How Saudization and Vision 2030 are Developing the Kingdom's Talent Market

Saudi Arabia’s (KSA) workforce is evolving, and so are the expectations for businesses operating or considering expansion in the Kingdom. Vision 2030 sets ambitious goals for economic diversification and private sector growth, but companies face new hiring regulations, shifting workforce demographics, and increasing Saudization requirements.

Implementing Vision 2030 and Saudization policies has overhauled labour market dynamics over the past decade. These initiatives, including the Nitaqat programme, are designed to increase the participation of Saudi nationals in the private sector workforce. As these policies continue to be implemented, they create a new business operating environment, bringing both challenges and opportunities.

This blog will explore how Saudization and Vision 2030 are influencing talent development and hiring in KSA. It will examine progress towards nationalisation goals, identify persistent challenges, and offer insights into how businesses can adapt their strategies to build robust talent pipelines.

The Talent Market in KSA

Saudi Arabia possesses the strongest economy in the Arab region and the fastest-growing GDP among G-20 economies. With over 60% of the population under 30 years old, KSA is a youthful nation brimming with potential. However, the Kingdom’s private sector has relied on foreign workers for many years, with approximately 80% of jobs filled by expatriates. To overcome this, KSA introduced Vision 2030 in 2016, with a key target to decrease the unemployment rate to 7% by 2030 and reduce the reliance on expatriates. This goal has significant implications for domestic and international businesses operating in the Kingdom.

Saudization and Vision 2030

Since the launch of Vision 2030, Saudi Arabia has steadily introduced policies to diversify the economy, reduce dependence on oil, and create a more dynamic job market for Saudi nationals. At the core of this initiative is Saudization, formally implemented through the Nitaqat programme, which mandates that private companies meet minimum quotas for Saudi employees. These quotas vary by industry, company size, and sector requirements, incentivising businesses to prioritise local talent in their hiring strategies.

The programme initially targeted labour-intensive sectors like construction and retail. However, it has since expanded to include high-skill sectors such as finance, IT, and engineering. As a result, 40% of consulting positions, such as consulting specialists, project management directors, and engineers, are required to be filled by Saudi nationals. At a minimum, companies must employ at least one Saudi national.

To ensure compliance, Nitaqat classifies businesses into six categories—Platinum, Green (High, Medium, and Low), Yellow, and Red—based on their percentage of Saudi employees. Companies in the higher bands receive incentives such as greater flexibility in hiring foreign employees and streamlined administrative processes. In contrast, lower-tiered companies face restrictions on work permits, immigration sponsorships, and business renewals.

In addition to Saudization quotas, financial levies have been introduced on expatriate employees to discourage over-reliance on foreign labour. Since 2018, businesses have faced levies on every foreign worker and their dependents, significantly increasing the cost of employing non-Saudi nationals. Through this policy, the government aims to encourage more Saudi citizens into the workforce and strengthen the national economy.

Other Vision 2030 goals:

• Diversifying the economy beyond oil
• Creating a modernised legal and investment framework
• Increasing private sector activity
• Attracting foreign investment
• Increasing the participation of women in the workforce

Progress So Far: Where Does Saudi Arabia Stand?

Saudi Arabia’s Vision 2030 has initiated numerous transformative giga-projects that significantly contribute to job creation and economic diversification in the Kingdom. Projects include:

NEOM 

NEOM is one of Vision 2030’s mega-city projects, designed to ‘reimagine urbanism’ through sustainable and innovative infrastructure developments to create a new way of living and working. Initially funded by $500bn from the Public Investment Fund (PIF) of KSA and local and international investors, the project will likely cost over $2tn upon completion. This city will host four additional subprojects: THE LINE, Oxagon, Trojena, and Sindalah. These initiatives will advance the region's capabilities, creating a community enriched by talent and diversity across 15 sectors. Current projections indicate that the workforce of the NEOM project will exceed 200,000 by 2025 during its peak development phase, representing a 43% increase from the current workforce level.

Qiddiya 

With over half of KSA’s population under 30, Qiddiya is a megacity project that will be the entertainment centre. This city will encompass various attractions, including entertainment venues, sports complexes, cultural landmarks, and residential neighbourhoods situated within the scenic Tuwaiq mountains. Qiddiya City is anticipated to create 325,000 jobs, focusing on attracting younger individuals through the Playmaker Training Programmes. Launched by the Qiddiya Investment Company in 2024, this programme is designed to upskill and empower Saudi Arabia's future workforce.

