Question

The Saudi Arabian economy has developed with the use of large numbers of expatriate workers. In a critical essay, indicate the benefits and risks associated with the dependence on large numbers of expatriate workers. Should Saudi Arabia seek to include or exclude labor mobility in future regional free trade agreements? Why or why not? What implications does the Saudi Vision 2030 have on labor mobility?

Answer 1

BENEFITS OF BEING AN EXPACT WORKER:

INTERNATIONAL EXPERIANCE:

Depending on the role the expact may have a great professional skill and he can be a best candidate for the position, and expacts have some unique personal qualities which will be more helpful for the growth and the sucess of the company.

BETTER RECRUITMENT CHANCES:

If a just started business in a relatively unknown or small job market abroad, you may find it difficult to recruit the right candidate within your geographical area. There’s always the risk that the hard or soft skills you are looking for aren’t available or are very limited in the country you are operating. In this case, opening your horizons to global talent gives you more chances to find the ideal candidate from a variety of professional and educational backgrounds.

INNER MOTIVATION:

Expats tend to be self-motivated, daring people, who look at life’s bigger picture. The process of moving abroad comes with many rewards but also challenges, which make the expat a stronger and often a better version of who they are. The expat has left home for a reason whether it is professional or personal development and will work hard to make their expat project a success regardless of the obstacles that come along the way.

APPROPRIATE EXPERTISE:

If you are an entrepreneur who is doing something pioneering in a country that has no previous experience of such a product or service, it will be difficult to achieve 100 percent engagement of local employees with your business’ and vision for the future. However, an international candidate may have worked in a similar field before and may be ready not only to execute your plan, but also to bring new ideas in, expertise, and knowledge to move your concept forward.

RISK OF BEING AN EXPACT WORKER:

HIGHER COSTS:

One of the main concerns for employers who are considering hiring a workforce of expats is costs. Expat employees come at a higher price due to accommodation and transport allowances, relocation packages, international health insurance, and visa sponsorship. Also,expats are usually not immediately available to start and can cost you time as well time to relocate, complete the visa process, and adapt.

RIGOROUS IMMIGRATION REQUIREMENTS:

Different countries have different regulations for hiring expats. Among some of the things that should be considered by both sides are the type and duration of the visa, the role and whether it is open to expats, and the occasion of change of employer. You are well-informed about all of the paperwork involved and consult the immigration office in the country of business before you make arrival arrangements with your first expat employee. Keep in mind that if things go wrong it may cause damage to your reputation as an employer within the country and abroad.

MORAL SUPPORT:

Expat life is a rewarding experience. However, it can be very challenging at times. Often, feelings of loneliness, culture shock, and homesickness overwhelm expatriates, and not every expat is equally prepared to deal with such intense and possibly new emotions. Thus, as an employer, you must be well-prepared to deal with these types of unpredictable situations and follow up with your expat employees on a regular basis to prevent the worst case scenario of losing excellent staff due to external factors.

LEGAL RISKS:

National employment laws and regulations regarding payroll, tax, and pension are often different for the local population and the expats. As with the immigration requirements, you should ensure compliance with the legal requirements too of the country your business operates in. This will save you the headache of having to deal with the local authorities, which may be a lengthy and costly process for both you and your employee.

SAUDI ARABIAS VISSION ON 2030:

In late April 2015, Saudi Arabia's Deputy Crown Prince Mohammed bin Salman, announced an ambitious and ground breaking programme to develop the Kingdom's economy and society over the next fifteen years. How the programme will be implemented together with the immediate five year plan set out in the National Transformation Plan 2020 will be of key interest to businesses operating in the Kingdom. In this article, we examine the main likely employment implications of Vision 2030 and the introduction of 'weighted Nitiqat.'

Vision 2030 envisages an annual growth rate of 10% in retail, the workforce for which amounts to 1.5 million works, only 0.3 of which are KSA nationals. By 2020, the aim is to have 1 million more Saudi nationals working in retail by 2020.

Considering that unemployment is estimated at 29% among Saudis under the age of 30, job creation should be a major priority of economic reform. With a quickly rising youth population, there is little time to waste: around two thirds of the current population of 29m is under 30, and 1.9m Saudis are set to enter the workforce over the next decade. Privatisation will not necessarily create the number or type of jobs needed for a growing number of Saudi citizens.

The Kingdom’s workforce remains deeply segmented between an overstaffed public sector, and a drastically underdeveloped private sector. More than two thirds of employed Saudis work in the public sector, while more than 80% of the private sector is made up of expatriate labourers. The vision implies a reduction in public sector jobs, when it states an aim to “cut tedious bureaucracy” and to decrease government spending generally. Considering that high-paying government jobs have become the norm for many Saudi citizens, decreasing their availability could drive up unemployment among nationals.