Saudi Arabia Labor Market Report G20

Saudi Arabia Labor Market
Report
G20 Labor and Employment Ministerial Meeting
Ankara, September 2015
“In the Name of Allah
The Most Gracious The Most Merciful”
Custodian of the Two Holy Mosques
King Salman bin Abdulaziz Al Saud
His Royal Highness

Prince Muhammad bin Naif bin Abdulaziz Al Saud
Crown Prince, First Deputy Prime Minister and Minister of the Interior
His Royal Highness

Prince Mohammad bin Salman Al Saud
Deputy Crown Prince, Second Deputy Prime Minister and Minister of Defense
Contents
5 THE MINISTER’S MESSAGE
7 EXECUTIVE SUMMARY
1 1 WELCOME TO SAUDI ARABIA
1 5 THE LABOR MARKET – WHERE WE STAND
1 9 LABOR MARKET CHALLENGES
2 7 TRANSFORMING THE LABOR MARKET
3 3 IMPACT AND CASE STUDIES

Inclusiveness
Investment
Implementation
4 7 FUTURE AND OUTLOOK
4 | Saudi Arabia Labor Market Report for G20

The Minister’s
Message
I t is with great pleasure that I introduce this year’s report on Saudi Arabia’s labor
market to the G20 Group.
Employment is one of the highest priorities for governments throughout developing,

emerging, and developed countries. It provides the foundation for economic growth
and is a key lever in building a successful nation. Despite increased global optimism
about employment over the past year, underlying issues that have been present since
the financial crisis remain for many countries. As a proud member of the G20, it is a
great privilege for us to continually learn from fellow G2O countries, and share with them the
practices and policies that we have found effective for addressing these labor issues.
This report first reflects on the challenges that Saudi Arabia has faced. In many ways, our
challenges are often unique. Our high reliance on foreign labor is an example of this. At the
same time, there are many areas where we have issues and goals in common with countries
across the globe; for example, high youth unemployment. With these challenges at the
forefront of our concerns, we have developed and implemented a labor market strategy. This
report presents the overall labor market strategy and delves into some of the highlights.
The implementation of our strategy relies heavily on the use of modern technology paired with
the agility of the private sector in executing the initiatives. The National Labor Gateway, our
new online job marketplace, is just one example of the strides that we have taken forward in
the regard. Leveraging technology to its maximum capabilities in order to leapfrog the
development of other countries, is essential for countries that do not have a rich history in this
respect.
I strongly believe that the ability to generate innovative policies lies in cross-country
collaboration. We welcome and value input from other G20 member countries and international
organizations on how we can better proceed and address the prevailing challenges that many
of our nations face today. I am confident we can benefit each other as we work together. I
encourage you to share your comments and suggestions in response to this report, and look
forward to hearing them in our meetings at the G20 group sessions.
Dr. Muffarij Al-Haqbani, Minister of Labor, Kingdom of Saudi Arabia
Ministry of Labor, Kingdom of Saudi Arabia | 5

Executive Summary
O ver the past few decades, Saudi Arabia’s impressive rate of economic development has
given the country standing as a key G20 member state. The country, and more specifically,
its labor market, is currently undergoing a large-scale transformation that will enhance its
economic growth even more over the coming years.
Year-on-year, there have been improvements in the labor market within the country. In 2014,
the unemployment rate was 5.7 percent and the labor force participation rate was 54 percent.
While these rates are comparable with other G20 nations, there is still more potential remaining
in the economy to grow and improve these figures.
While Saudi Arabia has benefitted substantially throughout this transformation, it has also
encountered many obstacles on the path to “shaping a healthy labor market with competitive
and fulfilling jobs to support the Kingdom’s future success.” The Ministry of Labor in Saudi
Arabia has prioritized five of the main challenges:
•• There is a lack of competitive and fulfilling private sector jobs attractive to Saudi nationals
•• There is an overreliance on expatriates in the private sector
•• Youth unemployment is higher than the Saudi national average for unemployment as a
whole
•• The demand for labor is not efficiently being matched with the supply of labor
•• Women’s labor force participation continues to be lower than men’s
In response to these concerns, the Ministry of Labor, along with its sister entities, has built a
defining strategy that will aid in advancing the labor market. Through significant investment
and rigorous analysis, and from lessons learned from other countries, over 140 labor programs
have been put in place. Each program has been designed as an important piece of the five main
pillars, which together make the Labor Market Strategy:
•• Creating competitive and fulfilling jobs in the private sector

•• Developing the skills of the Saudi workforce
•• Increasing the proportion of Saudis who work in the private sector
•• Providing the fundamental mechanisms for a healthy labor market
•• Taking care of people through social protection
The successful implementation of this strategy cannot be done alone. To succeed, we continue
to rely heavily on the use of technology to create online programs and to keep the population
up to date with labor-market information. In addition, the implemented policies require active
buy-in from the private sector, as this will be the sector that creates the jobs and absorbs an
increasing number of Saudis into the labor force moving forward. Finally, and most importantly,
this strategy relies on Saudi individuals themselves. They must take advantage of the programs
on offer and spend the time investing in themselves in order to move the country forward.
There are many initiatives that hold promise for Saudi Arabia and its labor market:
•• The creation of six Economic Cities is diversifying the economy away from its reliance on
oil and will create millions of new competitive and fulfilling jobs for Saudis
•• The Career Education and Development program has already benefitted over 50,000 young
people who have taken part in programs to prepare themselves for entry into the job market

•• The National Labor Gateway will serve as an efficient online matching mechanism, helping
job seekers find the right job
•• Ma’an, the online platform to engage the public on policymaking, has had over 228,000
unique visitors in the space of one year
It must be noted that many of the programs are still in their early stages and their impact is
expected to increase significantly in the future.
The government is confident of a very positive outcome from its labor market strategy, but is
aware that there remains much to be learned from the experience and knowledge of other
countries, international organizations, and labor market experts. This report is an open
invitation to you to give your feedback on our current and future plans and objectives.

Welcome to
Saudi Arabia
Introduction
T The Kingdom of Saudi Arabia is the largest Middle Eastern Arab country, occupying
870,000 square miles, or 70 percent of the Arabian Peninsula. The modern state,
established in 1932 by King Abdulaziz Al-Saud, has a rich history and vast resources.
King Salman, the seventh King of Saudi Arabia, and the current Custodian of the Two Holy
Mosques, ascended to the throne in January 2015 following the passing of his brother, the
influential King Abdulla.
This succession has led to several changes, including the naming of a new Crown Prince and
Deputy Crown Prince. At the same time, two new entities were created to lie at the core of the
new government: the Council of Economic and Development Affairs (CEDA) and the Council of
Political and Security Affairs (CPSA), which were created in order to streamline efforts to
develop and implement strategies that are essential for the Kingdom to prosper in the coming
decades.
Saudi Arabia is a multi-faceted country. In addition to being the cradle of Islam, it is the world’s
largest oil producer. The country has grasped the golden opportunity to embark on a journey of
transformation with both social and economic dimensions. The labor market and its role in
employing our young people and others is vitally important to the fulfillment of the country’s
goals. It has a huge part in shaping Saudi Arabia’s future.
Demographics and economics of Saudi Arabia

Today Saudi Arabia has a population
Exhibit 1: Population growth in Saudi Arabia
of 31 million people, compared with (1970 -2014)
7 million in 1975 and 20 million in Number of people
2000, as shown by Exhibit 1. It is 40,000,000

CAGR
(00–14)
not only a rapidly growing nation, 30,000,000
but a young one, with 46 percent of +4%
20,000,000 3%
the population below the age of 25.
10,000,000
6.5%
Saudi Arabia’s population has 0
increased at an average annual rate 1975 1980 1990 2000 2010 2014
Year
of 3 percent since 2000. This has Saudi Non-Saudi
largely been due to the growth in Source: Saudi Arabia Monetary Agency (SAMA) Annual
the expatriate population, which Statistics
has outpaced the growth of Saudi
nationals – the number of expatriates has grown 4 percent per year since 2000 compared with
a 2 percent annual increase in Saudi nationals.
Expatriates have consequently become a strong pillar of Saudi Arabia’s economy and account for
a significant portion of the 11.3 million-strong labor force. They have helped to build the nation’s
economy over decades, and helped alleviate issues of workforce and skill shortages. Their
growing number reflects the strong growth and attractiveness of the Saudi Arabian economy.

