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Saudi job market to shrink in 2018

Saudi job market to shrink in 2018

GulfTalent said Saudisation policies meant many firms in the country were lowering their headcount

The Saudi job market is expected to shrink this year due to a government drive to replace foreign workers with citizens, according to a study by job site GulfTalent.

The company said its survey of more than 1,117 CEOs and executive managers in the six-nation Gulf Cooperation Council showed an upturn in business confidence after oil prices rose from the $30-50 range to above $60 in the last six months.

However, not all of the Gulf countries were found to be seeing a positive impact on employment despite expectations the overall job market will grow at an average rate of 9 per cent in 2018.

GulfTalent said the Saudi job market was shrinking this year, with a net 2 per cent of firms reporting a reduction in headcount due to the government’s enforcement of “stringent Saudisation policies”.

“While the [Saudisation] policy has boosted employment opportunities for Saudis, some firms are seeking to achieve mandatory Saudisation ratios by simply reducing their expatriate workers. Overall, more expats are leaving the job market than the Saudis being hired,” the firm said.

The kingdom has barred companies from employing foreigners in some roles including most recently at car rental offices and in 12 retail areas.

Read: Saudi says foreign worker ban won’t apply to all car rental jobs

Bank of America Merrill Lynch (BofAML) said in a report last month that the latter could mean tens of thousands of expats lose their jobs by September.

The GulfTalent survey found job growth was similarly weak in Oman, at a net 2 per cent, due to the country’s limited oil reserves and strict Omanisation policies including a six-month ban on hiring foreign workers in 10 sectors introduced in January.

Read: Oman bans hiring of foreigners in 10 sectors

Other regional countries were found to be more promising for job seekers, with 18 per cent of firms increasing headcount in Kuwait and 13 per cent in the UAE.

GulfTalent said the recovery in oil prices was creating jobs in Kuwait and Abu Dhabi, while preparations for Expo 2020 also meant there were opportunities in Dubai.

By sector, the oil and gas sector was expected to witness the most drastic increase in headcount this year after downsizing over the last three years.

A net 39 per cent of oil and gas firms in the region said they were expanding their workforce compared to relatively weak growth in the construction and fast moving consumer goods industries linked to payment delays and the introduction of value added tax.

GulfTalent said the latter meant there was an upsurge in demand for finance professionals, with human resources and marketing staff also in demand.

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