The Role of the Private Sector towards Saudization (Localization)

Dr. Adel S. Al-Dosary

Professor, and Chairman
Department of City and Regional Planning
College of Environmental Design
King Fahd University of Petroleum & Minerals
E-mail: asdosary@kfupm.edu.sa

Syed Masiur Rahman

Lecturer-B
Department of Civil Engineering
College of Engineering Sciences
King Fahd University of Petroleum & Minerals
E-mail: smrahman@kfupm.edu.sa
Phone: +966-03-8602719

Abstract
This paper introduces the concept of Saudization and briefly reviews its existing and
potential impacts and consequences. The Saudi Government embarked on the
Saudization of the work force as a strategic objective to nationalize the workforce and
tackle the problem of unemployment among the nationals. The governmental policy
seeks to force the private sector to hire more Saudis, to establish a priority for hiring
the domestic workforce without relying on market forces and incentives. This paper
emphasize on the extent of participation of the private sector and the fundamental
reasons which are contributing in the unwillingness to actively participate in the
Saudization program. It also investigates the measures which might help increasing
the participation of the private sector. This paper recommends adopting a participatory
approach in policy making process regarding Saudization where the private sector can
participate actively with other counterparts.

Kew Words: Saudization, Private Sector

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 The Role of the Private Sector towards Saudization (Localization)

Introduction

The term Saudization can be defined as a development strategy that aims to replace
foreign workers with Saudis (Looney, 2004a). According to Taecker (2003)the benefits
of Saudization are very straightforward. It will simply bring back the money that would
have been remitted to families outside the kingdom (9 per cent of GDP or $14 billion in
1999 alone) would then be spent domestically. In general, the Saudization mainly focuses
on three main goals, which are as follows:
 Increasing employment for Saudi nationals.
 Reducing and reversing over-reliance on foreign workers.
 Recapturing and reinvesting income which otherwise would have flowed overseas
 as remittances to other countries.
(Looney, 2004a)
The government has forced the public sector to hire Saudis for non-existent jobs, turning
government agencies into a vast social welfare system. Consequently, 65 per cent of the
Saudi annual budget is earmarked for salaries and that proportion is bound to increase
(Raphaeli, 2003). In the sixth Jeddah Economic Forum, Labor Minister D. Ghazi Al
Gosaibi stated that Saudi Arabia will increase the pace of Saudization (Trade Arabia,
2005). According to the Minister, the national employment strategy is to achieve 100
percent Saudization. It will result the employment of 120,000 Saudis in the private sector
every year. The Kingdom has seventy-five training institutes with extensive courses for
various professions and vocations. These institutes are expected to train 300,000 young
Saudis within three years (Trade Arabia, 2005).

The Saudi Arabia government embarked on Saudization of the workforce aiming to re-
nationalize the workforce and tackle the problem of unemployment among Saudi
graduates. The policy seeks to force the private sector to hire Saudis first instead of the

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expatriate. Companies with more nationals on their payroll would have an advantage in
bidding for the projects of the public sector. Local chambers of commerce are assisting in
achieving the goal of Saudization by organizing internship projects that could result in
employment for graduates. Despite these efforts, significant progress has been achieved
only in the public sector and most of the government institutions have been able to raise
the percentage of Saudis in their labor force to about 65 per cent. About 500,000 visas
were issued for foreign workers in the private sector in 1995 (Saudi Embassy, 1996a).

The government has put a lot of effort into ensuring working places for Saudis through
establishment of several programs such as attracting of foreign investment and the
Human Resources Development (HRD) Fund, and the scheme (Co-operative Training
Scheme and Saudi Human Resources Fund), which was announced by the government in
1999, is expected to provide apprenticeships which will act as a type of school-to-work
transition program. The HRD Fund contributes 50 per cent of the Saudi staff member
salary and 75 per cent of the training cost in the private sector for two years (Alzalabani,
2004). Looney (2004b) suggested the following governmental strategies for expanding
employment opportunities:

 Increasing the relative attractiveness of working in the private sector

 Reducing disparities in labor mobility for both nationals and expatriate workers
 Encouraging skill acquisition among nationals
 Facilitating improvements in productivity and investment in capital
 Using price-based rather than quantity-based market interventions.

