Saudisation jumps 34% in construction sector: Bank
Riyadh-based Jadwa Investments says employment rate for Saudis outstripped foreign recruitment in 2014
Saudisation compliance in the construction industry is on the rise, with a 34% jump in the number of nationals employed in the sector.
In its The Saudi Economy in 2015 report, published this week, Riyadh-based investment bank Jadwa Investments stated that the Kingdom’s construction sector remained exceptionally healthy with $1.2 trillion in projects currently planned or under development.
Nitaqat, or Saudisation, was introduced in 2011 to help drive up the percentage of Saudi nationals employed in the private sector, and Jadwa Investments says the effects are being seen across the board.
The report states: “According to data from the Ministry of Labour, the Saudisation rate in the private sector increased from 10.9% to 15.2% between 2011 and 2013.” Saudi growth in the private sector, the report states, is around 26 percent – outstripping the growth of foreigners employed (9.4%) considerably.
But the construction industry – the most labour intensive part of the private sector – has seen even better results under the Nitaqat system, with a 34% jump in the number of Saudis employed. Saudi workers now represent 10.3% of the construction workforce which is still some way off the 12% the government is targeting, and considerably short of the more ambitious targets set under phase three of the programme, due to be implemented in April 2015.
“The higher growth in Saudi employment in the construction sector is impressive given the particularly high wage differential from non-Saudis. Saudis in the construction sector earned a monthly average of SAR3330 [USD887] in 2013, while non-Saudis earned only SAR1029 [USD274],” the report stated.
“Looking ahead, we see that while employment growth of nationals in labour intensive sectors is expected to continue improving as companies in these sectors adjust to new norms, further raising the Saudisation rate in high-skilled sectors - mainly manufacturing – remains a challenge.
“We believe that one of the main impediments to higher growth of Saudi employment in these sectors is the lack of skill-matching between educational achievements and these sector’s requirements; a challenge that we believe is being matched through ongoing initiatives that include significant investments in the education sector particularly on vocational training as well as the ongoing King Abdullah foreign scholarship program.”