Salaries of Saudis working in private sector set to rise: Jadwa

Salaries for Saudi nationals working in the private sector are expected to rise in the medium term, Jadwa Investment said in a report on Monday. 

The hike in wages will be supported by pick up in the pace of growth in the private sector, driven by higher budgeted government spending and various stimulus plans.

In addition, higher employment of Saudis in the retail sector following the recent Saudization drive and Ministry of Labor and Social Development (MLSD) initiatives will also contribute in pushing the average wage up in the medium term, the report added.

According to the consultancy, four sectors saw an increase in the number of Saudi workers during Q3 2018, reversing the trend seen in the previous quarter.

Social services hired 18,000 Saudis, mining and quarrying hired 1,100, while financial services and post and communication together hired around 300 Saudis.

During H1 2018, these sectors saw a rise in GDP growth rate, with, social services and mining and quarrying rising by 4.8 and 4.4 percent consecutively, year-on-year.

Jadwa Investment expects the trade sector to see a gradual rise in employment of Saudis, following MLSD measures and recently launched the National Industrial Development and Logistics Program.

The report also warned of “more departures” of foreign workers in the retail sector, especially as private sector companies comply with the new Saudization measures.

"We see the recently approved scheme to help private sector companies with expat fees as an incentive to hire more Saudis.

“While the scheme prioritizes reimbursements for companies in the green and platinum Nitaqat categories, it also gives the remaining companies the opportunity to correct their status to qualify for retrospective reimbursement of expat fees," the report noted.