Saudi participation in private sector increases by 30 percent in 2023

RIYADH: Saudi Arabia has seen a noticeable increase in the participation rate of nationals in the private sector, statistics recently published by the Human Resources and Social Development System showed.

The participation rate of Saudis in the private sector increased from 1.7 million in 2019 to 2.3 million this year, including more than 360,000 who had entered the labor market for the first time, the Saudi Press Agency reported.

This led to a decrease in the total unemployment rate to 8.3 percent in the second quarter of 2023, according to the statistics of the Labor Market Bulletin, as a result of the reforms, strategy, and great support that was reflected in the major transformations in the labor market for Saudis.

The Ministry of Human Resources and Social Development has made many efforts to turn the labor market in the Kingdom into an attractive one for talent and competition in global markets.

The labor market strategy, through its initiatives in support of the Kingdom’s Vision 2030, has contributed to achieving tangible results at the national level, with the Kingdom achieving first place among the G20 countries in the growth rate of worker productivity for 2022, with a growth rate of 4.9 percent. The efforts also contributed to reducing unemployment rates among Saudi women to 15.7 percent.

A World Bank report released on Nov. 22 praised the progress of Saudi women in the workforce, with their participation increasing from 17 percent in 2017 to 35.3 percent in 2023. The presence of women in leadership positions and new fields, such as the tourism and entertainment sectors, has also increased.

A report issued by the National Labor Observatory recently showed the success of the ministry’s plans in sustaining citizens in the private sector for more than 20 years, the result of training opportunities and financial incentives.

Through its strategy, the ministry has worked to empower women, increase nationalization, build skills, and develop the work environment.

It has also worked to increase the level of Saudi participation in the labor market through initiatives to activate the supply and demand forecasting unit.

The management of the Saudization file was transferred to six ministries for direct supervision, and 45 localization decisions were issued in specific activities and professions in various sectors. It also launched the National Skills Strategy to raise the Kingdom’s ranking in the Global Talent Index from 30 to 20 in 2026.

The Ministry of Human Resources and Social Development established 12 sectoral skills councils to develop professions according to standards that meet market requirements.

These efforts resulted in an increase in the rate of Saudis in the targeted professions, such as engineering from 40,000 to 70,000 and accounting from 42,000 to 103,000.

The ministry is working to cover 2,000 skills and develop standards for 300 jobs by 2025.

It also launched the Skills Accelerator initiative and provided training vouchers to individuals to develop high, medium and low-level skills of national cadres and raise their productivity.

The initiative aims to train more than 322,000 employees in 126 professions in the private sector. Also launched was the national training campaign Waad, in cooperation with 14 national companies, to motivate the private sector to train workers.

The initiative succeeded in achieving its goals during the first half of 2023, with the number of opportunities exceeding 193,000. The campaign aspires to reach 1,155,000 people by 2025.

Female beneficiaries were also trained on the job as part of the Parallel Training Initiative 2023, achieving 62 percent of the initiative’s target with 62,254 participants.

The ministry was able to automate more than 80 percent of its services, offering over 1,000 digital services, and it aims to add 300 new services to its digital platforms next year.

The ministry’s Qiwa platform, which is designed to simplify and streamline the process of founding and operating businesses in the Kingdom, documented more than 5 million contracts that contributed to preserving the contractual relationship between workers and employers.

The platform also contributes daily to the completion of more than 1 million digital transactions for the labor sector. The rate of amicable settlement of labor disputes rose to 73 percent, the rate of compliance of private sector establishments with the regulations and decisions of the labor system to 92 percent, and compliance with localization decisions to 98 percent.

The number of beneficiaries of the remote work model over the previous year exceeded 135,000 contracts with a growth rate of 10 percent, 240,000 self-employment documents with a growth rate of 7 percent, and 365,000 flexible jobs with a growth rate of 6 percent.

The Human Resources Development Fund helped 1.4 million Saudis through training, empowerment and guidance support programs during the first half of 2023.

Some 79,000 establishments benefited from the support of the fund in various regions of the Kingdom, with around 95 percent of these medium, small and micro enterprises. The support expenses provided to empower Saudis exceeded SR4.6 billion ($1.226 billion) during the first half of 2023.