By Joanna Hartley
Companies must make foreigners redundant first so that nationals can be moved into their positions.
Companies operating in Saudi Arabia have been told by government officials to fire expatriates before axing locals if lay offs are necessary, it was reported Saturday.
The report comes after Saudi Arabian Basic Industries Corporation (SABIC) and Microsoft Saudi Arabia announced plans to downsize.
Several other companies are expected to follow suit in the weeks and months ahead as the credit crunch worsens, according to Saudi daily Saudi Gazette.
Muhammad Al Hamdan, head of the Labour Office in the Eastern Province said labour office inspectors had started investigating companies believed to have fired Saudi staff because of the credit crunch.
Businesses were not allowed to axe nationals but had to retain them by transferring them in to other jobs in the firm, made available by firing expatriate staff, he added.
Officials had already visited major companies like SABIC – whose profits plunged 95 percent last year as a result of the global slowdown – to ascertain that the Saudisation process was intact.
As yet, nothing has been documented about Saudis being fired, Al Hamdan said.
According to the ministry the unemployment rate among Saudis (men and women) stands at 5.4 percent, but government data shows it is closer to 11 percent.
Last week at the Arab economic summit in Kuwait it was announced that the Arab world lost as much as $2.5 trillion in the past four months because of the global meltdown
The problem with terminating ex-pats first instead of Saudis could be any of the following: 1) Saudis are more than likely paid higher packages/wages than ex-pats so a company may have to terminate 2 or 3 ex-pats to equal the package of 1 Saudi employee. If the goal is to save money then firing 1 Saudi makes more economical sense than firing 1 ex-pat. 2) When terminating employees the work may still exist but it must be taken up by others. Anyone who has worked in Saudi Arabia knows that to assume the Saudi employees will take on the extra work from a terminated ex-pat employee is unrealistic and will not happen. The work will probably fall onto the remaining ex-pats, whichever ones are left. 3) To assume an employee of any nationality can just be "transferred" into another job is ridiculous. Large companies may decide to terminate where they can. To assume a Saudi employee can just be transferred without regard to education and experience for whatever position is now open is just ridiculous. Even in Dubai there was announcement that Emirati security guards must be paid at least AED 6,000 per month while an ex-pat is paid at least AED 2,000. If Saudi has the same situation regarding pay packages then Saudi companies will be struggling between the balance of offloading salaried employees while still keeping enough people to get the work done.
This is rich coming from a country that still needs expats to get the oil out of the ground even after five decades and has never taught a local to do the job for fear of getting their blinding white thobe sullied. Just don't come crawling and tugging on your gutras when you need expats back to do your dirty work, having failed to get up in time to do it yourselves. Oh, and maybe it is time to remove your gin palaces from Monte Carlo.
From what I hear, the same is being done in UAE with the expatriates taking priority in the layoffs... Hmmm... I wonder how productivity will be impacted at these companies??? Could add fuel to the fire in these economic times.
This is the clear indication of how greedy some countries have been. But just keep in mind that the expatriate talents are far outstanding than your local talent and by driving them out you will be in really big trouble. Don't be overconfident in your talents. This applies to all the GCC countries.
Yes, this will definitely work as Saudi employees usualy are the better qualified and harder working staff in all companies. Thumbs up...
So, the Saudi government wants to fire expatriates.. but aren't the expats the most productive aspect of the saudi workforce?
"According to the ministry the unemployment rate among Saudis (men and women) stands at 5.4 percent, but government data shows it is closer to 11 percent." Sounds like the ministry and the government disagree on data. I thought the ministry IS the government. That's a bit schizophrenic, isn't it?
Enterprises will be crippled for the future unless they are able to strategically manage their personnel. Redundancies need to be based on skillset and performance. I used to operate union businesses in Canada , and could make staffing decisions only based on seniority, which is like having to decide based on nationality. To excel in hard times we need to be able to have the most qualified people on board.
I find this absolutely absurd. In a time where we should be encouraging individual performance enhancements we have governments 'saying' to commercial entities, 'Let's not reorganise based on numbers, let's prioritise by nationality'. Another spear in the side of globalisation.
I've worked in the Middle East for 27 years, 13 of which were for SABIC. SABIC, along with Aramco and many other "National" companies have long upheld an ongoing effort to employ the highest number of Nationals possible. When I left SABIC, there were possibly 40 Western Expats and 2,000 non-Western Expats out of a toatal of 18,000 employees. This is of course a credit to the Saudization program and its effectiveness. In this difficult economic climate, it is only expected that Saudi Arabia would seek to protect its own people. And while there are many Saudis with a relatively poor work ethic.... there are also many who work extremely hard; I know, I've worked with many of them.