The Ministry of Human Resource and Social Development (MHRSD) Saudi Arabia has announced that effective January 2021, expat workers will be banned from working in 117 professions across the engineering sector. The Saudi Council of Engineers has confirmed that foreign engineers with less than five years of experience will no longer be recruited.
The employers will need to amend their ratio of local to foreign hires by the end of 2020 or face penalties, including suspension of their access to online labor and immigration portals. Engineering businesses involved in critical projects have been given a three-month notice to terminate the contracts of inexperienced engineers who applied for recruitment before the decision.
The above measures are aimed at achieving a 20% Saudization rate in this industry. Saudization is the Saudi nationalization scheme to increase the employment of Saudi nationals in the private sector. It aims to give Saudi nationals a fair opportunity in the private market and reduce the reliance on foreign workers.
From the 1990s to the early 2000s, the proportion of expatriates to the total population remained comparatively stable, fluctuating slightly above or below 27 percent. But in the past decade and a half, this shifted noticeably. The recruitment of foreign workers surged between 2005 and 2010 owing to an economic boom following the worldwide increase in oil prices. Since then, the ratio of non-Saudis to the total population rose sharply and is currently estimated to be around 30%.
Many new employment opportunities were created during the boom years. Still, most were allotted to expat workers having more skill and experience. This substantial rise in the expatriate population and growing unemployment among Saudi youth has been challenging the country’s policymakers, who had been charged with improving citizens’ employment situation.
In the wake of declining oil prices and an increasing population, adjusting the disparity between recruitment of foreign workers and nationals in the private sector has emerged as one of the biggest challenges facing Saudi Arabia’s labor market. In order to achieve the 20% Saudization goal, the MHRSD will offer support packages to employers who require assistance in recruiting and training new engineers.