This paper is divided into five sections. The next section investigates the characteristics
of the Private Sector. The third section focused on the Governmental intervention for the
higher employment of nationals. The fourth section discussed on the reasons of higher
number of expatriate employees in Private Sector. Finally, this paper provides a list
recommendations.

Characteristics of the Private Sector

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According to the Sixth development plan (1995-2000), the Saudi private sector can be
divided into three categories: a) commercial, industrial, and service establishments
registered in the Commercial Register; b) retail outlets and small service facilities and
workshops licensed by the municipalities; c) agricultural holding and related production
units. There are some general characteristics of the private sector in Saudi Arabia like
other developing countries. “Some large organizations in the Saudi private sector are
jointly owned by the public and private sectors. Some large companies which are
essential for the country such as electricity, transportation, and giant industrial
organization are initiated and owned partly by the government, with the aim for
privatizing the government share in future” (Ewain, 1999). The unique characteristics of
the private sector are based on the following: a) companies are mostly family owned with
entrepreneurial orientation; b) the management policies are of short-term in application;
and c) this sector is relatively young and small-scale in nature (Alaki, as cited by
Abualjadial, 1991).

Governmental Intervention for the Higher Employment of Nationals

According to Sheras (1994), the economic problems which the Kingdom experienced in
the mid 1980’s due to the unfavorable oil prices cause the Saudi government to focus on
expanding the role of the private sector in molding the economic picture and the makeup
of the workforce in the Kingdom because of the inability and unwillingness to grant
government jobs to every citizen.

As the private sector is not meeting the expectations of the government, the government
is imposing stricter labor laws. During the period of 2000-2004, the government imposed
a low that monitors private entities’ applications to import expatriate labor (Ibrahimkhan,
2006). Only the private sector institutions which are in compliance with the Saudization
policy would receive governmental approval (Al-Humaid, 2004). “A 1995 resolution by
the cabinet of ministers requires each private-sector institution employing 100 or more
laborers to staff five percent of its total labor force with Saudis” (Ibrahimkhan, 2006).

Table 1 indicates that the governmental effort is causing decrease in the percentage of
expatriates in private-sector organizations but the rate of it is small. Table 2 indicates that

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the aggregated labor forces are increased by around 27% between 1995 and 2000. Table
3 indicates that the growth rate of Saudis is significantly higher than the expatriates in the
private sector during the period 1995 to 2000.

Table 1

Saudi and Expatriate Workers in Private Sector Organizations

Total labor in
Saudi private-sector Percentage of expatriates in
Year nationals Expatriates organizations private-sector organizations
1982 223,187 982,612 1,205,799 81.49%
1983 210,171 1,005,439 1,215,610 82.71%
1984 230,421 1,160,962 1,391,383 83.44%
1985 264,804 1,389,371 1,654,175 83.99%
1986 284,188 1,335,072 1,619,260 82.45%
1987 289,411 1,215,879 1,505,290 80,77%
1995 448,713 1,759,566 2,208,279 79.68%
2000 647,784 2,163,117 2,810,901 76.95%
“From “Working Paper” (p.12), by Riyadh Chamber of Commerce & Industry, 1989.
“From “Economic Development Created “Saudization” in the private Sectors without Any Official
Resolution”, by Yasin Al-Jifry, 2003 (January 11), Al-Eqtisadiah, p.17.

Table 2

Employment Volume and Its Progress in Private Sector Organizations

1995 1996 1997 1998 1999 2000

Aggregate labor 2,208,279 2,410,444 2,553,797 2,638,082 2,691,440 2,810,901

*From “Economic Development Created “Saudization” in the Private Sectors Without Any Official Resolution,” by
Yasin Al-Jifry, 2003 (January 11), Al-Eqtisadiah, p.17.

