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MENA Development Partners LLC
MENA Development Partners LLC
Developing successful business relationships in the Middle East.
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Doing Business in the Middle East
Doing Business in the Middle East
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Saudi job market and Expat changes - part 2
| Posted on May 17, 2013 at 11:58 AM |
So tomorrow (Saturday, 18 May 2013) is the day that Saudi
officials will start the expat exit process for those who want to leave the
Kingdom. This entire process, from announcement to implementing has been
worrisome for both the expats themselves and the employers they are working
for. The end of the three-month grace period is 3 July, so there is still a bit
of time for some to figure out what road they will take. Most of the affected
expats come from high poverty countries like India, Pakistan, the Philippines,
Ethiopia and Yemen. If I understand this correctly, under Saudi law, iqama
requires all foreign residents to sponsord by either a Saudi company or an
individual. After the initial announcement, some workers have opt to not go to
work to dodge spot inspections. The Saudi government has decided to enforce
stricter quotas as historically the rule
about expats only working for their sponsor been predominately disregarded. One
of the main reasons this is now being enforced is to close a loophole that permitted
companies to get around sharing how many
Saudi nationals they employ. (If I have this wrong, please feel free to comment
below.)
.
The aim is to tackle the unemployment issue amongst Saudi nationals by getting
more Saudis into private sector jobs and to help preserve Saudi workers However, what is not
being addressed by the changes (and again, if I am wrong, please feel free to
comment) is that Saudis demand higher wages than expats from developing nations
and the local labor laws make it very difficult to fire the Saudi nationals. As
I mentioned in yesterday’s post, many Saudi nationals are not qualified for the
jobs and feel that the positions available are “below them”. The Kingdom has a significant “black market” for cheap expat
labor. What has happened to fuel this demand, many expats are registered with
one company, as a “cover”, but then work for another. Many of these “black
market” expats fear that by coming forward and requesting to change sponsors
will not be granted. As a double whammy, the companies they work for do not
want to officially hire more expat workers. As of today, The Labor Ministry denies reports that it
is enforcing immediate deportations, but people who lose their official residency
status must leave the Kingdom. However, across Saudi Arabia, the affected
workers have been telling stories of spot inspections and sudden deportations. The
regulations were announced last year, the government announced in March that it
would start enforcing the changes with spot inspections. With the deadline of July 3 approaching, these Illegal workers
here are trying to make as much money as possible before they either report and
change their status or go home. They are dodging officials because they know if
they get caught, they are sent home. My concern, as someone investing in the success of non-Saudi
companies coming into the Kingdom for these massive construction projects is
that in order for them to be done on-time and on-budget, these workers are
needed. Some believe this is a passing trend and that the situation will work
itself out It will be interesting to see
how it plays-out and how much actually changes. |
Categories: Construction, Expatriates being forced out of Saudi, Expats in Saudi, hafiz saudi program, Nitaqat, Saudi business, Saudi construction, Unemployment in Saudi Arabia
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