Saudi Arabia is the world’s nineteenth largest economy in terms of GDP and its represents 1.2
percent of the world’s GDP. Its GDP per capita (based on purchasing power parity) in 2014 was
approximately $52,200. In 2014, the economy grew by 3.6 percent in real terms, 1.1 percent
higher than the preceding year. Additionally, welfare within the Kingdom has been improving.
This is reflected in the United Nations Human Development Index where it rose from fifty-
seventh to thirty-fourth position in 2014, increasing its rating from “high” to “very high.”
Saudi Arabia recognizes the

Exhibit 2: GDP per capita (PPP) in Saudi Arabia importance of diversifying the
GDP per capita $, (PPP)
economy away from its historic
55,000 reliance on oil. This sector remains
50,000
the largest and by far the most
+5%
productive sector – generating 43
45,000
percent of real GDP. But other parts
40,000 of the economy have kept pace in
35,000
recent years, and their significance
is increasing, as shown in Exhibit 2.
30,000
2004 2006 2008 2010 2012 2014
Saudi Arabia
Exhibit 3 shows that the non-oil Year
private sector is increasingly

Source: World Bank
contributing to GDP and accounted
for 41 percent of nominal GDP in
2014. This growth in private business has significantly contributed to the growth in the number
of expatriates in demand, often because they supply skills which are not available locally.
Conversely, Saudis dominate the large public sector, accounting for over 87 percent of the
employed, while 83 percent of workers in the private sector are foreign. Two-thirds of employed
Saudi nationals work in the public sector.
Exhibit 3: GDP split for oil, private, and public sectors in Saudi Arabia (2000-2014)
GDP growth by sector, 2000–2014
US $, current prices CAGR

800 (00–14)
739 747
728
665 16% 17% 9%

15%
+10% 15%
600
516 523
13% 34% 38%

17% 41% 11%
426 34%
413
400 374 15% 18%
32%
326 16% 38%
16%
256 34%
33% 41%
214 18%
187 188 34%
200 182 21% 50%
21% 22% 22% 51% 47%
38% 43% 11%
55%
38% 45%
38% 41% 41% 50%
51% 41%
50%
41% 43%
41% 37% 37%
0
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Oil Sector Private sector Gov’t sector
Source: CDSI

The Labor Market –
Where We Stand
T his chapter explains the present state of affairs in the Saudi labor market and examines
the main challenges it faces.
A major economic transformation has been occurring in Saudi Arabia, bringing with it prosperity
and the increased demand for labor that prosperity brings.
Recently, Saudi Arabia has satisfied this demand by welcoming an influx of expatriates, who
currently make up 33 percent of its 31 million residents. Despite the contribution of this
expatriate workforce, Saudi Arabia’s overall labor force participation rate in 2014 was among
the lowest for the G20 nations, at only 54 percent compared with an average of 60 percent.
The most prominent reason for this is that of the 10.3 million Saudi women, only 1.8 million are
part of the labor force, a mere 18 percent, compared with 78 percent for males — high by
international standards.
Exhibit 4 shows a basic overview of the Saudi Arabian labor market. The
How have other
overall unemployment rate currently stands at 5.7 percent, but this
figure rises to 12 percent when considering only Saudi nationals, countries determined
indicating that the low overall unemployment figure in the country is what drives their
driven by non-Saudi labor. This is relatively high by international participation rate?
standards, and so has been addressed by the government with programs
such as Nitaqat that aims to increase the number of Saudi nationals
working in the private sector.
Exhibit 4: The Saudi labor market at a glance
Total Population : 30.7 million
31% (9.6 million)

Expatriates
29%
Not in (8.4 million)
working age
54%
In the (7.3 million)
labor force
94%
of Saudi (4.0 million)
male labor
force employed
66%
of Saudi (0.8 million)
female labor
force employed
5.7%
Unemployed
(0.7 million)
Source: CDSI

Saudi Arabia has been successful in engaging the public and increasing the workforce
participation rate within the country, which currently stands at 54 percent. But despite a large
number of jobs being created, young people have not been absorbed into the private sector in
adequate numbers, and therefore the number of unemployed people has risen slightly. Taking
this into consideration, creating attractive and rewarding jobs is a priority for the government.
As in many other G20 nations, the young and women have higher than
Where and how have average unemployment rates. Both groups are a priority for the
government, which recognizes that inspiring and training youth, and
governments successfully
increasing female participation, are essential to sustainable economic
tailored their policies to success for a young and rapidly growing nation.
specific regions?
Each of the 13 regions of Saudi Arabia is different from the others, and
are therefore at different stages of maturity in the job market. As Exhibit
5 shows, the employment rate varies from 4 percent to 20 percent across the country. Al-Jouf,
in the north of the country, is the region with the lowest overall unemployment rate, whereas
the highest regional unemployment rate is in the Northern Frontier.
Exhibit 5: Unemployment rate for Saudis by region (2014)
Hafizians in the region

(% of working age population)
1 Average: 4% 7 Average: 9%
1 13 • Male: 3% • Male: 6%
Al-Jouf Northern • Female: 9% • Female: 27%
Frontier
2 2 Average: 10% 8 Average: 15%
Tabuk
• Male: 5% • Male: 10%
Hail 12 • Female: 29% • Female: 34%

Al-Qassim • Male: 6% • Male: 5%
• Female: 45% • Female: 26%
Ai Madinah
• Male: 5% • Male: 8%
Al-Riyadh
4 Makkah Eastern Region 9 • Male: 3% • Male: 7%
6 Average: 9% 12 Average: 13%

5 • Male: 5% • Male: 5%
Al-Baha Asir
6 Najran 8
13 Average: 20%
Jizan • Male: 9%
7
• Female: 45%
Both genders above average composition

Region with higher than country-level unemployment rate Female above average composition
Region with lower than country-level unemployment rate Both gender below average composition
Source: CDSI
As Exhibit 6 shows, government sectors – education, public administration, and defense – are
important employers for Saudis. Since the public sector will not be able to grow indefinitely,
most of the jobs needed for the expanding Saudi population will have to be created in the
country’s private sector, where there are comparatively few Saudi workers. Of the few Saudis
in the private sector, the majority are employed in trade, construction, agriculture, and
manufacturing.

(k)
0
100
200
300
Wholesale and
278
retail trade
17%
Source: CDSI
Agriculture, forestry
237
and fishing
Manufacturing 14%
189
11%
Transportation
174
and storage
11%
Construction
8%
130
Financial and
6%
106
insurance activities
Mining and
6%
100
quarrying
Administrative and
76
5%
support service activities
Real estate activities

66
4%
Information and
64
4%
communication
Electricity, gas, steam, and

59
4%
air conditioning supply
Other service activities

51
3%
Professional, scientific,
36
2%
And technical activities
Accommodation and
35
2%
food service activities

Exhibit 6: Private sector Saudi employment by economic activity (2014)
Professional, scientific,
34
2%
& technical activities
Arts, entertainment,
9
and recreation
1%

Labor Market
Challenges
A gainst a backdrop of rapid economic growth, cultural tradition, and an extremely young
population, very specific challenges for the Saudi Arabian labor market have emerged. The
country is now at the stage where those born during the population boom of the 1980s and
1990s are entering the workforce in exceptionally large numbers and will continue to do so
over the coming years.
In this section, we select some of the key figures highlighted above, and describe the five main
challenges that have been identified and investigated by the government of Saudi Arabia,
namely the lack of competitive and fulfilling private sector jobs, the reliance on foreign labor,
youth unemployment, inefficient job matching, and female unemployment. These form the
basis of the Labor Market Strategy, which will be examined in the next chapter.
Overcoming these challenges represents a huge opportunity for Saudi

Arabia to unlock its potential and create sustainable economic growth How have other countries
in the mid to long run. For this reason, the government has highlighted absorbed large numbers
the labor market as a key area of development in building a prosperous entering the labor market?
nation.
The private sector lacks the competitive and fulfilling jobs to offer attractive opportunities
to Saudis
The private sector has grown Exhibit 7: Segmented labor market in KSA
immensely over recent decades, (2014)
but it is the public sector that has
Millions employed
absorbed the large number of 15
0.5 million
5%
Saudis entering the workforce. This
has resulted in a significant divide 3.9 million
27%
in levels of Saudi employment, with
two-thirds of employed Saudis
10
working in the public sector (as 8.6 million
95%
shown in Exhibit 7).
Saudi nationals find public sector

work to be their most attractive 5
10.3 million
73%
option as it is perceived to be more
3.4 million
prestigious than working for private 67%
employers. Small and medium-

1.7 million
sized enterprises (SMEs), in 33%
0
particular, are not as attractive due Saudi Expats Total
to a perceived lack of Public Private
professionalism in their working
Source: CDSI Manpower Survey 2014
conditions and working practices.
Especially at the early stages of a
person’s career, the public sector offers better pay, hours, and working conditions than most
jobs in the private sector.

