Saudization is an essential part of managing your business in Saudi Arabia and to remain compliant, it needs to be successfully implemented into your business.
The Saudi government have provided incentives and subsidies for companies who are compliant in Saudization through the Human Resources Development Fund (HRDF). They also introduced Taqat; the online job searching portal, to make it easier for private employers to implement Saudization.
Taqat helps connect private employers with qualified Saudi nationals, to help companies reach their Saudization compliance level. Nitaqat requires all private sector businesses to post new job openings on the Taqat portal first, and consider all applicants who are suitable for the position.
What is Saudization?
Saudization is the Saudi nationalization scheme to increase the employment of Saudi nationals in the private sector. Saudization aims to give Saudi nationals a fair opportunity in the private market and reduce the reliance on foreign workers.
The newest form of Saudization, Nitaqat, requires employers to reach compliance through a colour zoning system. Compliant zones are platinum and green (low, medium and high), and non-compliant zones are yellow and red. This system allows companies to monitor their compliance and is based on factors such as the business’ industry and the size of the company.
Strategies to achieve Saudization successfully:
- Make Saudization compliance a business objective
By making Nitaqat a core business objective, it ensures that the required steps are taken by all employees throughout the business. Focusing business operations on achieving this objective makes it a priority and is therefore more likely to be accomplished. This then leads businesses to make a plan as to how they will accomplish this objective.
- Plan for Saudization
Planning for Saudization will allow companies to determine what resources are needed to achieve Saudization goals effectively, and will require HR to create a hiring strategy. Companies will need to consider whether they will hire more nationals to reach the quota, or replace foreign employees with nationals once their visas expire.
- Implement into HR processes
Companies need to implement Nitaqat into recruitment processes to ensure that they are remaining compliant in the long term. The first legally required step for private sector companies hiring in Saudi is to post the job opening on Taqat, however, this should be integrated into all recruitment processes to ensure compliance in the future.
Human resource departments can implement Saudization into their processes by forecasting employee numbers and company requirements. This allows them to determine what positions are required for the company and how to go about finding the required candidates, whilst reaching quotas.
The implementation stage of Saudization will require ongoing evaluation, to ensure that the company remains within the compliant zones.
For businesses operating in Saudi, compliance is a key to success. Not only are there benefits and incentives for being compliant, but compliance also helps businesses operate more effectively.