Saudi to subsidise companies for employing citizens

Saudi Arabia’s Ministry of Labour and Social Development has announced plans to compensate companies for giving jobs to citizens and to allow them to employ Saudi workers on a part time basis.

Under the plans, the kingdom will “reduce the cost of localisation of employment opportunities for enterprises” by providing a proportion of social insurance contributions, according to Saudi Press Agency.

The subsidy will be paid “optionally” on behalf of employers on a monthly basis for two years.

A new partial work programme also aims to encourage private sector firms to employ citizens part time to reduce costs, while others are intended to support working women by providing childcare options to increase their participation in the labour market and to provide social insurance to freelancers and entrepreneurs.

The announcement comes following concerns that the unemployment rate among Saudi citizens has increased to 12.8 per cent this year amid a wider downturn in the economy.

The kingdom told the IMF it was reconsidering the speed of its austerity measures to avoid pushing up unemployment further.

Read: Saudi reconsiders speed of austerity plan as economy slumps