Economic Reforms Drive Saudi Job Market Toward Sustainable Growth

Asharq Al-Awsat

24-03-2025

Since the launch of Vision 2030, Saudi Arabia has implemented sweeping labor market reforms aimed at improving workplace conditions, increasing citizen participation across sectors, and stimulating private sector growth to ensure long-term sustainability. These ongoing efforts have led to a record-low unemployment rate of 7.1% in 2024, bringing the country close to its targets and solidifying the private sector's role as a key partner in sustaining employment and attracting local talent.
Achieving this unemployment goal years ahead of schedule prompted the government to revise its targets, lowering the benchmark from 7% to 5%.
Economic and legislative reforms have enhanced Saudi Arabia's competitiveness both regionally and globally, contributing to lower unemployment and greater national workforce participation, particularly in non-oil sectors. Labor market experts told Asharq Al-Awsat that these reforms have improved job stability, enhanced workplace environments, and ensured fair treatment for all employees by reinforcing job security, wage equality, and a minimum wage policy.
Other measures include regulating working hours, leave policies, and end-of-service benefits, while mandating employer compliance with housing and transportation provisions or equivalent allowances. Structural reforms have also streamlined labor dispute resolution through mediation and arbitration.
A Leading Regional Labor Market
HR specialist Ali Al-Eid told Asharq Al-Awsat that Saudi Arabia has positioned itself as a regional and global leader in labor market development, thanks to its ambitious economic reforms. He noted that the Saudi job market has undergone significant transformations in recent years, driven by increased foreign investment, the development of economic cities, and new taxation policies, such as the value-added tax, which have strengthened the local economy.
The acceleration of digital transformation has also opened up new employment opportunities in artificial intelligence, cybersecurity, and data analytics. This shift underscores the need for greater investment in local talent to keep pace with evolving job market demands.
Al-Eid highlighted the importance of education and vocational training in bridging the skills gap, making the job market more attractive, and enhancing workforce efficiency. He emphasized that building a strong work culture that prioritizes mutual interests, career development, and job stability is key to successful workforce nationalization.
The private sector plays a critical role in this effort. According to Al-Eid, improving salaries and benefits is essential to enhancing the attractiveness of the job market, alongside providing clear career progression paths and flexible work options that encourage innovation.
Key Workforce Nationalization Initiatives
One of the most notable reforms is the Tawteen (Nationalization) program, designed to integrate job seekers into the labor market by supporting private sector companies with qualified Saudi talent.
The program provides incentives for businesses and employees, facilitates skill development through training, and fosters job stability and career growth.
Bader Al-Enezi, a board member of the Saudi Society for Human Resources, told Asharq Al-Awsat that the country is focusing on qualitative nationalization, targeting strategic sectors such as finance, insurance, healthcare, technology, and tourism. These industries offer competitive benefits and job security, making them attractive for Saudi talent.
Al-Enezi emphasized that government initiatives have successfully reduced unemployment and encouraged private sector participation through flexible policies that support job sustainability. However, he noted that over 40% of private sector jobs still require improvements in wages and working conditions. The government is addressing these challenges through incentive programs focused on training and professional development.
Among the key initiatives driving workforce nationalization is the Nitaqat program, which has increased employment rates and enhanced private sector stability. One of its latest updates raised the minimum wage for Saudi employees from 3,000 SAR to 4,000 SAR.
Al-Enezi stressed that the private sector has become increasingly committed to effective nationalization, leading to improved work environments and making Saudi Arabia's labor market more appealing to both local and international talent. This shift has also strengthened the competitiveness of businesses entering the Saudi market, supported by robust regulatory frameworks that protect workers' rights.