Alat

Alat is a PIF portfolio company that aims to transform the Kingdom’s electronic and industrial sectors by becoming the manufacturing hub for industrial solutions based on clean energy sources. With a planned $100bn investment, Atla’s services are designed to help KSA reach net-zero targets by 2060. The company will manufacture components such as AI infrastructure, smart devices, semiconductors, smart buildings, and more. By 2030, Alat aims to create 39,000 direct jobs and contribute $9.3bn to Saudi Arabia's non-oil GDP contribution. These developments require skilled technology professionals to enhance the global supply chain, specialising in next-generation infrastructure and electronics.

These examples represent only a fraction of the numerous initiatives that have significantly contributed to the advancements of Vision 2030. Current progress includes:

• Unemployment has dropped from 12.3% in 2016 to 7.1% in Q3 2024, bringing Saudi Arabia closer to its Vision 2030 target.
• Women’s participation in the workforce has more than doubled, from 17% in 2017 to 35.4% in 2024, driven by reforms that have made it easier for women to work and advance their careers.
• The Kingdom has expanded Saudization beyond traditional labour-intensive industries (e.g., construction and retail) to high-skill sectors such as finance, IT, engineering, and consulting, with local hiring quotas steadily increasing.
• The number of SMEs (small and medium enterprises) has surged, with 1.27 million new businesses registered in 2023, reflecting the Kingdom’s push for entrepreneurship and economic diversification.

(Source: Vision 2030)

However, skill gaps remain a major challenge, with 40% of Saudi business leaders citing this as a concern in PwC’s 28^th CEO Survey, particularly in technical and engineering fields where expatriate workers have historically dominated. Businesses now face the dual challenge of meeting Saudization quotas while ensuring local hires have the necessary expertise.

How KSA Businesses Can Build a Strong Saudi Talent Pipeline

To remain compliant and competitive, businesses in Saudi Arabia must adopt proactive talent development strategies that align with the labour market. Companies need to rethink how they employ, train, and retain Saudi nationals by:

1. Upskilling and training the local workforce

A significant hurdle in Saudization is the mismatch between available talent and job requirements, meaning businesses must provide targeted training programmes to upskill Saudi nationals and equip them with the necessary technical and soft skills. As projects shift away from oil, people need to acquire new skills central to the Kingdom’s renewable energy and technology economic strategy. This transformation will support Vision 2030’s projects that are expected to create thousands of job opportunities in the region. However, this transition presents challenges, mainly due to the past preference for hiring foreign nationals for specialised technical and engineering roles. Therefore, businesses should:

• Partner with government training initiatives like the Human Resources Development Fund (HRDF), which offers technical solutions, training, and employment continuity support. (Leoron)
• Develop in-house training programmes tailored to engineering, digital, and technical roles to bridge skill gaps.
• Promote digital literacy and expertise in AI, data analytics, and cybersecurity within the younger workforce, which are crucial to the Kingdom’s transformation.

2. Redefining technical solutions and retention strategies

To attract and retain talented professionals in Saudi Arabia, companies should offer competitive salaries and benefits that align with the increasing expectations of the local workforce. Job descriptions must be updated to appeal to local candidates and clearly delineate opportunities for career progression. This consideration should extend to the changing workforce demographics, ensuring businesses adhere to various regulations concerning women's employment and youth retention.

As part of Vision 2030, integrating women into the workforce is poised to be a pivotal development, particularly in the tourism, retail, and leisure sectors, which are essential for diversifying the Kingdom’s economy. Additionally, enhancing employer branding can help establish companies as desirable workplaces for Saudi talent.

3. Ensure compliance with Nitaqat system updates

Recent changes to the Nitaqat system include:

• The removal of the ‘yellow’ category, leading to stricture classification bands.
• Instant inclusion of new Saudi hires into the company’s Nitaqat rating from day one instead of the previous 26-week employment period requirement.
• Salary-based adjustments to Saudization calculations, requiring businesses to increase minimum wages for Saudi employees to meet compliance.

Graphic: Businesses must provide targeted training programmes to upskill Saudi nationals and equip them with the necessary technical and soft skills.

Partner with One of the Leading Technical Agencies in Saudi Arabia

At NES, we can help your business succeed in Saudi Arabia’s talent market. We hold platinum Nitaqat status, demonstrating our commitment to Saudization. Our in-country expertise and understanding of the legal framework enable us to provide comprehensive talent solutions, including:

• Project Consulting Services: Our project solutions allow overseas businesses to operate compliantly in KSA without a physical entity. We manage sponsorship, payroll, taxation, and immigration compliance for local hires.
• Specialised Technical Solutions: We support companies in structuring their hiring and workforce development plans to meet Nitaqat requirements. Our engineering, energy, IT, and technical expertise allows us to source and connect businesses with qualified Saudi professionals to drive Vision 2030 projects.

Get in touch with our specialist team in Saudi Arabia to learn more about how we can support you with your local workforce needs.