Over the past year, Saudi Arabia has gone through a series of transformative changes, ranging from significant employment reforms to opening up exciting opportunities in the tourism sector. These will be reflected in the strategic efforts that will empower its citizens in the workforce and at the same time attract contributions from global investors that will boost the growth of the nation. So how does Vision 2030 align with the Saudisation initiative?

Key takeaways

Here are some important things to understand when talking about  Saudisation and Vision 2030:

1. Where are we today?
2. The current framework
3. Changes in 2021
4. The future and Vision 2030

1. Where are we today?

Over the last couple of decades, the Saudisation initiative in Saudi Arabia, particularly under the Nitaqat framework, has been essential in reshaping the labour force of the nation. The Nitaqat framework refers to a system of classification and evaluation used by companies in Saudi Arabia for their hiring operations. Several adjustments have been made during this period to boost the employment of Saudi citizens as part of the future of work in MENA.

A crucial question is raised by all of these revolutionary developments, though: How does Saudisation affect businesses’ capacity to interact with immigrants? And where does that leave us today? It is vital to examine this relationship as it makes us aware of Saudi Arabia’s continuous progress towards Vision 2030.

2. The current framework

The Nitaqat framework uses a color-coded method to differentiate across Saudi companies. It goes from red (non-compliant) to platinum (highest). 

• Companies with a platinum rating are eligible for certain immigration-related benefits, such as expedited processing and quota preferences.
• Conversely, businesses that fall below the ideal ratings i.e. red rating are not allowed to employ any foreign nationals in an aim to encourage them to lift their rating for eligibility of the platinum-rated benefits.
• Nitaqat’s core aim is to incentivize companies to enhance the representation of Saudi nationals in the private sector.
•  In 2017, strict measures increased Saudisation rates across industries.
• Recently, changes were made, like removing the yellow category for clearer groupings.
• Green categories (high and medium) can now request block visa quotas, and the block visa validity is back to two years.

Furthermore, recruitment in MENA is different from the rest of the world. So, Saudisation calculations now consider salaries paid to Saudi nationals, with slight uplifts to minimum salary payments. Instant calculation for Saudi employees reflects a more streamlined process, counting from day one rather than the previous 26 weeks.

A significant breakthrough is the 2019 introduction of the Tourism Visa, offering free visas on arrival for 49 nationalities. 

• Despite temporary tourism setbacks due to COVID-19, Saudi Arabia’s hosting of pre-pandemic major events and discussions about future global events align with Vision 2030 and the Red Sea project’s tourism focus.
• This strategic move to open up to international travel aims to boost growth opportunities, capturing the interest of investors and potential emigrants.
• The Kingdom’s dedication to reshaping immigration aligns well with its vision for a diversified and thriving future.

3. Changes in 2021

In 2021, significant changes in Saudi Arabia’s immigration landscape further shaped the Vision 2030 initiative.

• Saudisation extended to the accounting and IT & communication sectors.
• In these industries, certain job titles required between 25% and 30% local availability.
• Strict policies, like minimum wage requirements for Saudis in authorized professions, demonstrated the Kingdom’s dedication to safeguarding its local labor force.
• Noncompliance would result in a suspension of business operations and the granting of visas.

The Professional Verification project, which was introduced in July 2021, was a revolutionary step. This effort evaluated the talents of foreign nationals in 1,000 specialized occupations across 23 areas with the goal of attracting highly skilled expatriates while guaranteeing locals would have plenty of chances. 

In addition, Saudi Arabia removed the Short Term Work Visit Visa in 2019 and replaced it with the Temporary Work Visit Visa (TWVV). The TWVV closed the gaps found in the previous system, protecting the Nitaqat framework. It was expected that multinational corporations and foreign talent looking for short-term work assignments in Saudi Arabia would find this new visa especially attractive.

These modifications highlight Saudi Arabia’s flexible immigration policy, which aligns with Vision 2030’s objectives.  

4. The future and Vision 2030

Saudi Arabia’s Vision 2030 points the country toward a thriving future. Saudi Arabia wants to grow in the tourist, manufacturing, and educational sectors. This endeavor is embodied in the NEOM project, a zero-carbon city that has drawn international investment and generated about 380,000 employees. 

The Kingdom’s immigration setting is changing dramatically in line with economic shifts. The Labour Reform Initiative reduces obstacles for immigrants by eliminating the requirement for permission from their employers to leave and join the nation. Hence, the process of moving jobs between private sector businesses is now more efficient. But first, a few prerequisites must be satisfied.

• May 2021 brought updates to Nitaqat, aiming to create 340,000 jobs by 2024. Economic activities will be streamlined into 32 categories, simplifying the program’s design. 
• Saudisation will adjust national ratios according to a company’s size. This will offer clearer guidelines that increase over a three-year period, enhancing workforce planning.

As a result, this indicates a delicate balance in how Saudi Arabia’s hiring regulations are evolving. While offering jobs to their citizens is the main objective, they also want to bring in investments from other regions. Therefore, these developments would take strategic planning from the government, businesses, and practitioners. It will likely exhibit a delicate balance between international collaboration and Saudi nationals.

Conclusion

It is critical to strike the correct balance between assisting the local population and embracing foreign business.  As Saudi Arabia modifies its labour laws, the newer changes will require businesses and professionals to have a strategy for the way forward.