Table 3
Employment Volume and Its Progress in Private-Sector Organizations – Saudis vs. Expatriates.

Group 1995 2000 Growth (%)

Saudis 448,713 647,784 44.36%
Expatriates 1,759,566 2,163,117 22.93%
*From “Economic Development Created “Saudization” in the Private Sectors Without Any Official
Resolution,” by Yasin Al-Jifry, 2003 (January 11), Al-Eqtisadiah, p.17.

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Although the government expected that private sector will play a role in replacing the
expatriates with nationals, the number of expatriates employed in the economy increased
rather than declined (MPKSA, 1990, p 115). One of the goals of the sixth development
plan (1995-2000) was to increase the “private sector’s contribution in the provision of
jobs” (MPKSA, 1995) which is supported by another goal which wanted the private
sector to replace expatriates by the nationals and create new job opportunities for the
Saudis (MPKSA, 1995). The plan focused on “appropriate policies for addressing human
resources development constraints, the replacement of expatriates by Saudis, and
encouraging the private sector to provide more job opportunities for Saudi citizens”
(MPKSA, 1995). In the seventh development plan (2000-2004), the goal of Saudization
was set “to develop human resources and continually ensure an increasing supply of
manpower; upgrading its efficiency sufficiently to meet the requirements of the national
economy, and replacing non-Saudi manpower with Saudi” (MPKSA, 2000). In fact, the
plan focused on “improving the productivity and efficiency of Saudi workers and
removing Saudization constraints in public- and private-sectors organizations, increasing
the private-sector organizations’ absorptive capacity to employ the growing number of
graduates, instituting a mechanism to enhance the role of private-sector organizations in
providing training facilities, developing training programs and supporting pre-service and
on-the-job training” (MPKSA, 2000).

Table 4

Expatriate and National Workers in Saudi Arabia

Total labor Percentage of expatriates

Year Nationals Expatriates force in the labor force
1978 990,422 1,049,126 2,039,548 51%
1979 989,650 1,216,917 2,206,497 55%
1980 1,096,664 1,374,536 2,471,200 56%
1981 1,221,337 1,464,960 2,686,297 55%
1982 1,302,634 1,664,970 2,967,604 56%
1994 2,544,800 3,945,100 6,489,900 61%
1999 3,172.900 4,003,400 7,176,300 56%
2000 2,895,000 4,146,000 7,041,000 59%
2004 3,990,200 3,514,700 7,504,900 47%

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 2020 8,263,000 2,483,000 10,746,000 23%
Note: Figures up to 1982 are adapted from The Impact of Expatriate Workers on the Economy of Saudi Arabia: A
Computable General Equilibrium Results, by S. A. Tawi, 1989. Unpublished doctoral dissertation, Oklahoma State
University, Stillwater. Figures from 1994 to 2020 are from the Seventh Development Plan (pp. 63,78), by MPKSA,
2000.

The government is expected that the percentage of expatriates is decreasing in recent

years significantly and it will ultimately reach to 23% in 2020 (Table 4).

The labor market objectives stated in the Sixth development plan (1995-2000) are a) to
replace non-Saudis by appropriately qualified Saudis in a gradually progressive manner
in all occupations and economic sectors; b) to rationalized the growth of the non-Saudi
labor force in all occupations and economic sectors; c) to provide job opportunities for all
Saudi new entrants to the labor market, mainly in the private sector; d) to increase job
opportunities for women in conformity with the Islamic Sharia; e) to increase the number
of graduates with skills and qualifications consistent with the requirements of the national
economy; f) to reduce the number of unskilled Saudis entering the labor market before
completing their education and training; and g) to develop labor market services,
including appropriate statistical information services.