As shown in Exhibit 8, average
Exhibit 8: Public vs. private sector wage gap
(2004 -2010) wages in the public sector tend to
CAGR (%)
be higher than in the private sector,
(2004–2010, %)
Average wage (SAR/month) and this gap has widened over time.
8,000
+9.4% +5.8% Exhibit 9 shows that many public
6,000
sector jobs require 40 hours of work
4,000 –2.5%
or fewer, while private sector jobs
–4.1%
often demand six days and over 50
2,000
working hours per week.
0
2004 2005 2006 2007 2008 2009 2010
Only the most qualified applicants,
Public sector wages (total) Private sector wages (Saudis)
usually college graduates, are likely
Source: World Bank
to find better entry-level pay and
conditions in the private sector.
The private sector also does not offer the same level of job security as the public sector, and
many private companies do not provide sufficient opportunities for personal development
through training and mentoring.
Exhibit 9: Majority of Saudis work in public sector
Weekly working hours

Private sector
70
Wholesale and
60 retail trade
Administrative and
Manufacturing support service activities
Human health and

social work activities
50
Public sector
Construction Mining and quarrying
Inf ormation and communication

Other service
40 activities
Arts, entertainment,
and recreation
0 20 40 60 80 100
Share of Saudis (in %)
Private Public Domestic Relative sector size
Source: CDSI
The low participation of Saudis in the private sector is not only driven by job-seeker preferences.
Employers also do not actively seek out Saudi nationals when filling positions, and often claim
that the lack of proper preparation and skills makes it more convenient to find alternative
sources of employees abroad. Fueling growth in this way, instead of investing in training and
mentoring of Saudis, inhibits the creation of mid- to high-skill-level jobs for which these
nationals would be suited.
The importance of family and community role models is also a factor in

What can Saudi
the public-private career choice. Family traditions of working in the
Arabia learn from the public sector, the higher social prestige of government jobs, and a
productivity trajectory of decided preference for white-collar employment all reinforce the
other countries? preference. As a result, younger workers often prefer to stay jobless and
wait for a public sector vacancy.
It is clear that formulating programs that create attractive private sector jobs is of key
importance. This can be done by improving job security and working conditions, and changing
the reputation of the sector. Furthermore, initiatives that create competitive and fulfilling jobs

will result in higher wages, further heightening the attractiveness of the private economy for
Saudis.
Saudi/expatriate employment divide

In recent years, the private sector has relied heavily on the foreign workers, or expatriates, who
currently make up 83 percent of the private sector workforce. Although the number of Saudis
in the private sector has been increasing, a large gap between Saudis and expatriates remains.
Expatriates come to Saudi Arabia to benefit from its economic growth

How can Saudi Arabia
and strong job prospects. Their skills and experience have enabled rapid
economic development. accelerate the growth of its
private sector employment
The 5.7 percent unemployment figure in Saudi Arabia, as mentioned of nationals?
previously, is promising on the surface, but a closer look at the underlying
figures indicates a clear divide. It is actually primarily Saudis who are
unemployed. For Saudis alone, the unemployment rate is 12 percent (see Exhibit 10).
Exhibit 10: Benchmark of unemployment rates, G20 countries (2014)
(%)
30
25
National
20 (Saudis only)
15
Overall KSA
(Saudis & non-Saudis)
25 25
10 G20
average
8
12 13
5 10
9
6 6 6 6 6 7 7
5 5 5 5
4 4 4 4
0
Source: ILO
Within the workforce, Saudis and

expatriates differ on two key Exhibit 11: Saudi - expats skills divide (2014)
dimensions: skills and salaries. As
% of employed people
can be seen in Exhibit 11, Saudis 100
outnumber expatriates only in 80
medium-skill jobs. For low-skill 60

jobs, expatriates command lower 85
40
salaries than Saudis, and in general, 56 57
20 44 43
few Saudis are willing to work in
15
these positions. For high-skill jobs 0
Low skilled jobs Medium skilled jobs High skilled jobs
there is often a shortage of suitably
Saudis Expats
skilled Saudi labor, leading to a high
Source: CDSI Manpower Survey
reliance on skilled expatriates. All
of these factors mean that
expatriates tend to be more competitive for most jobs in the private sector.
With the private sector continuously growing, the onus is on Saudi Arabia to augment the skill
set of their young people, which will, in turn, decrease the reliance on foreign workers.

Youth unemployment
Saudi Arabia is a country blessed with an exceptionally young population. Seventeen million
Saudi nationals — 55 percent of the population — are under age 29. Every year, approximately
400,000 Saudis enter the labor market, but these young people face a very high unemployment
rate – roughly 42 percent in 2014 (See Exhibit 12).
Exhibit 12: Youth (15-24) unemployment in selected countries (2014)
Saudis
42% only
53%
51%
Selected
19 counties
average
30%
23% 23%
19% 17%
15% 13% 14% 13%
11% 10% 9% 8% 7%
3%
Source: ILOSTAT
This high unemployment rate is due largely to the significant mismatch between the skill set
of Saudi youth and the specific skills demanded by the private sector. The lack of job-relevant
skills is a common challenge even among those holding Bachelor’s or Master’s degrees, and
increases the difficulty of a smooth transition from school to work. In the 20- to 24-year-old
group, almost one Saudi out of three is classified as NEET (Not in Education, Employment, or
Training), highlighting the difficulty of entering the labor market and the school-to-work
transition.
Compounding this, as described earlier, young Saudis have high

Which countries have expectations of employment, resulting in them being selective in
implemented effective choosing and considering jobs, which usually end up being in the public
sector.
policies and programs
to address youth These are not the only factors contributing to the situation. For example,
unemployment, and what youths in Saudi Arabia have reported that not having the right connections
were they? is one of the main barriers to getting a job. This suggests that the Saudi
labor market still relies relatively heavily on personal networks.
Managing the expectations of the young and promoting their up-skilling are therefore critical
areas for government intervention and support. This can be done in two steps, by first providing
support, such as training and guidance, and then by managing expectations so that the youth
have realistic ambitions once they enter the job market.
Job placement and matching

Saudi GDP has grown at a compounded average of 11 percent over the last ten years. This
means new jobs arise on a continuous basis and employers are continuously seeking new
candidates, both among Saudis and expatriates.
New opportunities on one side and jobless, skilled Saudis on the other side is not enough to
ensure the full optimization of the hiring of a skilled workforce. Between this demand and
supply, there is often one insurmountable issue — imperfect information.

