Saudization Guide 2019 (part 2)

Saudization challenges and solutions

Many companies struggle with Saudization and achieving high compliance in the hi-green and platinum levels. Multinationals and SMEs have different challenges related to Saudization because of their size and their advantages when it comes to Saudization.

For SMEs, common challenges they face are:

  • SMEs have smaller HR departments, if they have one at all, which means they often need support to implement Saudization in compliance
  • SMEs generally have limited resources, budget and sometimes expertise to find the suitable candidates
  • SMEs also have to compete with multinationals for candidates which is challenging when multinationals can offer higher and more comprehensive remuneration and benefits

The challenges multinationals face include:

  • The ability to find the volume of candidates and employees required for the number of open positions as larger companies need to hire more Saudi nationals to reach compliance 

These challenges are recognized by the government and they have revised regulations to make it easier for companies, for example, changes to employees effect the company’s Nitaqat rating immediately. Taking away the waiting period with Nitaqat made it easier for companies to stay become compliant. However, there are still practical steps that companies can take to improve their Saudization levels and remain compliant in the long term.

Some solutions to Saudization challenges include;

  • SMEs can outsource their Saudization for higher quality support and expertise with the process. An outsource provider can assist with the entire Saudization process and provide a strategy for an SME to implement for the long term.
  • Companies that struggle to offer their employees the competitive salaries and benefits they wish to offer should consider using a professional employer organization (PEO). A PEO will offer your company access to HR experts, assistance with tax and employment compliance and allow you to offer employees better benefits, employee training and quality insurance that larger companies are able to offer, without the expense.
  • All companies should create a recruitment strategy to reach Saudization compliance
  • Multinationals also have the advantage of size to implement training programs for graduates and hosting walk in interviews and career fairs to find a large number of candidates and build a database.

There are many ways that companies can achieve compliance and find the employees they need and also ensuring that retainment is a focus for HR to minimize employee turnover can help keep Nitaqat ratings stable.