The eighth development plan (2005-2009) realized the need of an integrated substitution
strategy to find out the solutions to remove the constraints that hinder Saudization by the
private sector in the short, medium and long terms. Although the private sector has
provided about 693,000 jobs for Saudi nationals under the Seventh Development Plan
(2000-2004), compared to about 291,000 jobs under the Sixth Development Plan (1995-
1999), the share of Saudis in total private sector employment is only 35.5% in 2004
(Table 5). The eighth development plan found out that

“…unemployment in the Saudi economy is “structural”, in that it is the result of a

fundamental mismatch between demand for and supply of national manpower, in
terms of both quality and quantity. In other words, unemployment is not merely a
consequence of a lack of vacant jobs due to a downturn in the economy. Rather,
the supply-demand mismatch in the labor market and lack of attractiveness of
work in the private sector are due partly to the relatively low wages and more
importantly to a “skills imbalance”. Many Saudis looking for jobs do not have the
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 skills sought by the private sector. Hence, it is important to take necessary actions
to achieve the required match, through an integrated strategy based on a long-term
future vision of Saudization”.

Table 5
National and Expatriate Employment (2000–2004)
Private Sector Employment
(thousand) Share of
Year
Non- Saudis (%)
Saudis Total
Saudis
2000 1912 4134 6046 31.6
2001 2043 4411 6454 31.7
2002 2156 4946 7102 30.4
2003 2312 4800 7113 32.5
2004 2512 4564 7076 35.5

Source: The Eighth Development Plan (2005-2009)

Reasons of Higher Number of Expatriate Employees in Private Sector

Shah (2006) investigated the difficulties associated with the success of localization in the
Gulf which are specifically more relevant to Saudi Arabia. “Primary among them are: 1)
the lucrative nature of visa trading for the local sponsors, along with a ready and eager
market of workers willing to buy such visas; 2) the continued reluctance of the locals to
take up jobs that have come to be seen as “foreigner’s work” even though small
attitudinal changes are beginning to be reported; 3) preference among nationals for public
sector jobs that are almost guaranteed by virtue of nationality; 4) the near impossibility of
the employer to fire inefficient national workers in the government sector, resulting in
poor productivity and over-employment of nationals; and 5) the inherent contradiction
between policies to limit the number of expatriate workers on the one hand and develop a
thriving private sector that relies extremely heavily on the import of such workers to
survive and flourish.” (Shah, 2006). In general the policies aimed at reducing the supply
of, and demand for, foreign workers in the Gulf can be summarized as below (Figure..).

Figure : Policies aimed at reducing the supply of, and demand for, foreign workers in the
Gulf.

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Policies aimed at affecting:

Supply of foreign workers Demand for indigenous workers

 Direct and indirect taxes on migrant 1. Creating job opportunities for

workers (e.g. health fees) nationals

 Periodic amnesties a. Vocational training for nationals

 Stricter regulation of visa issuance b. Enhancing private sector

in sending countries benefits

 Restrictions on visa trading: stricter 2. Encouraging nationalization

implementation of laws through market based measures

a. Fees for employing expatriates

b. Cash benefits for employing

nationals

3. Forcing nationalization of labor

force through administrative
measures

a. Nationalization of the public-

sector work force

b. Quotas on employment of
nationals

c. Ban on hire expatriates in

certain sectors

d. Tightening of immigration
legislation

Source: Fasano and Goyal, 2004 and Shah 2006

The study of Al-Hassan (1988) on 55 private-sector organizations in the city of Al-Hassa

revealed that there are three reasons which causes the private-sector organizations to
employ more expatriates than Saudis: 1) expatriates are more qualified; 2) expatriates are
not expensive; and 3) the national students tend to undertake theoretical studies.

9
Relocation might play a role in considering public-sector organizations more preferable
compared to the private sector organizations. The availability of jobs in any locality
makes the Saudi nationals to prefer job public sector organizations (Al-Towajiri, 1992).

The secured nature of job in public sector also plays a role in selecting jobs
(Ibrahimkhan, 2006). In Saudi Arabia, the government rarely dismisses any employee
and it is unusal that the government organization will close down. Due to the inherent
attitude and the cultural backgrounds of Saudis make the nationals more likely to prefer
white-collar jobs in public organizations.

