Saudization and Multinationals

Saudization is a fundamental part of operating a business in Saudi Arabia, and for multinationals it comes with its own set of challenges. Last week, we focused on Saudization and SMEs which you can read here. Saudization is the nationalization scheme which aims to increase the participation of Saudi nationals in the private sector workforce. Acknowledging the challenges companies were having, the government’s reforms made Saudization easier to implement to improve the market environment for foreign investors. 

Although compliance in the scheme is achievable, it can be challenging for multinationals to find the amount of qualified Saudi nationals they need. As the number of Saudi nationals a company has to hire is based on the company size (number of employees) and its’ industry. Multinationals have to hire more people to fulfil the Nitaqat requirements and finding the volume of employees required in each department with suitable qualifications and experience can be challenging. Despite this, there are advantages that multinationals have due to their size.

Multinationals are more likely to have a clear hiring strategy as this gives companies a sense of direction, operational efficiency and proactivity. They are also more likely to have an experienced internal team who’s knowledgeable about the Saudi market. This is beneficial when it comes to candidate search, recruitment and hiring; and as everything is kept in house, HR understands the company culture firsthand and can determine who would be a suitable candidate. 

Multinationals also have the benefit of their purchasing power; bigger budgets and teams often means more power to find better employees faster. Additionally, they are able to offer larger salaries and better benefits – something that SMEs can’t always compete with. 

Looking at the challenges multinationals face with Saudization, here are some action steps to consider to help them achieve Nitaqat compliance:

  1. Developing a recruitment strategy is the first step before hiring. This way, the company and the HR staff are aware of the direction the company is moving and how to choose candidates that will fit this direction. 
  2. Implementing training programmes for graduates. Multinationals have the resources and the ability to create graduate programmes that train graduates and helps them develop their careers and in the company while keeping Saudization levels high.
  3. To hire large numbers of people in a short amount of time, multinationals can hold walk in interviews or career fairs to attract people in a range of departments that could be beneficial to their company. This will also help build a database of potential candidates for future job openings.
  4. Multinationals are also able to outsource their Saudization needs. This can be any part of the Saudization process from outsourcing strategy and consulting, recruitment or training of staff. There are many possibilities for multinationals to incorporate this into their Saudization strategy.

However you choose to achieve your Saudization requirements, it’s essential that it’s done compliantly. Multinationals who successfully achieve Saudization receive incentives that are beneficial for operating in the Kingdom. It also offers company many benefits such as being viewed as trustworthy and compliant in the market which is advantageous when working with clients and partners. 

If you require assistance with Saudization, contact us on +966 11 411 1127 or info@proven-sa.com