi Arabia, there are many organisational and structural changes required to align with the new processes. Companies should be preparing now so they do not see major disruptions to their businesses, targets and timelines. There are further updates to be announced on the Saudization ranges for each industry and organization size but no date is set for these yet.

 Create a Saudization plan

Creating a Saudization plan now will help organisations plan their future implementation of Nitaqat and Taqat. They should look at their recruitment strategy, should they hire more Saudi nationals to reach the quota or wait and replace expatriates with Saudi nationals when their visas expire or downsize the organisation, increase Saudi recruitment and outsource non-core business activities. There is advice and support available for companies who need it for their recruitment strategy, if you are looking for assistance, please contact Proven on +966 11 411 1127 or info@proven-sa.com .

Organizations need to be prepared for when employees’ visas expire. One option is for organizations may use expatriates whose visas are about to expire to train a Saudi nationals to take their position. This will allow companies to hire someone younger or with less experience and train them on-the-job.

Non-Saudi employee Saudi employee Replacement date
Mr. Smith Mr. Mohammed 11/22/20xx
XYZ ZYX XX/XX/20XX


Human Resources Strategy

Companies also need to create a human resource strategy that includes Nitaqat to ensure that the business still functions at maximum efficiency during implementation. The human resources strategy needs to align with the overall business goals, to ensure that Saudization is implemented using a timeframe and company resources that do not have a negative effect on the business. By strategizing before implementation, it allows all departments to prepare and minimize disruption.

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Below we outline some key areas to consider when starting your Saudization strategy.

  • Setting Saudization Objectives

This allows companies determine how they want to execute Saudization including the timeline and resources they allocate and what level of Saudization they want to achieve. To remain fully compliant in Saudization and access the benefits that this gives, companies must be in the green or platinum category which are the top two categories.

  • Forecast Employees and Company Requirements

Companies should also forecast their recruitment requirements for the next 1-3 years to allow for business growth, whilst remaining compliant with Saudization levels. An example table is below:

Job title 2017 2018 2019
Saudi Expat Saudi Expat Saudi Expat
Manager 10 30 20 20 30 10
HR Personnel 30 80 50 90 80 20
Supervisor 30 70 40 80 90 20
Sales 20 60 40 70 90 20
Total 90 240 150 260 290 70
% 27 73 37 63 81 19
  • Saudi workforce gap analysis

Performing a gap analysis allows a company to analyse the current Saudi workforce and the current job openings for Saudis and to then implement a custom strategy to achieve their Saudization goals. Throughout the analysis, consider the skills, knowledge and experience that the organization requires, and those in the Saudi workforce that possess these skills.

  • Developing Saudi work force retention initiatives

Companies also need to have a strategy to retain their Saudi employees and the best way to do this is by providing an engaging work environment.

Companies can create this engaging environment by establishing practices that develop the Saudi workforce through ways such as job performance appraisals, professional development opportunities, a competitive salary, employee benefits and reward management. By implementing these initiatives effectively companies can increase employee engagement and minimize turnover that could lead to possible non-compliance.

  • Re-evaluate and adjust the planning process to improve efforts towards Saudization

Ongoing evaluation should take place to ensure that the current Saudization plan is meeting its goals and to ensure that the company will remain compliant in the future. Companies should evaluate their Saudization plan annually as a minimum but if the company goes through any major changes then the strategy should be revisited then also.

  • Setting up a training academy within the organization

Medium to large organizations can explore the setup of internal training academies to hire and train recent Saudi graduates. This will allows the company to advance the professional skills of the Saudi employees and bring them up to the level of global standards. Treating the new hires as their future assets will be help companies to reach their long-term Saudization goals and reduce employee turnover.  

  • Outsourcing the current non-saudi work force

Companies like Proven can help you to reduce your permanent Non-Saudi workforce by providing services to outsource staff, payroll, visas and sponsorship. This reduces the number of non Saudi staff on your permanent visas and improves your ratio of non Saudi to Saudi employees.

A Saudization strategy will help companies manage their Saudization compliance, and when aligned with strategic business objectives, it will ensure that all business operations are working towards achieving the Saudization goal. Developing initiatives will ensure that compliance is achieved in the long term and the benefits received will allow companies to leverage their business efforts in the Kingdom.

For support in creating a strategic Saudization plan or with outsourcing any areas of your business, contact Proven on +966 11 411 1127 or info@proven-sa.com and see how we can help you.

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