Al-Ajaji (1995) found out that the new Saudi entrants to the labor market shows
preferences for employment in the public sector over that in the private sector due to the
following reasons: a) higher wages at middle and low-level positions in the public sector;
b) greater job security in the public sector; c) better working conditions in the public
sector in terms of working hours and employment regulations; d) the higher prestige of
the public sector; and e) better changes of promotion in the public sector.

Lack of policies at least during the early 1990’s play a negative role in meeting the
expectation of the Government regarding Saudization in the private sector. According to
Sheras (1994), “a wide gap exists between Saudi public educational curriculum and its
supposed mission of providing needed tools for work required as part of real life….In its
current form, the Saudi educational system does not put needed emphasis on the meaning
of work, nor does it offer practical tools for working”. The absence of coordinated efforts
of educational and administrative organizations in the development of coherent
employment, educational and training programs retards Saudization (Alogla, 1990).

“An expatriate labor force is viewed by the private sector as a more cost-effective and
low-risk alternative to hiring Saudi university graduates” (Al-Ajaji, as cited by Ewain,
1999). In fact, higher salaries and other benefits required by the Saudis in the private
sector compared to those of expatriates serve as an obstacle to the employment in the
private sector (Al-Ghaith and Al-Maashoog, 1996). Finally, the private sector encouraged
the influx of foreign labor in the Saudi Arabia (Alogla, 1990).

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According to Al-Ghaith and Al-Maashoog (1996), the Saudi private sector employer
exaggerates when determining the profit/loses factor for the case of employing the
nationals. “As long as the private sector is not responsible for paying the actual costs
associated with its employees, it will continue accelerating the importation of foreign
labor, thereby perpetuating the problem” (Sheras, as cited by Ewain, 1999).

The study of Aloga (1990) on the factors facilitating or hindering the process of
Saudization in private-sector organizations in Saudi Arabia found that the Saudi
graduating students from the university and/ or vocational schools have required
education and training for jobs and have impartial attitude towards both public-and
private-sector organizations. Moreover, they are also interested to work at jobs which are
traditionally rejected. On the other hand, “the present educational and training programs
in Saudi Arabia were designed to fit the needs of the public sector and that most of these
programs do not meet the changing need of the private sector” (Alogla, as cited by
Ewain, 1999).

The study of Al-Ajaji (1995) revealed that insufficient computer skills and poor
proficiency in English were creating obstacles for the nationals to enter in private-sector
organizations. He also concluded that a majority of the Saudi graduates simply preferred
to work in public sector organizations. He also found out that there is a mismatch
between the fields of specialization required by the private sector and the major fields of
study pursued by the Saudi university graduates.

According to Mackey (1990), the Saudis are not interested about manual works rather
they prefer bureaucratic works. “A Saudi will accept a position but not a job. A Saudi
will ring the cash register in his shop but will not sweep the floor. A Saudi will be a
bureaucrat but never a plumber.” This sort of mental set influences the Saudis to prefer
the public sector organizations than the private sector organizations. However, the recent
studies on this issue can exactly find out the persistence of the findings of the earlier
studies.

The private sector exaggerates the required academic qualifications and work experience
needed for employment (Al-Ghaith and Al-Maashoog, 1996). Although the experience is

11
not the real reason for preferring the expatriate over the national the private sector uses
the inflated requirements as a ploy to exclude Saudis from employment (see Sheras, 1994
and Ewain, 1999).

According to Alogla (1990), the failure of the media to play the key role by linking the
social domain and economical institutions together hinders Saudization.

In Saudi Arabia, “the social and cultural barriers against female interaction with men
seem to stall any effort to increase female participation rates” (Al-Dosary, 1991). “The
development plans all have ignored the role of women and treat it as a minor issue”
(Alogla, as cited by Ewain, 1999).

Ramady (2005) investigated the reasons for the private sector’s resistance to Saudization
and summarized them in the Table 6.

