Saudi firms are reducing the large salary bonuses that used to attract foreign talent in sectors like construction and manufacturing as the kingdom adjusts its spending and economic aims, according to four recruiters interviewed by Reuters. Saudi Arabia, the leading exporter of oil, is making progress with its Vision 2030 plan, which focuses on decreasing reliance on oil revenues, generating jobs, and diversifying into industries like tourism, real estate, mining, and finance.
The nation has invested heavily in large-scale projects that increase the need for skilled foreign workers, but there have been challenges with project delivery and timelines. Foreign workers can no longer expect to negotiate high salary premiums, which could reach 40% or more, as offers are now much more modest. Recruiters note that the changes are partly due to the kingdom’s economic adjustments and an increase in available candidates eager to work in the region.
The shift in pay reflects a broader change by Saudi Arabia’s Public Investment Fund, which previously backed major infrastructure projects but is now leaning towards sectors like artificial intelligence, logistics, and mining for better returns. Projects like NEOM, a planned futuristic city, and the Trojena tourism hub, which will host the 2029 Asian Winter Games, face delays due to the current economic strategy.
With decreasing oil prices affecting public finances, the government’s budget continues to struggle, necessitating oil prices around $100 for balance, according to the IMF. Recruitment has slowed, and companies are now more cautious in salary negotiations, shifting their focus towards high-demand jobs in technology sectors.
In contrast to Saudi Arabia, the UAE remains a preferred choice for many skilled workers due to its tax-free salaries, established facilities like schools and healthcare, and social reforms for a more liberal lifestyle. This has made it challenging for Saudi Arabia to compete; salary differences between the two regions are minimal now. The Saudi government is pushing for labor market reforms to increase private sector jobs for citizens, which has led to record low unemployment rates among Saudi nationals. To attract top talent, companies need to offer competitive packages that account for living costs, work-life balance, and a clear project vision.
With information from Reuters