Employers need continuously updated information about what skills are available in the market,
and job seekers need to know who might be interested in their skills. The goal is to find the
perfect match between demand and supply.
National labor markets have historically relied on personal connections and networks, resulting in
an opaque marketplace with a low rate of connection between workers needed and workers hired.
The link between Saudi job seekers and private employers is clearly not functioning effectively.
Future growth in Saudi Arabia’s employment will be buoyed by the private sector. Enabling job
seekers and employers to find a common path through integrated virtual marketplaces will help
increase productivity and national satisfaction, and will be essential for reducing unemployment
across the country.
Female participation and unemployment

Saudi Arabia’s women represent a wealth of untapped potential for the economy. Many of them
have yet to join the labor force, despite being highly educated and motivated.
Among the 6.8 million Saudi women of working age, only 18 percent participate in the labor
force. The participation rate among Saudi men is 65 percent, almost four times that of women.
Addressing this discrepancy will go a long way toward increasing growth and creating a more
inclusive economy.
In addition to low participation, females are challenged by high

Where have women-specific
unemployment rates for those who actually seek employment. Just
under 33 percent of women in the labor force are jobless, a rate almost accelerated job-creation efforts
three times higher than the Saudi average (12 percent), showing that it been successful? In what
is not the preferences of Saudi women driving low female employment industries and occupations?
– many women are looking for work and are unable to find it.
Low participation rates and high unemployment have two main causes. First, there is a
mismatch between the skills obtained by Saudi women and those that are demanded by the
private sector. Secondly, there are significant practical barriers to female employment in the
Saudi economy.
Notwithstanding the low female employment level, Saudi women are highly educated, as
shown in Exhibit 13. But Saudi women tend to focus on skills that are not in high demand by
Exhibit 13: Education of 25+ year-old Saudi women
%
50 CAGR
(1970–2014)
44
40 Primary 4%
40
33
32
30
27 27
23
21 Secondary 6%
20
16 16
13
12
9 10 9
10 8 8 8
5 6
4
3 3 2 3 Tertiary 6%
1 1
0
1970 1975 1980 1985 1990 1995 2000 2005 2010
Year
Females 25+ who completed primary school Females 25+ who completed secondary school Females 25+ who completed tertiary school
Source: CDSI

private sector employers. This, coupled with the attractive aspects of public sector work
(higher investment in infrastructure, more flexible working hours, more woman-friendly
environments) pushes Saudi women to consider almost exclusively public sector employment.
Other barriers to female employment are more practical. Traditionally, many workplaces were
not designed to accommodate women, which discourages them from applying for these roles.
Furthermore, the number of jobs available is restricted to those where direct interaction with
men is not required, and therefore companies must undetake investment for separate spaces in
which women can work, which not all are able to afford. Transportation is also a major issue for
Saudi women, as well as daycare for children when they are at work.

Transforming the
Labor Market
Labor Market Strategy
T he challenges detailed in the previous chapter represent a unique opportunity for Saudi
Arabia to fulfill its great potential.
It is the vision of the Ministry of Labor and its related entities to “shape a healthy labor market
with competitive and fulfilling jobs to support the Kingdom’s future success.” This entails
making the country’s resource-use sustainable and using the labor at its disposal efficiently.
Exhibit 14: Five strategic pillars of KSA’s labor market strategy
Sustainable Skill Labor market Social

job creation development Saudi / Expat efficienc protection
Create productive Develop skills of Manage Provide fundamental Take care of our
jobs in the the Saudi workforce Saudi vs. Expat mechanisms for a people through
private sector balance healthy labor market social protection
In order to fulfill the potential at hand, the Saudi Arabian government and related entities have
formulated a strategy that is centered on five main pillars, as shown in Exhibit 14. The strategy
directly addresses the challenges described previously. This chapter takes a deep dive into the
strategy by describing the components that make up the five pillars, and what they aim to tackle.
Within each pillar, we have identified focus topics to be acted upon as shown in Exhibit 15. In the
upcoming chapters, we will then provide some specific case studies along the dimensions of the
Turkish G20 Presidency’s three I’s: inclusiveness, investment, and implementation.
Exhibit 15: Focus topics of the labor market strategy
Sustainable Skill Labor market Social

job creation development Saudi / Expat efficienc protection
Job creation and Matching

Career education Access to Expats Social insurance
entrepreneurship mechanisms
Private sector Expat vs. Saudi Market support Support for job
Vocational training
productivity cost disparity mechanisms seekers
SME Social dialogue and Support for people

Career readiness Domestic labor
professionalization engagement with special needs
Attractive On-the-job Expat work

workplaces Training conditions
Protection
and legislation
Careers
for women
Employment
flexibility

Currently, more than 140 initiatives have been implemented or are in progress across the
pillars. We have highlighted some these in the Impact and Case Studies section.
Pillar 1: Sustainable job creation — Creating competitive and fulfilling jobs in the private sector
This pillar addresses the issue of the private sector not offering the
How do countries types of jobs that Saudi nationals find attractive. Increasing employment
balance the objectives of opportunities and their attractiveness will go far in tackling youth and
female unemployment in the Kingdom.
the private sector with
the broader national A large number of jobs must be created to accommodate the growing
objectives? labor force. These jobs must be of a standard that can provide job
satisfaction for Saudi nationals. This means we must identify the needs
of different groups of workers, such as women and youths, and make
sure that the workplace into which they enter is responsive to their needs and satisfies their
ambitions.
SMEs, which account for 49 percent of total employment in Saudi Arabia, make up the largest
portion of private sector employers, and are therefore a key target area under this pillar. If SMEs
can professionalize and improve their working conditions, Saudis will become more inclined to
work in this sector.
The important task of attracting women to the workplace can be achieved by reducing the
barriers to employment from the employer side and the barriers perceived by the prospective
employee. On the employer side, women are perceived to be costly to hire as it requires
adapting the workplace and sometimes allowing for maternity leave. On the employee side,
women are aware that some workplaces have not been adapted to their requirements. This,
along with the high costs of travelling to work and paying for daycare for their children, acts as
a barrier.
The government’s responsibility is therefore twofold. It must first ensure that the cost of
employing women is minimized where possible by assisting in making transportation more
accessible, equalizing daycare costs across men and women, and assisting in making workplaces
women-friendly. The second responsibility is to generate awareness among employers and
change the bias against employing women.
Helping Saudi entrepreneurs to start new businesses that will employ Saudis would also help
increase the size of the private sector workforce. This can be done by adapting legislation to
become more pro-business and pro-employment. For example, business-friendly regulatory
environments have been put in place across the new Economic Cities in Saudi Arabia, which are
competitive to other free zones globally.
Relevant case studies in next chapter: Tawafuq, Women in retail, Economic Cities
Pillar 2: Skill development — Develop skills of the Saudi workforce
The purpose of this pillar is to help Saudi youth and women to live up to their potential. It also
seeks to shift Saudi individuals into the high-skilled category in order to decrease reliance on
expatriates in the economy.
Saudi young people must develop the skills and capabilities that are demanded by the private
sector. This can be facilitated by investment by the government, the private sector, and the
young people themselves. The result will be a competitive advantage for Saudi Arabia and a
prospering economy.

Currently, many young Saudis are unaware of the career options available to them and therefore
do not begin at a young age to build the relevant skill set. Because of this, career education is
an important element of this pillar. Saudi Arabia will strive to empower youth by helping them
make educated career decisions. Initiatives are currently being put in place at every stage of
education: primary, secondary, and through to university, to assist them in widening their
horizons and honing their skills for the careers they wish to pursue. Career education can involve
networking with professionals, taking online courses, and practicing interview techniques.
Another area of focus, on-the-job training, aims to promote the up-

How do countries
skilling of the Saudi workforce and facilitate access to the labor market.
It functions as a structured mechanism that smooths the transition encourage their
from school to work. This will be achieved by organizing subsidized populations to up-skill
trainings that will be provided in the service sectors where large numbers themselves?
of expatriates are currently employed.
One further element of the pillar, job readiness, allows the unemployed, or those who are
getting ready to enter the labor market, to take online courses in order to learn practical skills
that can be used in the labor market.
Relevant case studies in the next chapter: Economic Cities, Doroob, Career Education and
Development
Pillar 3: Saudi/expatriate — Manage the Saudi-expatriate balance
This pillar directly seeks to alleviate the overreliance on foreign workers in the private sector.
Expatriates are currently a more attractive proposition for private sector employers due to the
lower costs involved in hiring them and their generally higher skill levels. Both parties, Saudis
and expatriates, must therefore be considered in any policy made to reduce this gap and
incentivize the employment of Saudi nationals.
Saudi Arabia has already implemented a range of initiatives to increase

How have countries
the number of Saudi nationals (Saudization) in the private sector. These
include Nitaqat, which rewards employers based on their relative increased companies’
Saudization level. Companies with high Saudization rates are rewarded desire to hire their own
through access to additional visas, ability to transfer visas from other nationals?
firms, grace periods on certain administrative licenses, additional salary
subsidies, and access to additional government services.
Furthermore, by possessing the skills demanded by the market, Saudis will naturally become a
growing part of the private sector. As mentioned in the previous pillar, training and guidance is
essential to be sure Saudis target their learning and become better equipped to have these jobs,
and this in turn will decrease the reliance on foreign labor.
Saudi Arabia is aware that quotas alone are not enough, and sustainable Saudization needs to
address the underlying wage and working conditions gaps that make it attractive to employ
expatriates.
Relevant case studies in the next chapter: Doroob
Pillar 4: Labor market efficiency — Provide the fundamental mechanisms for a healthy labor
market
This pillar directly aims to match the supply of labor and the demand for jobs in the most
efficient way possible.