Table 6 : Private sector Saudization issues. (Ramady, 2005)

Issues Private Sectors’ Justifications

1. Labor cost The relatively high cost of Saudi manpower, compared to foreign
manpower, results in private sector reliance on imported cheap
manual labor, deployed in labor-intensive occupations. This helps
private sector profitability despite government attempts to increase
expatriate costs (Residency or Iqama, Visa renewals, etc. )

2. Social and Saudis are reluctant to take up and seriously pursue certain type of
Cultural jobs, despite Saudization directives. For example, the forced
Perceptions Saudization of employees in the vegetable market has failed. Social
status is still important for young Saudis as it affects marriage and
other social relations.

3. Control over Expatriate workers are easier to
process of Saudis. Control is exercised
production contracts. In some cases, there
expatriates, who are prohibited
sponsor’s permission.
control and more disciplined than
through short-term employment
are few legal obligations towards
from changing jobs without their

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4. Lack of Local populations are reluctant to integrate into multi-cultural work
social integration environments, fearing that it might degrade their existing status.
in multi-cultural
work environment

5. Job tenure It is more difficult to fire Saudi workers than foreign workers.

6. Inadequate Saudi employee may have inadequate qualifications, a lack of

qualifications English or a non-technical background.

7. Mobility Saudi workers are less mobile than foreigner workers; they are
reluctant to change job locations.

A recent labor market survey that was conducted across all sectors of employment in the
private sector had shown that the following 17 factors contributed significantly to the low
rate of Saudi work force participation in the private sector. These factors are:

1. Poor command of the English language among Saudi worker vs. foreign
workers.

2. Exaggerated job qualifications required by the establishments for hiring

(diploma, practical experience, foreign language, etc.)

3. Foreign Managers & Consultants discrimination against Saudi worker in

favor of their own nationals in the private sector employment policies.

4. Foreign workers competition with Saudi workers over the private sector jobs.

5. Long working hours, shift work hours, shorter week end & annual vacation
time vs. public sector jobs.

6. The attractiveness of the public sector jobs (packages), for Saudis

(scholarships, job security. etc). vs. private sector jobs.

7. Higher minimum wage and other economic costs that are acceptable to the
Saudi worker vs. the foreign worker, due to the higher quality of life & cost
of living among Saudis.

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 8. Lower wages & benefits that Saudi executive workers can find in the private
sector.

9. The use of benefit/cost analysis policy as an utmost priority decision making

tool for employing Saudi vs. the cheaper foreign alternative.

10. Inflexibility of the Saudi worker to accept employment anywhere in the

Kingdom vs. the foreign worker.

11. Relatively fast & easy access to foreign workers both in type & quantity
suitable for the establishment vs. the Saudi workers.

12. Relatively easy & fast process of terminating the foreign worker employment
contract vs. the Saudi worker.

13. Inflexibility of relocation within the Kingdom of Saudi worker vs. foreign
worker.

14. Lack of regulation forcing the private sector to fill a set percentage of their
work force by Saudis.

15. Not linking the government subsidies to the private sector establishments
with their employment of Saudi Workers.

16. The need for a more comprehensive training, as a part of an ongoing process
of career development for Saudi workers in the private sector establishments.

17. The need for a national comprehensive awareness campaign, with an

application and enforcement mechanism, aimed at emphasizing the
importance of the private sector and its jobs, as well as the importance of
Saudi worker and the benefit resulting from his employment with private
sector.

Essentially, these 17 factors are believed to be the leading factors, for the problem of low
participation rates for the Saudi work force in the private sector. Some of these factors
have been addressed by media campaigns and regional governmental initiatives, but their
effect remains to be seen.

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Although the general perception about the private sector is that they are reluctant to hire
nationals they are contributing in hiring nationals. In fact, they are failing to keep pace
with the steadily growing number of Saudis, and to meet the expectation of the
government. The private sector organizations provided about 473,500 jobs for Saudis
during the sixth development pan (1995-2000). On the other hand, the government-sector
organizations provided only about 154,700 jobs for the Saudis.

