Saudization

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Saudization is the national policy of Saudi Arabia to encourage and enable saudi nationals,and a process of replacing expatriate workers in and across all the skill levels of the kingdom.The Saudi Government took the decision as a solution for the unemployment in the private sector. They aims at the reduction of unemployment and ensure a career path among saudies.By taking grand the slogan 'Let's Put the saudi in Saudization'(Ahmed Al-Omran,Arab News,22 August 2007).[1]



The Saudi government has enacted policies to promote Saudization, including warnings that "companies which fail to comply with Saudization regulations will not be awarded government contracts".[2] Since 2005, the target Saudization rate has been set at 75% for the private sector,[3] however in most sectors the actual rates are still much lower,because most of the Saudies were not interested to work in harder level they need desk jobs,which made the expatriates to work easily;and take part the major working area of Saudi Arabia .[4]

In June 2006, negotiations between business executives and senior government leaders, including King Abdullah, led to reductions of Saudization targets in some work sectors from 30 percent to 10 percent, and full waivers from Saudization in the case of two Chinese companies, according to discussions between US ambassador James C. Oberwetter and Saudi executives.[5]

As of April 2009, it was reported that a Saudi campaign seeks to reduce the number of foreign workers.[6]

Nitaqat[edit]

Nitaqat ("ranges" or "zones") is a Saudization program introduced by the Saudi Ministry of Labour.[7] The initiative was announced in June 2011, when the Ministry of Labour passed Ministerial Resolution no. (4040). The implementation deadline for the program was in 2013. Nearly 90,000 Indians came back from Saudi by the end of October. About 4,66,689 Indian workers have renewed their iqamas(resident permit)over the last five months of the grace period, 359,997 workers have transferrd their sponsor ship and 355,035 workers changed their job titles to legalise their status (e.g.: profession change, sponsorship change etc.)report financial express.[8]

The program classifies the country's private firms into four categories: Premium, Green, Yellow and Red. Premium and Green categories include the companies with high Saudization rates, while Yellow and Red include the ones with low rates. The classification of other companies is based on the Saudization percentage (% of Saudi employees) and the total number of employees. The companies with less than 10 employees are exempt from the program, but still need to employ at least one Saudi citizen.[9] Rapid visa services are available only to businesses that are in the platinum category of the Nitaqat system to improve employment for Saudis.[10]

Total no. of employees Saudization percentage
Red Yellow Green Premium
10 – 49 0 – 4% 5 – 9% 10 – 39% ≥ 40%
50 – 499 0 – 5% 6 – 11% 12 – 39% ≥ 40%
500 – 2,999 0 – 6% 7 – 11% 12 – 39% ≥ 40%
3,000+ 0 – 6% 7 – 11% 12 – 39% ≥ 40%

The companies receive incentives or penalties depending on the category they belong to:[11] By visiting The Ministry's Website [3],the companies would able to understand their position[12]

  • Premium-category companies (VIP)
    • Can recruit foreign workers using easier visa processing
    • Recruit employees from the Red and Yellow category companies and transfer their visas without their employer's permission
    • Get a one-year grace period when their licenses or registrations expire
    • Transfer the visas of potential employees from other companies, even when the employee has not completed two years with the first employer
  • Green-category companies (excellent compliance)
    • Apply for new visas once every two months
    • Recruit employees from the Red- and Yellow-category companies and transfer their visas without their employer's permission
    • Change the professions of their foreign employees (except for positions restricted to the Saudi citizens)
    • Get a six-month grace period when their certificates expire
    • Renew work permits of foreign employees, whose visas are valid for three months or more
  • Yellow category companies (poor compliance)
    • Cannot get new visas, but can get one visa only when two foreign employees depart
    • Cannot transfer visas
    • Cannot stop Green- or Premium-category companies from transferring their employees' visas
  • Red-category companies (non-compliance)
    • Cannot get new visas
    • Cannot transfer visas
    • Cannot stop Green- or Premium-category companies from transferring their employees' visas
    • Cannot renew employees' work permits
    • Cannot change employees' professions
    • Cannot open new branches or facilities