Once Saudis have acquired the appropriate skills for private employment, it is crucial to place
them in the jobs that fit these skills. The Saudi Arabian government and related entities are
investing in the tools and platforms to create an efficient mechanism to match employers with
potential workers. This will ensure that market participants find an efficient framework for
employment to happen, resulting in increased growth for Saudi Arabia.
A particular priority is assigning job seekers from the Hafiz (unemployment

How can the supply and assistance) program, especially Saudi youth, to the right channel for
demand of labor be matched finding a job. These channels offer assistance ranging from intense
more efficiently? support such as job placement centers and job schools, to lighter-touch
programs such as an online job-matching engine and employment
portals.
Labor market efficiency and satisfaction can also be increased with dialogue from key
stakeholders. Reaching out to key stakeholders during the policymaking process ensures that
more ideas are generated and more people are involved in shaping the country’s future. Saudi
Arabia has built a framework where the government, workers, and employers can discuss labor
market issues and policies.
Relevant case studies in the next chapter: Ma’an, HRMS for SME’s, Social Dialogue, National
Labor Gateway
Pillar 5: Improving social protection — Guard the well being of our people
The introduction of a program to stop working in extreme heat
This pillar aims to improve all aspects of working life of all members of the population.
It is a fundamental goal of the Ministry of Labor to support those who are looking for work or
have special needs in order to help them become productive members of the workforce. The
Ministry’s programs provide income protection to the unemployed, protect workers against
injury or disability, provide systems for private sector retirement benefits, support Saudis while
they seek employment, and provide extra care to groups with special needs to ensure their
inclusion in the workplace.
Relevant case studies in the next chapter: Tawafuq

Introduction to MoLplus
The Ministry of Labor is the entity in Saudi Arabia that defines and
implements the country’s labor market. It has been enthusiastic in Which countries have
shaping Saudi Arabian economic development by undertaking significant successfully introduced
investment and defining creative policies.
unemployment protection
The main challenges in the Saudi Arabian labor market have been programs while encouraging
identified, investigated, and acted upon by the Ministry of Labor and its employment?
sister agencies which are outlined in Exhibit 16 below. These entities are
responsible for the creation of the five pillars and the implementation of
the corresponding policies, and are collectively known as MoLplus:
Exhibit 16: MoLplus structure
Ministry of Labor (MoL)
• Responsible for labor law, policy

development, labor market regulation,
compliance, inspections, international labor
affairs, communication, and social dialogue.
General Organization for Human Resources Technical & Vocational

Social Insurance (GOSI) Development Fund (HRDF) Training Corporation (TVTC)
• Agency of the state concerned with social • Focused on human capital development in • Provides technical and vocational training
insurance Saudi Arabia for youth, preparatory training, vocational
• Implements social insurance rules, collects • Supporting the efforts to up-skill the preparation, and on-the-job training
contributions from employers and pays national workforce and providing • Falls under the jurisdiction of MoL and
benefits to entitled insured persons employment support and unemployment Ministry of Social Affairs
assistance
• Serving both employees and employers
•• The Ministry of Labor itself, which is responsible for labor law, policy development, labor
market regulation, compliance, inspections, international labor affairs, communication,
and social dialogue.
•• The General Organization for Social Insurance (GOSI) is responsible for social insurance,
which includes private sector pensions, occupational hazard insurance, and unemploy-
ment insurance. GOSI administers the social insurance law, implements social insurance
rules and regulations, collects contributions from employers, and pays benefits to entitled
insured persons and their family members.
•• The Human Resources Development Fund (HRDF) focuses on human capital develop-
ment in the Kingdom of Saudi Arabia, especially in the private sector. It runs numerous
programs that concern up-skilling the workforce, as well as providing grants to those
involved in the training and employment of workers in the private sector. They also run
unemployment assistance programs such as Hafiz.
•• The Technical & Vocational Training Corporation (TVTC) provides technical and
vocational training for youth, including preparatory training, vocational preparation, and
on-the-job training.

Impact and Case
Studies
T he real challenge in transforming the labor market lies in the implementation of the Labor
Market Strategy. The strategy, detailed in the previous chapter, has laid the foundations
for MoLplus to implement more than 140 initiatives within the Kingdom. Each initiative is
specifically designed to act on the target areas within each pillar. In this chapter, we set out
case studies of the initiatives that have been put in place. These case studies will demonstrate
which segment of the population is targeted, what issue the initiative seeks to solve, the
details of the project, and what the impact has been.
This year’s Turkish G20 presidency has outlined three distinct priorities in order
to “ensure inclusive and robust growth through collective action.” In many
ways, these priorities, which are inclusiveness, investment, and implementation,
are similar to Saudi Arabia’s targets and successfully capture the essence of
the Saudi Arabian Labor Market Strategy. These case studies also fit into the
three groups.
Inclusiveness
The G20 understanding of inclusiveness is ensuring that the benefits of growth and prosperity
are shared by all segments of society. This not only means increasing the ranks of the employed
worldwide, but also ensuring that the benefits of high employment rates trickle down to every
member of society.
Within the inclusiveness priority, the G20 countries have highlighted the importance of tackling
the issues particular to SME’s, increasing female participation, and addressing youth
unemployment.
For Saudi Arabia, inclusiveness means involving members of society who have been
underrepresented in the workforce and helping them achieve productive employment. As we
have mentioned throughout this report, this is especially true for women, who have a high
unemployment rate in Saudi Arabia compared with other G20 countries. It also includes the
young, who represent a large portion of the economy, as well as the disabled. The vision of
inclusiveness applies also to the wider public and different regions such as the Northern Border,
where unemployment is above the country average.
Recent years should be celebrated as a time when economic prosperity and advancements in
technology have facilitated the inclusion of different segments of the population. Since 2011,
the female labor participation rate has increased by 22 percent and numerous training programs
have been put in place to better prepare the young for work.
Case study: Ma’an

It is important that different parties work together on different topics and
policies in order to create a harmonious labor market. Creating an online
platform for this allows a wide range of Saudis to weigh in with their
opinions.

