Sunday, 21 April 2013


I've had this article on Saudization in my Draft Box for ages and have played around with it quite a bit because the current scheme for employment of nationals is an ongoing saga with updates required often.  But I've had enough of this post in my draft box so, here it is....

I love the way the Saudi hierarchy sees something needs doing and just does it.
A road needs building, we'll build it.
We need schools and hospitals - let's build them.
We need employment - we present Saudization.
Yes I love how decisive the heirarchy is.
No discussion. 
Just do it!
I wonder if all the hierarchy in KSA wear Nike?

Saudization.  The Kingdom's strategy for increasing employment for locals.  Officially it's called Nitiqat though my preference is the 'Traffic Light System'.

It's been chugging along lately.  While reading articles about Nitiqat today I recalled the stress that it's impending implementation caused a number of expats.  Mostly those with jobs that Saudi's have absolutely no interest in doing.  Which means anything that doesn't come with 'Manager' status.  Status and title tends to mean a lot to Saudi's, more particularly the men.

For those unfamiliar with Saudization here's a brief overview:
To deal with Saudi unemployment the government decided that all except the smallest companies must have a certain percentage of Saudi on the payroll.  The bigger your company the more Saudi you should have.  Each company will fall into a colour category based on whether or not this percentage is met. 
The category your company is in affects your ability to issue visa's for importing new expat workers.
  • Blue - you're special and can do what you want;
  • Green - you meet the percentage and get some visa concessions - go ahead and hire some more expats;
  • Yellow - you do not meet the percentage and cannot issue new visa's to get expats. However, you only have to turf a few expats and replace them with Saudi's to re-colour yourself;
  • Red - you definitely do not meet the percentage and have a real problem on your hands. Replace most of your staff with locals and, until you do, you can only dream of issuing visa's for more expats.
Being able to sponsor expat workers is important for a number of reasons but the main one is, they work.  Companies often baulk at hiring Saudi's because the current local interpretation of the term 'work' and every body else's understanding of the word is vastly different. ( I'm fairly certain this is the fall out from recent oil wealth because making a living out of the desert in days gone by would not have been, and still isn't, easy).

Nitiqat is giving everybody a wake up call.
The youth of Saudi are wanting jobs.
Nitiqat is, apparently, giving them jobs.
Finding out they actually have to work at those jobs is a bit of shock! (for the job hunters).
Figuring out how to make them good at the jobs is causing a few headaches. (for the job providers).

Announcements from Big Wigs that most jobs done by expats aren't suitable for Saudi's because they are 'too menial' only serves to keep a number of Saudi's picky about the jobs they will do.  But get a job they must.  And a real job, too.  Not a fake one.

When Nitiqat first came out, stories abounded of the way company's were getting around the rules.

I understand the most common strategy was for owners to have the names of friends and family on their employee list, although they didn't have to turn up to work at all, unless a Ministry type threatened to visit.  Then it was all hands on deck, looking busy.  The government is not taking kindly to companies who try to continue that little ruse.

Another, quite entrepreneurial, strategy was Saudi's getting paid a little pocket money by putting their name on the employee list of lots of companies.  The governments new rule, that companies must pay GOSI (General Organisation for Social Insurance) for their employees, has served to nip that scheme in the bud.

About the same time as Nitiqat came along, Hafiz was also introduced.  Hafiz is a dole system with rules.  You're only on it for a year.  In that year you'll be offered work that you are expected to take or you'll lose your cushy income.  There was a rush to sign up for, and cash in on, Hafiz - I know more than a few ladies who were at the front of the crowd.  Now they aren't so happy.  They didn't think the party would end!

Saudi Arabia should be moving ahead due to Saudi effort but, like repairing a broken wall in an old house, when you start fixing one area of rot, you discover another mess that needs attention, and Nitiqat keeps uncovering issues.

Now that the government is pushing for Saudi's to be employed, those same Saudi's have decided they want to be paid more and it is safe to say that the Saudi pay packet, generally speaking, is fairly crap.   The Ministry has come up with a plan to find the money for increased salaries - Penalise workplaces for the expats they have on their books then, use the money from those penalties to increase the Saudi salary.

Some economists said that the fall out from this scheme would be inflation, though others think expats would be forced to pay the extra cost which, I think, is more likely.

Expat levy to add SR60bn economic burden on Saudis

The latest in the Saudization Saga, The Passport Raids, we heard about when we arrived back in Riyadh a few days ago.  Apparently the streets of Saudi's largest cities were very quiet for two weeks as companies rang their workers and told them not to come in.

The Passport Raids was Saudi trying to rid itself of illegal workers, presumably to open up the job market for nationals.  I was told the basic premise for being an illegal worker in these raids was 'you are not working for your sponsor' or 'your iqama does not match your job title'.

Given that many a Shady Saudi over the years has been cashing in on the sponsorship system by offering 'free visa's', there are hundreds of thousands of 'illegal' workers in Saudi.

Here is how 'free visa' works, according to a very chatty taxi driver I know.  A Saudi bloke goes to the government with papers stating he has a company that needs 300 workers.  The government office then issues him with 300 visa's.  The Saudi goes to an agent and says find me 100 workers (for the real business), and here's 200 visa's that you can sell off at, let's say, 10,000SAR a piece, making Mr Saudi a tidy profit.

The reason they are called Free Visa's is because the worker who buys one is "free" to work for other employers. And, though the Saudi remains the sponsor and keeps the workers passport, he declares himself "free" from the obligations of sponsorship (because sponsorship done right does have rules and obligations) and the worker is generally left to fend for himself.  I'm not sure, but I understand that Free Visa Sponsorship was never actually legal, it was more that a blind eye was turned.  That is, till now.

One can only presume that Free Visa Sponsors are being dealt with during these raids as well as Free Visa Purchasers, though knowing Saudi as I do, I doubt it.

There are also thousands of workers on Iqama's that do not equate to the job they do.  In days gone by, when a legit company wanted Iqama's for their workers they stated the kind of work the company did and asked for Iqama's to suit the employees roles.  The Iqama Office however, for whatever reason, didn't send Iqama's to suit everybody.  So secretaries are Iqama Mechanics, accountants are Iqama Engineers etc.  (Last year there was a crack down on engineers because it was discovered that loads of engineers were, in fact, not engineers.  Rumour has it that the Iqama office (or somebody closely related) kept receiving a lot of Engineer Iqamas and needed to get rid of them, so companies were told take them or get nothing).

One must now presume that the Visa/Iqama  process has become more stringent in light of Saudization.

We were away in NZ (our son got married) and missed the excitement of the raids which also closed International Schools  because a large percentage of the teachers are wives of expats.  The Iqama of an expat wife has 'Must Not Work' stamped across it.  Mine does.  When we asked a friendly Saudi about my current work status (because I was contemplating finding more work), he said not to worry, only Indians, Pakistani's and such like were on the hit list.

It crossed my mind, when I heard about the International School closures, that stopping expat wives from working as teachers in International Schools was a bit ridiculous from a Saudization point of view.  I mean, how many Saudi's would really be happy replacing the wives to teach Indian, Pakistani and such like children.   Although newspaper articles often sing the praises of new agreements signed between countries and important men pose for lovely smiley photographs, on the ground in Saudi, racism is rife.

The following articles give another spin on the Passport Raids and Saudization  "Reduce Our Dependence on Expatriates But Don't Scare Them.

And that, in a nutshell, is my overview of how Saudization has been trucking to date.  You can't really say life is ever dull in the Land of Sand.  They are always up to something.

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