Assessing the Opportunities & Challenges of the Saudi Arabian Staffing Market

APSCo Global’s recent webinar on Saudi Arabia was an educational first step for APSCo members considering the KSA. In terms of developments within Saudi Arabia, the time seems right to consider the opportunities and challenges.

We were lucky enough to be joined by two experts in their field to walk us through the intricacies of the Saudi Arabian staffing market. Hashim Kapadia, Senior Regional Director of SThree, and Shahzad Syed, Marketing Director at Ateca Consulting, have nearly 35 years of experience in the Middle East between them and were able to share key insights with regards to compliance, operations, and local market context. 

Here are some key takeaways from this insightful session:

Saudi Vision 2030

The National Transformation Program (NTP) is crucial for building infrastructure and fostering an environment conducive to the success of Saudi Vision 2030 – including significant projects funded by the Public Investment Fund, aimed at economic diversification, job creation, and positioning Riyadh as a key business hub in the MENA region. Over the past four years, Vision 2030 has generated 555,000 jobs and is driving $1 trillion in new projects across 15 strategic sectors such as healthcare, IT, energy, and real estate, through over 300 initiatives.

The Public Sector’s Digital Transformation Initiatives

Saudi Arabia is rapidly advancing its digital transformation, e-government services, and investments in innovation and entrepreneurship - with adoption of Fourth Industrial Revolution (4IR) technologies, enhancing digital infrastructure, and fostering a supportive environment for digital entrepreneurs and talent development.

Labour Market Insight

Vision 2030 aims to prepare the youth for future job markets, with a focus on primary and secondary skill development. As of 2022, 84.7% of the population lives in urban areas, predominantly in major cities such as Riyadh, Dammam, Makkah, and Jeddah, where a young, educated, and tech-savvy populace is transforming consumerism, travel, and trade in the MENA region.

Members can learn how our Global Strategic Partners, People2.0, can assist your expansion with their EOR services here. 

Opportunities

Saudi Arabia's recruitment market, while dominated by local players, relies heavily on international collaborations, presenting opportunities for international firms to establish a direct presence. With an underdeveloped managed service segment and a need for process optimisation tools, there is significant potential for growth and innovation. Companies moving their regional headquarters to Saudi Arabia can benefit from special incentives.

Challenges

Operating in Saudi Arabia poses several challenges, including language barriers, the need for effective localisation and Saudization (Nitaqat), the policy of increasing the number of Saudi nationals employed in the private sector. The newly introduced tax system and complex local setup processes add to the difficulties, making compliance a critical factor for success in the region.