The Saudi Council of Ministers approved an ambitious new vision for the Kingdom of Saudi Arabia. The Saudi Vision 2030 is built on three themes as follows:
The human capital development will play a major role in the Saudi Vision 2030. The Saudi labor force will reach an estimate of 8.6 million by 2030 with a 44% participation rate. An average of 203 thousand jobs will need to be created each year for Saudis entering the labor market. The Saudi Vision 2030 seeks to reduce the overall unemployment rate from 11.6% to 7%, overhaul the education system and increase the female participation rate from 22% of the labor force to 30%.
What are the challenges?
Reform in those areas will prove to be a key factor in whether Saudi Arabia can achieve its long-term economic goals. Education is the starting point. While Saudi Arabia has consistently invested in its education system, money does not necessarily buy quality. Critical and innovative thinking, as well as societal expectations for individuals to work hard in return for their grades and wages, are not yet widely taught in schools or universities.
In addition, Saudi Arabia’s education system relies overwhelmingly on teachers from other Arab countries whose training reflects educational values of their countries during the 1970's and 1980's.
Human resource management in the private sector is another variable. And it’s a variable that is new and largely unknown in Saudi Arabia’s job markets, where seniority is typically a function of age, longevity of service, and other sources of influence, particularly in the public sector, where most Saudis work. Once in a managerial position, individuals often cannot be criticized or even advised, which is a problem particularly in institutions where young employees are increasingly more qualified than their managers.
Today many Saudi women are highly trained and motivated more than many men, one could argue but their access remains constrained by the rigid division of genders.
This division entails major costs for institutions, from separate educational and training institutions to separate offices and entrance halls. That not only affects which jobs women would be able to do, obviously, but it also takes valuable attention away from topics like labor laws, ways of creating vibrant work spaces, and policies for getting more out of Saudi Arabia’s bright youth.
Over 50% of Saudis are under the age of 25, having grown up during a period of perceived plenty, the windfall of the 2000’s, when rising world oil prices provided record revenue year after another.
Raised between the materialism of local youth culture and the expectations of entitlement passed down by previous generations of Saudis who benefited from their country’s oil wealth, this young generation has high expectations. To meet them, they will need jobs, ideally high-paying ones, since blue-collar jobs are socially inferior to white-collar office jobs. Labor-intensive sectors in Saudi Arabia, such as construction, manufacturing, and hospitality services, are almost exclusively staffed with foreigners.
Although the current time of tighter government budgets, after two years of lower oil prices, is what has created the urgency for change, it may well hinder the change itself. The public sector faces all the talent challenges faced by the private sector.
Disclaimer: The views set out in this article do not constitute legal advice and readers are urged to seek specific advice in relation to any particular issues from this article.