Saudi unemployment rate drops as over 1 million expats leave

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The unemployment rate among Saudi nationals, especially women, continues to decline, as the latest data from the Saudi General Authority for Statistics (GASTAT) also showed that over a million expats left the kingdom during the pandemic.

The population at the mid-year point in 2021 was 34.1 million, a 2.6 percent year-on-year decrease.

Foreign workers and their families account for roughly a third of those living in the country. 

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In mid-2021 there were 12.42 million non-Saudis living there, down from 13.58 the year before, meaning 1.16 million expatriate workers and their families left during the height of the pandemic.

“While the natural reproduction (births minus deaths) was positive for both Saudis and non-Saudis in 2021, the decline in the overall population is mainly related to non-Saudi males (10.6 percent decline compared to 2020) leaving the kingdom during the Covid-19 pandemic,” the GASTAT report said this week.

The exodus of foreign workers comes as estimates from GASTAT’s latest Labor Force Survey, also released this week, found that the unemployment rate among Saudi nationals was 10.1 percent in the first quarter of 2022, down from 11.7 during the same period a year ago.

A big factor has been the increasing number of women in the workforce.

During the first quarter of 2019, 20.5 percent of Saudi women were employed, but this rose to 33.6 percent during the first quarter of 2022.

When it comes to finding work, the survey found that 93.1 percent of unemployed Saudi nationals said they would accept a job in the private sector. However, 61 percent of males and 46.9 percent of females said they would not accept a job if it involved commuting for more than an hour.

A study in March by recruitment company Hays found a high degree of optimism in the Saudi market. From over 800 companies asked, 79 percent of respondents said they were planning to increase headcount in the next 12 months. 

“When it comes to pay, further good news for working professionals in Saudi Arabia is that a significant 72 percent of employers expect salaries in their organisation to increase in 2022 (compared to 46 percent that offered an increase in 2021),” Aaron Fletcher, business manager for Saudi Arabia at Hays, said.

Fletcher added that the average salary increase experienced by workers in Saudi Arabia last year was by up to five percent and the survey found that employers are predicting the same again this year.

The Gulf Employment Creation Index, compiled by recruitment consultancy firm Cooper Fitch, also found there had been “a significant increase in the employment and jobs market in the Gulf over the first six months of 2021 and it predicted it would grow by 6.4 percent from pre-Covid levels.

Trefor Murphy, CEO of Cooper Fitch, said he believed there had been “an increase in recruitment activity in certain niche employment markets in the kingdom, with new technologies leading the way such as AI [artificial intelligence], IoT [Internet of Things], digital, blockchain, cloud and cyber”.

The recruitment drive is all part of the Saudi government’s Vision 2030 strategy to diversify the kingdom’s economy away from hydrocarbons.

It has created over half a million new jobs in the last four years. Part of this has been achieved through its Saudization policies.

Last year around 20 sectors were highlighted for focus as part of this policy, including roles in the food and beverage industry, grocery stores and supermarkets, malls, real estate, private education, physiotherapy professions, driving schools and the technical and engineering professions.