Ma’an (“together” in Arabic) is an online initiative that seeks to involve a greater number of
citizens in labor market policymaking.
It comes in the form of a user-friendly and intuitive web portal generated by the Ministry of
Labor that is designed to engage people and business owners in making better strategic
decisions relating to regulation in the labor market.
Policies are put on the platform for a period of two months during which
How have other time citizens can voice their opinions. Ma’an users then rate and
countries used online comment on specific sections of the overall regulation. A committee
engagement tools like then filters the comments and presents the findings to the policy lead.
Finally, users receive a feedback report containing all of the analysis
Ma’an?
undertaken.
Ma’an has four main objectives:
•• To learn from the capabilities of the people in order to implement or provide solutions
•• To involve and engage the public with the policies and decisions that affect them
•• To strengthen transparency and engagement with the public
•• To develop a culture of open government and open dialogue
The portal has been in operation since early 2014, and is already bearing fruit in measurable
ways:
•• 36 draft policies reviews

•• 11 policies passed, 6 policies updated, and 25 policies being revised
•• 228,099 unique visitors to the website
•• 24,472 votes received
•• 7802 comments received
•• 14,405 users participating
Case study: Tawafuq
Tawafuq marketing campaign
Tawafuq (Working Together) is a program that encompasses many projects carried out by the
Ministry of Labor and its sister organizations — the Human Resources Development Fund, the
Technical Vocational Training Cooperation, and the General Office of Social Insurance. It aims

to promote and support the sustainable employment of able-to-work persons with disabilities
in Saudi Arabia. Most importantly, it gives the disabled population an opportunity to participate
in working life and to pursue their personal career goals.
Various projects accomplish this by embracing the importance of people

with disabilities who seek jobs, while also educating their families. The
What effective ways have
projects also inform employers of the procedures for employing people other countries found of
with disabilities and policies surrounding their right to work. It increases involving the vulnerable in
the awareness of policies and legislation to ensure that the rights of the
the labor force?
different stakeholders in the employment relationship are upheld.
A six-pronged approach, outlined in Exhibit 17, was developed by the Tawafuq team at the
Ministry of Labor and the Human Resource Development Fund in order to fulfill their mission.
Exhibit 17: Six projects in the Tawafuq program
Establishment of
Disability and Business
Preparing a certification Reviewing
Employment work card Disability Network
workplaces for system and developing
channels the disabled legislation
(Kudra) (Qaderoon)
(Mowa’ama)
We will take a deeper look at the first project under the Tawafuq umbrella, the Business
Disability Network (Qaderoon), whose slogan is, “Together, we are able.”
Qaderoon network is a not-for-profit network, established in

2014. Its general mission is to provide consultations and advice to
employers regarding retrofitting workplaces to support the
employment of people with disabilities.
Qaderoon membership allows companies to benefit from practical mentoring and guidance,
and learn from the best practices of other businesses on how to facilitate the employment of
disabled people. Presentations are also provided for companies on how they can provide
suitable work environments for people with disabilities.
To date, 14 large companies have joined the network and 45 other companies have applied for
membership. Three programs were held for HR managers on employing people with disabilities,
giving awareness training to over 80 individuals; and six educational training programs were
held on preparing the work environment for the disabled. Through their membership in
Qaderoon, seven companies were able to increase the number of employees with disabilities
and they consequently worked on adjustments to the workplace.
For further information and inquiries on the Tawafuq program projects, please contact the
general supervisor of the program Dr. Mervat Tashkandi at mtashkandi@mol.gov.sa

Case study: Social Dialogue
A citizen voicing his opinions on proposed initiatives
Policies in a system as connected as the labor market should be cooperatively designed, with
the impacts on every party being weighed. Social Dialogue is the exchange of visions among
the three most important and responsible groups that are affected by work issues and labor
affairs.
The stage has been set for these three groups, known as “the tripartite,” to exchange
information and reconcile differences and create a balance among the interests of three
stakeholders in the labor market, namely employers, workers, and the government. The social
dialogue among the partners aims to drive economic growth and fight unemployment while
analyzing social disputes and looking after the wider social aspects of employment, such as the
minimum wage.
The King Abdul Aziz Center for National Dialogue is the platform
Where have policies been
underlying the discussions. The themes differ from meeting to meeting
successful in creating and are chosen from a survey of the Saudi Arabian public. Members from
dialogue between different the Ministry of Labor represent the government, while the workers are
groups of society? represented by the National Committee for Labor Unions. Employers are
hand picked from some of Saudi Arabia’s most successful businesses.
Each of the forum themes is discussed, with each party allotted a certain amount of time to
discuss, express opinions, and contribute suggestions concerning the theme. In-depth studies
and success stories from Saudi Arabia ensure each theme is analyzed in a scientific and neutral
way.
A recent Social Dialogue forum concerned ‘inspection policies and regulations’ — which ensures
that businesses comply with labor market regulations. Presentations on topics such as ‘self-
assessment and audit’ and ‘work inspection from an international perspective’ were given to all
parties, and discussions centered around the policies themselves and alternative solutions to
what was already in place. Since this forum, the inspection process has been reviewed and
optimized to become more professional. For example, inspectors now show their ID’s when
inspecting to show they are representing MoL, putting the businesses more at ease.

Case study: Women in Retail
Government official carrying out a workplace inspection
Although it has been slowly increasing in recent years, the rate of women in the workforce in
Saudi Arabia has historically been low in comparison with that of men. Upon entering the labor
market, women have traditionally chosen to work in education. The retail industry, on the other
hand, has generally remained closed to women because such work usually requires interaction
with men. However, thanks to the ‘Women in Retail’ initiative undertaken by the Ministry of
Labor, the role of women is expanding and evolving.
Women in Retail specifically aims to not only increase the number of

How does intelligent
employed women, but also to diversify the sectors in which women
work. This initiative fits into a broader series of initiatives that have policymaking support
helped Saudi Arabia boost the employment of women over the past few equal treatment of men
years, especially in the private sector where female employment growth and women?
is significantly outpacing male employment growth. Added to this,
economic policymakers have recognized that if women are going to be
educated at public expense, as they now are in increasing numbers, they will expect to work,
and the country will need their economic output.
The Women in Retail program was implemented in 2012 as the Ministry of Labor enforced a
Royal Decree ordering that sales personnel in shops selling garments and other goods such as
cosmetics, which are only for women, must be female. After being issued first for lingerie
shops, the decree was extended in a second phase to female dress, abayas, and accessory
shops. Moreover, the Ministry began intensive inspections in 2013 in order to check the
implementation status of the policy.
In March 2014, the implementation of the third phase of the feminization of shops started,
extending the decree also to more shops selling women’s items – including perfume, jalabiyas,
bags, shoes, socks, all other types of women’s clothes, and fabrics for women’s clothes, as well as
shops selling maternity products and pharmacies in malls selling beauty products and accessories.
These initiatives, along with the others implemented so far, helped raise female employment in
private sector jobs from 55,000 Saudi women in 2010 to 450,000 in 2014, approximately a

seven-fold increase. Female employment has now branched out from the health and education
sectors.
Investment
In recent years, one of the global economy’s biggest shortcomings has been a lack of investment,
which is fundamental in driving sustainable growth and helping the global economy recover to
pre-crisis levels. It is for this reason that the G20 have stressed that the lack of global
investment is being addressed via the use of carefully formulated strategies and have made this
a priority.
Throughout the tough global economic climate, Saudi Arabia has led the way internationally by
investing in many large-scale initiatives that have transformed cities and the working lives of
their residents. More specifically, MoLplus, has invested significant capabilities in strategy
development, performance management, program management, and talent development.
Case Study: SMEs
Official launch of an SME initiative
SMEs are not a popular employment choice among skilled Saudi Arabians, but they have the
potential to contribute significantly to job creation for Saudi nationals and to advance the
Saudi economy in its drive for diversification and expansion.
The Ministry of Labor has developed SME support measures under a

How has strengthening the
framework covering four distinct areas: business environment, business
link between nationalization professionalization, SME training and capabilities, and funding and
and SME professionalization financing. One specific initiative is HRMS (Human Resources
been successful? Management Systems ) for SMEs, which is part of the business
professionalization topic.
HMRS is a software application that combines many human resources functions, including
performance analysis training and payroll. Under this measure, this service will be made
available to SMEs at a low cost. HRMS assists in the SME professionalization process by

decreasing the cost of managing administrative HR tasks for small businesses by creating a
more efficient process. This allows SMEs to focus on other tasks and potentially manage more
people.
The program is currently in a pilot phase to gauge the viability of a countrywide rollout.
Case Study: Economic Cities (King Abdulla Economic City)

The OECD forecasts that in 2020, $150 billion of new economic
activity will occur in Saudi Arabia. That is a substantial increase in
GDP, and it will be thanks to the new six Economic Cities located
around Saudi Arabia (shown in Exhibit 18).
On the Red Sea, where East meets

Exhibit 18: The location of the six Economic
West, the largest Economic City is Cities
emerging. King Abdulla Economic
City is a megaproject undertaken
by the government with the aim of
creating a ‘city of the future’, which
will become a sought-after place to TEC
PABMEC Eastern
live and work for many Saudis and Province
other talented individuals.