There are modification made in Nitaqat program [13] and there are nine new sections added in the rules.[14] Commercial Establishment,Media,Bank,Public schools,Insurance companies are the QUOTAS that must be employed by Saudi labours under this system [15] Nitaqat is being run alongside, the another initiative of The Ministry of Labour Hafiz.Hafis is an unemployment benefits national program which grants a fixed amount to unemployed Saudi citizens.Unsuccessful implementation of Saudization program,large presence of foreign employees and high rate of unemployment among Saudis,rise in youth population,unrest in the region are the factors prompting the Saudi Arabian Government to launch the Nitaqat program.[16] New phase of Nitaqat announced.The third phase of Nitaqat Saudization program will be implemented on Rajab 1 (April 20) with advanced systems to create more jobs for citizens in the private sector.[17] The Council of Saudi Chambers has reportedly asked the Labor Ministry to delay by three years the implementation of the Nitaqat program’s third phase that aims to further increasing the percentage of Saudis working in private firms.[18] The higher growth in Saudi employment in the construction sector is impressive given the particularly high wage differential from non-Saudis. Saudis in the construction sector earned a monthly average of SR3,330 in 2013, while non-Saudis earned only SR1,029.[19]

Nitaqat status for women working from home[edit]

Women working from home will be included in the Nitaqat system. For the platinum zone, those who work from home will be calculated as 30%of the total Saudi staff. For the Green zone, they will be calculated as 20%of the total Saudi staff while for the Red and Yellow zones they will be considered as 10%of the total Saudi staff. The decision will come into force on Feb last in 2015.[20] For nursing women, the decision tries to strike a balance between work and childcare. Women are allowed to take a rest for an hour or two everyday during work hours to nurse their children for 24 months after delivery. The rest hours will be included in work hours. If the business where a woman works does not have a nursery, she can nurse her child either at the beginning or at the end of work hours.[21] More than 682,000 Saudi women job seekers have refused to accept private sector employment offered to them by the Labor Ministry’s Hafiz unemployment assistance program.The number of women job seekers crossed the million barrier and now women account for about 77% of all unemployed citizens.[22] Each Saudi woman trainee in the private sector will be counted as one Saudi under the Nitaqat Saudization program, according to sources at the Ministry of Labor.This will be in coordination between the National Employment Program for Joint Training and the Human Resources Development Fund in order to create suitable jobs for Saudi women.[23]

Companies misuse Nitaqat concession[edit]

An official at the Ministry of Labour said inspection teams from the ministry are closely monitoring companies who have been exploiting people with disabilities in order to encourage their Saudization rates. The officials check on employees with disabilities during inspection rounds to identify the nature of the work, their presence at the job, and the type of arrangements and services provided to them, noting that the number of people with disabilities employed at a facility cannot exceed 10 percent.If employees with disabilities in a firm exceed more than 10 percent of the total number of Saudi employees, then each disabled worker is calculated like any other Saudi. “It is unfortunate that there are some companies and individuals who exploit people with disabilities to pump up their Saudization rates,”and Saudi workers with disabilities who are able to work are counted as four employees in the Saudization ratio. They must be paid a minimum monthly wage of 3,000 riyals and should not be counted as part of the Saudization ratio of another establishment. To recent reports which reveal that companies have been hiring Saudis with disabilities in order to boost Saudization rates as these disabled employees count as 4 employees, thus saving the company from hiring able-bodied Saudi employees at higher salaries. An executive at a private company said there are some people with disabilities who present themselves to the companies for employment in return for salaries, bonuses, and benefits. Companies are thus paying less to a disabled employee who is equal to four Saudis than they would if they hired four Saudis with salaries of more than SR 20,000 each.They offer their services. Some companies accept, refuse, others added.The Ministry of Labor and other agencies work together regarding the issue of employees with disabilities, noting that the Ministry of Labor determines the nature of disability upon interviewing the employee. They currently posted a draft to the disability employment legislation on the “Together We Improve” portal for discussion before making a decision to amend the definition of disability work and conditions for employment stipulated in Article 13. Disabled employee to count as more than one employee in Nitaqat, the individual must hold a license or identification card from the Ministry of Social Affairs or Ministry of Labor indicating the type and degree of disability. Further, work conditions and systems must be acceptable and suitable for employees based on the type of disability, and establishments should ensure all services are in place before the employee begins work.[24]