Recommendations

The private-sector economy should operate as a support for the public sector. In
developed countries the private sector is the backbone of the public sector. In the
developed world that means that the private sector dictates salaries and benefits and is the
preferred career route, in Saudi Arabia the opposite prevails. A young educated Saudi
will be better off working for the government than for the private sector. Hence, the
public sector benefits and salaries also dictate the salaries and benefits expected by
students in the private sector, as well as their career plans and expectations. In the
competitive world of private sector these salaries are not possible and hence this area of
the economy is not attractive, and hence supported by much cheaper workforce, mostly
stemming from Third World countries.

It is essential to increase Saudi presence in the private-sector economy. Attempts should

be taken to make the public sector less attractive to the young Saudis. Measures that can
be considered in this regard are establishing a minimum Saudi wage, limiting the working
day to eight hours and creating social insurance and pension plans similar to those
available in the public sector.

A long-term perspective calls for a greater diversification of the labor market.

Diversification of the labor market so far has concentrated on associated petrochemical
and construction markets, or non-productive service industries, rather than on export-
earning projects that have the potential for sustained growth and job development. It is

15
becoming increasingly evident that labor market and educational reform are the most
vital fields of public policy reform, today and in the years to come.

Private sector companies should learn to make the workplace more attractive, to
encourage the youth to stay for longer periods. Better working conditions, a feeling of job
security and other incentives could help in this regard. A proper system of human
resource development should be carefully devised and implemented. This involves the
application of most effective methods of improving the conditions of workforce, along
with current and future need of the labor market.

It is needed to seriously re-evaluate existing manpower institutions, such as the

Manpower Council. The evaluation should be based on past performance and the ability
to interact actively and positively with various government and private-sector institutions.
A new institution of a high technical and managerial proficiency is needed to deal with
the problem of Saudi youth and other manpower issues in the Saudi economy. The
private sector and the concerned government bodies should participate in the formation of
a higher council for manpower. The active participation of the private sector in the
management and decisions of the new manpower institution must be an essential part of
the restructuring.

Attempts should be undertaken to formulate a database for studying and analyzing future
market as well as educational trends. A process of networking of human and technical
needs by data base collection and documentation should be initiated.

It is essential to cultivate work ethic/culture among the Saudi youth. There has been a
strong inclination among Saudi students to aim only at mid- to high-level job positions.
Even though, now the prospect of unemployment is encouraging a growing number of
students to accept positions at all levels, a lot of efforts are still required in this regard. It
is essential to infuse a sense of pride and commitment in their assigned jobs, whether
low- or high-level positions.

One of the complaints of private sector with regard to hiring Saudi youth is that they find
it hard to control them as compared to expatriates. The young Saudi generation needs to

16
develop a more professional attitude. The need for teamwork and the importance of
filling up of all levels of employment levels for the overall good of the company and the
country. On part of the companies, they should get over this idea of control and start
working on creating loyalty. That is the goal of companies all over the world and its time
that it happened here.

Policymakers need to focus on the cultivation of Islamic values among the youth –
particularly in larger cities, which are more, exposed to growing Western influence and
trends, degrading traditional, Islamic morals and values in the process.

Based on the study of Ibrahim khan (2006) the preceeding recommendations are stated
toward the governent. The government should continually invest in education and
campaign the benefits associated with better education through all available medias. The
government can encourage the private sector to emphasize on hierarchical levels. Even
sometimes only the renaming the job title can encourage Saudis to prefer private-sector
organizations. The government should take steps to make the entry levels in public sector
less attractive compared to the private-sector organizations by decreasing the salary at
entry levels. However, the government can also force the private-sector organizations to
increase the entry-level salary for the sake of the country. Both the public and private –
sector organizations should implement advancement plans in the organizations based on
factors such as aptitude test rather than experience only. The government should take
measure to break the perception of lifelong job security in the public sector employment.

ACKNOWLEDGEMENT

The authors acknowledge the support of King Fahd University of Petroleum & Minerals
(KFUPM) through internally funded project # IN070353 in conducting this research.

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