Madinah
The city will provide many high-

quality new jobs in Saudi Arabia and KAEC
help the economy diversify away

from its reliance on natural
resources. The city is due to be JEC
completed in 2020 with a projected

investment of $56 billion, and is Under development Planned
expected to create 1 million jobs for

Source: OECD
Saudi youths.
Less than an hour by rail from three large cities in Saudi Arabia — Jeddah, Medina, and Makkah,
the new city is strategically placed in the Makkah region, which currently has an unemployment
rate of 10 percent.
There are four main locations for the KAEC project:
•• King Abdullah Port, based on the Red Sea, where 24 percent of global trade takes place
•• Industrial Valley, where over 80 global, regional, and local manufacturing and logistical
companies are based
•• Coastal communities, where there are seven residential communities offering high quality
housing
•• Hijaz Downtown, where 8.5 million people are connected through high-speed rail
Many programs operated in KAEC, which are supported by the Ministry of Labor, are already
developing the skills of the workforce. The Tomouh (Ambition) program is one of these that
aims to bridge the gap between the skills that young Saudis gain at university and the actual
needs of the labor market.
The program was launched in 2012 and provides services such as computer training and English
language courses to Saudi students, both male and female, and helps them compete for jobs at
some of the most internationally recognized companies operating in KAEC. Since 2012, 700
Saudi students have benefitted from these training courses.

Exhibit 19: Bird’s-eye view of King Abdallah Economic City
Source: WAGT, deigners of KAEC
In July 2015, KAEC expanded this program by signing a contract with King Abdulaziz University
to train 1,000 male and female students from Rabigh and nearby towns. The training is six
hours a week over four months.
Case study: Investing in previously existing technical colleges
The Minister of Labor giving guidance for vocational training programs
Investment in Human Capital has been highlighted as a key focus area in 2015 by the Turkish
Presidency. While many young people in Saudi Arabia are still in school, it is important to build

upon this, and invest further to ensure they are given the required skills for the jobs they wish
to pursue.
Under the MoLplus umbrella, the Technical & Vocational Training

Corporation (TVTC) is the key facilitator of occupation-specific skill Which countries have been
development in Saudi Arabia. It provides technical and vocational successful in establishing
training for the young, preparatory training, and on-the-job training.
vocational training as an
TVTC has three main objectives: inspiring and fulfilling
career? How?
•• Increase capacity to suit the demands of the job market
•• Improve the quality of the teachers and curriculum
•• Learn from and adopt the best international practices of technical and vocational training
Many initiatives to up-skill Saudi youth have been put in place by TVTC. We will focus on their
program to invest in previously existing technical colleges.
Alongside Saudi Skills Standards (an entity responsible for ensuring that teaching standards in
Saudi Arabia are met), and the colleges themselves, TVTC has identified and invested heavily in
technical colleges that have not been running to their maximum capabilities.
This capabilities-building project takes aim at three key areas within each college:
•• Developing the capabilities of teachers

•• Developing administrative operations
•• Developing training curricula for the colleges
This project has already been launched and will continue in a number of phases in the future.
Currently, the first phase of the project is underway. Ten colleges around Saudi Arabia have
been selected to undergo large-scale investment. The teaching methods, operations, and
curricula of these selected colleges will be transformed and the expectation is that each
college will attract thousands of young Saudi nationals, who will be up-skilled and readied to
enter the world of work.
Once the investment has been made in each college, TVTC will act as a supervisor of the
colleges, and the colleges will operate independently in a system much like the already
successful College of Excellence system in Saudi Arabia.
Implementation
A key element of this year’s G20 meeting will be analyzing whether countries have implemented
what was outlined in the Brisbane Action Plan. The Brisbane Action Plan outlined the individual
and collective actions that should be taken in pursuit of strong, sustainable, and balanced growth.
Against the backdrop of a tough financial climate, the emphasis for the G20 countries last year
was on creating quality jobs and more employment opportunities. Saudi Arabia was asked to
report back on progress in reducing youth unemployment, reducing gaps in labor force
participation, and the further development and implementation of our country’s employment
plans. Throughout this report, we have documented our progress on these topics.
In order for the Saudi Arabian lessons to be of value outside of the country, it is important to
detail and show examples of how these policies were implemented in Saudi Arabia and which
enablers were key in implementing them. We will focus on technology and PPP (private-public
partnerships).

Technology
Case study: Doroob experience
Online education increases the opportunities available to those in
Saudi Arabia for whom traditional education presents challenges.
Doroob, meaning roads in Arabic, is designed to provide students
with an ecosystem of content, support, and certification, and pave the way to upgrading their
skills and becoming more employable.
Doroob makes use of MOOC’s (massive open online courses) to provide easy-to-use and easy-
to-follow learning programs on the internet. Its main objective is to assist employers,
employees, and job seekers in meeting the demands of the Saudi labor market. This helps to
alleviate youth and female unemployment as well as up-skill all Saudi nationals.
The Doroob program is supported by the Ministry of Labor and sponsored

How have countries by HRDF, and is built on three key services: on-the-job training (OJT),
used MOOCs to up-skill training courses, and certification.
youth?
Up-skilling the Saudi workforce is key to enabling employers in Saudi
Arabia to meet their recruitment needs. On-the-job training provides
employers with the a framework, guidance, and support in developing a structured training program
in the workplace to train employees and further cultivate the talent pool in the Saudi labor market.
The Doroob platform offers a wide selection of online training courses conveniently accessible
to interested students anytime and anywhere, which also corresponds to the demands of the
labor market. To improve the users’ basic skills, the courses include interpersonal training,
English language, and computer skills. Job-specific training courses such as for retail sales
assistants, hotel front-desk clerks, and IT support assistants are available as well.
Finally, Doroob issues official certification that is recognized countrywide. Companies in the
Saudi labor market often face difficulties in properly assessing the educational and professional
background of both employees and candidates. This inefficiency can be expensive and HR
departments are often asked to find alternative ways of ensuring that employees or job seekers
are well armed with the relevant skills.
Case study: National Labor Gateway

With so many programs and so much information for prospective
job seekers, locating the appropriate program from among these
vast resources becomes an issue. Aiming to solve this issue and eliminate the inefficiencies
that exist in matching workers with employers, The National Labor Gateway is the new one-
stop shop for all programs and job opportunities in Saudi Arabia.
The introduction of NLG is expected to bring immense benefits to the Saudi labor market. A
more transparent job marketplace will benefit both job seekers and employers, matching job
requirements with employee skills, and providing a wider choice to both parties. The net
expected effect is better matching and optimization of the hiring process, and, as a result,
higher retention through career development plans and through better job fit.
NLG compiles vast amounts of labor market data (shown in Exhibit 20) and will bring
employment, career, and financial support under one roof. Anybody, whether eligible for
financial support or not, will be able to register and create a profile to immediately benefit from
employment support. It will be continuously updated and will support individuals throughout
their lives, from school to retirement.
NLG will be implemented in three phases. In terms of benefits for job seekers, in the first phase

NLG will represent a one-stop shop
for all career or labor-related needs, Exhibit 20: NLG labor market data
such as publishing job vacancies,
The National Labor Gateway will contain
providing referrals to tailored career the following information:
advice and support, providing

financial support, procuring Job seeker Employment Eligibility
&
profiles history evidence
unemployment insurance.
In the second phase, the focus will Students

Financial
benefits
Service
providers Fraud
profiles records records
information
be on providing tailored lifetime
career support. NLG will be the
place to find the best advice about Employer Job vacancies/
interview Training
profiles records
results
which courses to take, which
diploma to obtain, which internship
to pursue, and which company and Matching/
referral
Training Individuals Career
catalog survey results preferences
statistics
position to apply for. It will also
provide retirement benefits
counseling.
In the third and final phase, NLG will become a nationwide platform
supported by the top employers in KSA and backed by government How can technology be
entities providing accurate data, creating an unprecedented number of
diverse training offerings.
leveraged further to create
an efficient job market?
To aid employers, in the first phase NLG will provide faster and more
efficient talent searches by creating a single place to find all the job
seekers in the country whose information has been verified, with an embedded matching-
engine to find the right talent faster.
In its second phase, NLG will support employers in retaining their employees, by providing better
information about what employees seek and what competitors offer, and by helping employers
put in place advanced career management systems to help keep employees from leaving.
Finally, in the third and last phase, NLG will provide employers with advanced and tailored
support, offering a wide catalog of programs to employers tailored by NLG agents to employers’
specific needs, to help them make the most of the programs offered.
Case study: Career Education and Development