Nitaqat is aiming illegal expatriates only[edit]

Saudi Arabia’s Deputy Minister of Foreign Information, Abdulaziz Binsalamah said Nitaqat has been implemented to ensure that millions of foreign workers, including Indians who have valid documents can enjoy their entitlements.It is not affecting legal employees working in the Kingdome. The Nitaqat law makes it mandatory for local companies to hire one Saudi national for every 10 migrant workers. There has been widespread perception that the policy would lead to denial of job opportunities for a large number of Indians working there. [25]

Four Million expatriates regularise their status[edit]

Saudi Arabia has completed regularisation of nearly four million foreign workers in the second quarter of 2013 as part of its `Nitaqat` programme, with 1.18 million expats choosing to change their profession.[26]

See also[edit]

References[edit]

  1. ^ Manal Soliman, Fakeeh (May 2009). "Saudization as a Solution for unemployment The Government Perspective". Saudization as a Solution for unemployment The Case of Western Region: 77–78. 
  2. ^ http://www.arabnews.com/?page=1&section=0&article=58992&d=15&m=2&y=2005[dead link]
  3. ^ http://archive.arabnews.com/?page=1&section=0&article=70848&d=29&m=9&y=2005&pix=kingdom.jpg&category=Kingdom[dead link]http://www.arabnews.com/news/466289/
  4. ^ Ali, Abbas (Feb 2009). Business and Management Environment in Saudi Arabia. Routledge. pp. 157–160. 
  5. ^ Oberwetter, James C.; John Kincannon (2006-06-07). "A possible retreat on saudization?". WikiLeaks. WikiLeaks cable:06RIYADH4543. Archived from the original on 2011-12-27. Retrieved 2011-12-27. 
  6. ^ Saudi campaign seeks to reduce number of foreign workers[dead link]
  7. ^ KPM Basheer (2013-03-27). "Saudi Malayalis jittery as Nitaqat deadline ends today". The Hindu. Retrieved 2013-05-08. 
  8. ^ http://www.oneindia.com/india/nitaqat-many-keralites-stranded-in-saudi-1335986.html.
  9. ^ Be Aware – Focus on Kingdom of Saudi Arabia. June 2012. DLA Piper.
  10. ^ "Nitaqat system to improve employment for Saudis". Saudi Gazette. 2014-12-31. 
  11. ^ "A way-out for expats working in red and yellow category firms". Arab News. 2013-01-08. Retrieved 2013-05-08. 
  12. ^ "how will i know if the status of the company i am working for?". Retrieved 2011-07-01. 
  13. ^ "changes made in nitaqat percentage". Saudi Gazette. 2014-11-04. Retrieved 2014-11-28. 
  14. ^ "9 new activities added to Nitaqat". Saudi Gazette. 2014-11-02. Retrieved 2014-12-08. 
  15. ^ [1]
  16. ^ [2]
  17. ^ "New phase of Nitaqat announced". Arab news. 2015-01-02. 
  18. ^ "CSC asks Labor Ministry to delay 3rd phase of Nitaqat by 3 years". Arabnews. 2015-01-07. 
  19. ^ "Saudi employment in construction sector impressive". Arab news. 2015-01-11. 
  20. ^ "Nitaqat status women working from home". Saudi Gazette. 2014-12-16. Retrieved 2014-12-17. .regcon&contentid=20141216227636]
  21. ^ "Saudi Nitaqat to create more jobs for women working from home". Thomson Reuters Zawya. 2014-12-16. Retrieved 2014-12-17. 
  22. ^ "More than 682,000 Saudi women say no to private sector jobs". Al arabiya. 2015-01-04. 
  23. ^ "Saudi women trainees to be counted as staff in Nitaqat". Saudi Gazette. 2015-01-15. Retrieved 2015-01-19. 
  24. ^ "Companies misuse nitaqat concession". Arabnews. 2014-12-01. Retrieved 2014-12-02. 
  25. ^ "Nitaqat is aiming illegal expatriates only". Indian express. 2014-02-27. Retrieved 2014-12-10. 
  26. ^ "Saudi Arabia regularises status of 40 lakh expatriate workers". Zee News. 2013-07-17. Retrieved 2014-12-10. 

External links[edit]