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Sat 5 Mar 2016 01:01 AM

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Saudi Arabia's labour force grows at slowest pace since 1999

New report also says that Saudization rates within the private sector fell for the first time since 2011 last year

Saudi Arabia's labour force grows at slowest pace since 1999

Saudi Arabia's labour force grew by 46,000 during 2015, its slowest pace since records began in 1999, according to a new report.

Jadwa Investment’s latest update on the labour market in Saudi Arabia also showed that Saudization rates within the private sector fell for the first time since 2011.

The report also said the unemployment rate fell slightly from 11.7 percent in 2014 to 11.5 percent in 2015.

During 2015, total net employment in the Gulf kingdom saw a rise of 417,000, compared with 339,000 in 2014 but of these positions, 368,000 (or 88 percent) went to non-Saudis, the report said.

Jadwa said private sector net employment of Saudis fell for the first time since labour market reforms began in 2011, with nearly all sectors within the private economy seeing negative changes to their Saudization rates.

Public sector net employment of Saudis rose by 93,000, compared to a 103,000 rise in 2014, the report said, adding that the Saudi female unemployment rate rose to 33.8 percent in 2015 despite a fall in their participation rates.

Jadwa said: "The slowing growth in the labour force was associated with a decline in the participation rate, which fell for the first time since 2009 (from 41.2 percent in 2014 to 40.2 percent in 2015).

"The decline in the participation rate also means that the rise in the number of working age Saudis outside the labour force had been faster than growth in the Saudi labour force. In fact, the number of Saudis outside the labour force rose by 85,000 in 2015, with most of the increase coming from younger age groups." 

The report added that during 2015, the overall picture of the labour market in Saudi Arabia continued to point to an expanding economy, as total net employment rose but the majority of new jobs went to non-Saudis.

Jadwa also said the slowdown in public sector hiring in 2015 could also be due to the narrowing differentials in work hours between the private and public sectors, which renders public sector jobs less attractive than before.

"We think the implementation of the newly announced King Salman Program for public sector worker efficiency will contribute in improving worker productivity in the public sector, particularly since the program emphasizes on the need to reward public sector employees on a merit-based system, rather than the traditional automatic promotions and pay rises based on the length of period served," the Jadwa report said.

It added: "We also believe that implementation of the program will potentially include an increase public sector work hours and a more selective employment process."

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