As the years progress, many more youths will be entering the workforce in Saudi Arabia. It is
imperative that they, along with all other segments of the population, make their career
choices based on sound and complete rationales. This was the motivation behind developing
the Career Education and Development (CED) program which is sponsored by HRDF.
The CED program aims to empower all Saudis to make better learning
and work choices by creating a harmonious career development Where has career education
ecosystem delivered by accredited professionals, supported by emerging been implemented
technology, and based on shared public-private sector responsibility, all
successfully worldwide?
underpinned by a robust governing body.
The high-level objective of the CED program is to change the mindset and behavior of Saudi
nationals over time by doing the following:
•• Empower Saudis to equally consider all sectors of the job market (not just the public
sector)

A Career Education and Development workshop
•• Instill the value of a productive, lifelong career

•• Encourage the principle that all jobs are valued
•• Engender realistic expectations about entry-level jobs
•• Enable Saudis to plan their careers according to personal aspirations and market needs
The CED program is split into two

Exhibit 21: Number of program beneficiaries
across different segments distinct parts — the fast track and
the strategy track. The fast track
University
brings together initiatives that can
Secondary
education and vocational
training
Job seekers Employees
give immediate and tangible results
on the ground. It can also serve as a
# of program
beneficiaries
~15 K ~21 K ~18 K ~1 K learning device for future initiatives.
The strategy track aims to develop
activities for job seekers from a
young age and as they progress well into their careers. While the strategy track is still being
implemented, the fast track has already blossomed, with over 55 thousand beneficiaries over
four segments.
Today, the fast track program is being run with eight national career education and development
providers (shown in Exhibit 22), putting the program on track to accomplish the following
targets by the time the program ends in late 2015:
•• 21,000 visitors to career exhibitions

•• 230 trainers trained to conduct career education activities
•• 5,000 app downloads
Within the strategy track, different segments have been targeted with tailored programs and
activities. These segments are primary schools students, secondary school students, those in
tertiary education, and adults who are changing jobs or are unemployed.
Within each segment, activities, tools, and programs have been divided into three main parts:
Things to do at home, things to do at school/university, and things to do in your free time.
Exhibit 23 is an example of the learning journey that is planned for secondary school students.

Exhibit 22: Fast Track Programs
Rawabi Mentors Glowork Warif/Prince

Holding KSA Alanood
CSR branch of Rawabi Connecting successful KSA Recruitment and support Private Saudi foundation
Holding (retail, industrial professionals to youth dedicated to the enabling youth development
goods, etc.) employment of women
Ithraa
Al Nahda Lumink Etree Group
NPO dedicated to Media company dedicated Technology/media company Foundation dedicated to

empowering women to produce animated videos creating mobile applications youth studies, online
socially and economically content, and events
CSR organizations NPOs Commercial Companies
Exhibit 23: Secondary school students CED journey
Home • CED online portal:

– Massive open online courses
– Career stars videos
• Career information, including:
– Key infographics
– Psychometric tests
– Professional tweets
CED student
journey
School Free time
• Guest lectures • Summer career camps

• Field visits • Career exhibition
• Career days • Career road shows
• Workshops (for students and influencers) • Mini-jobs
• Individual Guidance
• Employability skills courses

Future and Outlook
T his is just the beginning for Saudi Arabia and the implementation of its labor market
strategy. The Ministry of Labor and its related entities have made significant investments
in matching demand and supply to the appropriate measures and the impact of these efforts
will be felt more and more strongly as programs are rolled out, expanded, and fine-tuned. In the
future, when the goals of the labor policies are achieved, we will be able to trace them back to
the five pillars and what actions were undertaken under the auspices of each one.
Looking to the future, Saudi Arabia envisages a country where young

people are proficient in choosing their career paths and obtaining the What more would you
relevant skills to acquire competitive and fulfilling private sector jobs. like to know about Saudi
Our aim is to be a country where women participate in the workforce at Arabia’s labor market
a much higher rate and the unemployment rate for women is lower, due
to legislation that supports women in the workplace and more overall
efforts?
encouragement for them to enter the workforce, including the education
to help them focus on which skills to acquire.
With new policies that cause a shift in the skill level and mindset of Saudi nationals, we are
committed to doing our utmost to decrease the unemployment of Saudis and reliance on
imported labor. We are also confident that, with the programs in place, the private sector will
create more competitive and fulfilling jobs and can be an attractive proposition for Saudis.
Initiatives are already being implemented so that operational health and safety should no
longer be an area of concern, thanks to the improvement in working conditions and workplaces
catering to the needs of the vulnerable segments of society.
The success of MoLplus’s policies, of course, is contingent on their implementation. None of

this will happen without sustained and concerted effort from the private sector, the Ministry
of Labor and its subsidiaries and sister organizations, many other government entities, and the
workers themselves. There is still much to do in the short term as many measures will only take
full effect in the medium or long term.
We are confident that with sufficient engagement, continued energy, and resolute focus, we
can realize our goals of ensuring employment opportunities for Saudi labor and realizing
competitive advantages for the national economy. We relish the journey we are on and look
forward to continued interaction, consultation, and collaboration with fellow G20 nations and
international organizations.


Saudi Arabia Labor Market Report G20

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Saudi Arabia Labor Market

His Royal Highness

His Royal Highness

5 THE MINISTER’S MESSAGE

1 1 WELCOME TO SAUDI ARABIA

1 5 THE LABOR MARKET – WHERE WE STAND

1 9 LABOR MARKET CHALLENGES

2 7 TRANSFORMING THE LABOR MARKET

3 3 IMPACT AND CASE STUDIES

4 7 FUTURE AND OUTLOOK

4 | Saudi Arabia Labor Market Report for G20

Employment is one of the highest priorities for governments throughout developing,

Dr. Muffarij Al-Haqbani, Minister of Labor, Kingdom of Saudi Arabia

Ministry of Labor, Kingdom of Saudi Arabia | 5

•• Creating competitive and fulfilling jobs in the private sector

Ministry of Labor, Kingdom of Saudi Arabia | 7

8 | Saudi Arabia Labor Market Report for G20

Demographics and economics of Saudi Arabia

2000, as shown by Exhibit 1. It is 40,000,000

Ministry of Labor, Kingdom of Saudi Arabia | 11

Saudi Arabia recognizes the

private sector is increasingly

GDP growth by sector, 2000–2014

US $, current prices CAGR

665 16% 17% 9%

13% 34% 38%

Oil Sector Private sector Gov’t sector

12 | Saudi Arabia Labor Market Report for G20

Exhibit 4: The Saudi labor market at a glance

Total Population : 30.7 million

31% (9.6 million)

Ministry of Labor, Kingdom of Saudi Arabia | 15

Exhibit 5: Unemployment rate for Saudis by region (2014)

Hafizians in the region

11 3 Average: 15% 9 Average: 9%

6 Average: 9% 12 Average: 13%

Both genders above average composition

16 | Saudi Arabia Labor Market Report for G20

support service activities

Real estate activities

Electricity, gas, steam, and

air conditioning supply

Other service activities

And technical activities

food service activities

& technical activities

Ministry of Labor, Kingdom of Saudi Arabia | 17

Overcoming these challenges represents a huge opportunity for Saudi

Saudi nationals find public sector

employers. Small and medium-

Ministry of Labor, Kingdom of Saudi Arabia | 19

Exhibit 9: Majority of Saudis work in public sector

Weekly working hours

Human health and

Inf ormation and communication

Private Public Domestic Relative sector size

The importance of family and community role models is also a factor in

20 | Saudi Arabia Labor Market Report for G20

Saudi/expatriate employment divide

Expatriates come to Saudi Arabia to benefit from its economic growth

Exhibit 10: Benchmark of unemployment rates, G20 countries (2014)

Within the workforce, Saudis and

outnumber expatriates only in 80

medium-skill jobs. For low-skill 60