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Employment Outlook: Saudi Arabia

2017-04-30
by Mary Anne Thompson, founder and president, Goinglobal, Inc.

Working hard to diversify its economy and overcome the challenges imposed by fluctuating oil prices, Saudi Arabia is showing talent shortages in a multitude of job sectors and putting plans in place to combat the deficit and balance its workforce.

By Mary Anne Thompson, founder and president, Goinglobal, Inc.

Saudi Arabia is the largest economy in the Persian Gulf and a high-income country, with a gross domestic product (GDP) of 646 billion USD, a GDP per capita of 20,813 USD and a population of 31.4 million. Saudi Arabia possesses approximately one-fifth of the world’s proven oil reserves and its petroleum sector accounts for about 50 percent of GDP. Saudi Arabia’s services sector contributes about one-third of the country’s GDP, making it the second-largest industry in the country.

Saudi Arabia has taken a number of steps to diversify its economy in order to both move away from dependence on oil and gas. The latest Saudi government’s program called “Saudi Vision 2030” is meant to streamline government services and take private company Saudi Aramco public. The plan’s goal is also to reduce youth unemployment and increase overall Saudi nationals’ participation in the workforce. 

Saudi Arabia still employs significant numbers of highly skilled foreign workers predominantly in the energy and construction industries, as well as in IT, health care, teaching, telecommunications, and banking and financial services. Furthermore, the Saudi government has been investing in urban planning, transportation infrastructure, food processing and water resource management, all sectors where foreigners with the right skills can find ample employment opportunities.

Employment Outlook

Short Term

The short-term economic outlook remains bleak, with very slow projected growth of only 1.1 percent. Saudi Arabia’s economy is starting to be adversely affected by prolonged low oil prices. The country is also in the lead for job reduction among the Gulf region states. Private sector salaries are forecasted to rise at a lower pace than in previous years, with salaries going up approximately 5.9 percent in Saudi Arabia.

According to the recent surveys conducted by Middle East job portal Bayt.com, 65 percent of surveyed Saudi employers indicated they would ‘definitely’ or ‘probably’ be hiring within the next three months, and 37 percent had less than five open positions. Surveyed employers indicated the need for qualified professionals to work in business management, engineering and administration. Top roles needed are administrative assistants, sales managers, accountants, HR professionals, customer service representatives, and system administrators.

There is a skills shortage in Saudi Arabia. Employers are looking for workers who can communicate well in Arabic and English, as well as those with good leadership skills and those who are team players. Also in demand are jobseekers with post-graduate degrees in business management, engineering, administration, commerce management, computer science and information technology.

About 40 percent of respondents to Bayt.com’s survey believe the economy in Saudi Arabia will improve, and 27 percent believe there will be an increase in available jobs across industries. However, the cost of living in the country is expected to rise, and jobseekers should take this into account when considering a job offer. In the most recent salary survey, 64 percent of those surveyed in Saudi Arabia reported having medical insurance through their employer, which is a higher proportion than in any other country in the Middle East/North Africa region. Also, 45 percent of employees reported receiving housing allowances and about 50 percent report having an overall better quality of life in Saudi Arabia then in their country of origin.

Long Term

The current high level of state spending on development projects ensures robust growth in the non-oil sector, especially in new renewable energy. The non-oil sector economy grew a very modest 0.2 percent year-over-year. A recovery is expected in the coming period, but it will be very slow and deliberate.

Saudi Arabia is investing in development of its infrastructure, which translates into an increase in construction projects, such as road systems, hospital complexes, airports, ports, trading zones and economic and industrial cities, resulting in significant opportunities for both blue- and white-collar workers. These projects will be completed within ten to 15 years, resulting in a slowdown in the number of jobs within the construction sector.

Jobseekers with professional, technological and managerial skills will find that their skills remain in high demand for the foreseeable future.

Areas of Job Promise

Jobs are available in a multitude of sectors, including oil and gas, energy generation, petrochemical industry, construction, information technology, engineering, telecommunication, hospitality, education, banking and finance, defense, water and sanitation, and health care.

By Job Sector

  • Jobseekers with IT, engineering and finance skills will find opportunities in the oil and gas sector.
  • Large companies, like Saudi Aramco, also hire health care workers, such as nurses and doctors.
  • A wide variety of engineers with different specialties, project managers and accountants will find plenty of opportunities within the construction sector.
  • The Saudi government also is taking steps to expand its communications and information technology sectors, supporting growth of private companies that provide IT and communication services. Jobseekers will find ample opportunities within this expanding sector.
  • Workers with skills in the hospitality sector will find job opportunities in cities on the pilgrimage route, such as Jeddah, as well as in Mecca and Medina.
  • The banking and finance sector in Saudi Arabia is growing at a healthy rate as a result of the construction boom, and growth continues in the commercial banking sector and with the implementation of the new mortgage law.
  • Saudi Arabia’s rising industrial and economic cities provide jobs for management, IT, health care and administrative workers.
  • Jobseekers with water treatment-related skills will find opportunities within Saudi Arabia’s water treatment sector.
  • Jobseekers with defense industry skills will find opportunities within Saudi Arabia’s small but growing defense sector.

Jobs/Skills in Demand

  • Computing professionals – IT programmers
  • Engineers – especially in gas and oil industry
  • Health care – doctors, dieticians, nurses, dentists
  • Telecommunication professionals
  • Education professionals
  • Construction professionals
  • Financial and manufacturing professionals

Placement agencies cite several reasons for difficulty in filling these positions. The top three reasons are a lack of applicants with suitable experience, the fact that the most in-demand workers are already employed, and most employers requiring a high standard of qualifications.

General Salary Trends

In the most recent salary survey, the retail sector experienced the highest salary increases, while hospitality and education, despite their expansion, continued to see some of the lowest salary increases. Among job categories, HR professionals enjoyed the highest salary increase, while IT and administration professionals reported the lowest average pay increase. According to a survey conducted by Bayt.com, 58 percent of survey responders in Saudi Arabia are satisfied with their current salary, while 42 percent are dissatisfied with theirs. When asked which three industries offer the best salary package, survey responders named: the gas and petrochemicals sector; followed by the banking and finance and airline and aviation sectors.

Conclusion

Saudi Arabia is decreasing its dependence on oil and diversifying economically. While this should help the country in the long term, in the short term there are talent shortages and a multitude of job openings that are difficult to fill. However, there are plans in place to combat these challenges. There is still plenty of work for foreign nationals, though Saudis are working hard to employ their nations, as well.  

http://www.goinglobal.com/

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