Domestic labor quota update to lower costs, balance market: Al Mawarid CEO

Riyad Al-Ramizan, CEO of Al Mawarid Manpower Co.

Riyad Al-Ramizan, CEO of Al Mawarid Manpower Company, said that the Ministry of Human Resources and Social Developments’ decision to revise the standards for domestic workers will reduce operating costs, as companies will no longer have to bring in large numbers of workers without sufficient demand. He also explained that companies’ commitment to providing workers according to supply and demand levels will improve operation rates.

In an interview with Argaam, the top executive added that the decision represents a fundamental step towards achieving a balance between supply and demand in the market.
 

The previous ratio required companies to allocate 30% of the total workforce as domestic workers, which means 3,000 domestic workers for every 10,000 workers, said Al-Ramizan, adding that the new decision gives large companies the flexibility to expand the domestic workforce base beyond 10,000-15,000 workers, and provides small companies with an opportunity to grow without being bound by specific ratios.

The company was previously forced to bring in large numbers of support and domestic workers to meet the growth requirements in other business-related sectors, even if there was no actual demand for support workers, which led to increased financial burdens, said the CEO.

He added that this change will contribute to improving employment rates in a sustainable manner, which supports profitability, as it will become more linked to actual market demand.

Al-Ramizan also expected that there will be no direct impact on the prices of services provided to citizens, but it will raise the operational efficiency of companies and reduce the costs of recruiting workers for human resources companies.

The company’s total number of support workers exceeds 15,000 workers, which makes it among the category that does not need to increase the number of domestic workers, said the CEO, noting that Al Mawarid is constantly monitoring market developments to fill any gaps that may arise.

He expected that increasing employment rates will contribute boost profitability and reduce operating costs, adding that the number of workers in the business sector in the Kingdom exceeds 8 million, which opens up wider opportunities for growth.

Al-Ramizan also indicated that the company's small market share previously forced it to bring in large numbers of domestic workers, which burdened it with operating costs and affected the balance of supply and demand.

He expected the fourth quarter of the year will witness distinctive profits, pointing to the remarkable growth in various sectors within the Saudi economy.

This growth is directly reflected in the company's performance, as it provides its services to major sectors such as the medica, retail, and the construction sectors, all of which are witnessing growth. This growth will be seen by investors in the company's future results.