Saudization, also known as the Nitaqat program, is a transformative initiative by the Saudi government aimed at boosting employment rates among Saudi nationals within the private sector. This policy, introduced to reduce unemployment among native Saudis, requires companies to meet specific quotas of Saudi employees. The ultimate goal is to foster economic stability and progressive development by ensuring that local talents play a significant role in shaping Saudi Arabia’s future.
Despite the ambitious Saudi Vision 2030, which aims to diversify the economy and reduce dependence on oil, Saudi Arabia faces a significant skills gap. The traditional education system often fails to align with the labor market’s evolving demands, particularly in sectors like technology, manufacturing, and services. This gap necessitates innovative training solutions to equip the local workforce with the necessary skills. And France, renowned for its excellence in terms of education, can support the Kingdom with that.
Understanding Saudization
The concept of building a pool of Saudi labor is not recent, although it did not become a priority until the late 1990s. Starting in the 1970s, the Saudi government initiated a series of five-year development plans. In its first Five-Year Development Plan (1970-75), it decreed that 75% of workers should be Saudis and 51% of total salaries paid should be to Saudi workers in all businesses as a target to be met by the end of the plan.
However, the decree was not enforced at that time because almost all Saudis were interested in working only for the public sector, which absorbed the national workforce for the next two decades. Compared to the majority of private sector employees, those in the public sector enjoyed higher salaries, greater job security, shorter working hours, and more generous holidays. This resulted in the creation of a privileged workforce of local nationals in the public sector and less desire for Saudi nationals to work in the more challenging private sector.
The Seventh Development Plan (2000-2005) set a more feasible quota of a 25% Saudization rate in the private sector by 2002, which was later increased to 30% in the Eighth Development Plan (2006-2010). However, these quotas were not achieved, and Saudis’ employment share in the private sector had reached only 10.4% by 2010.
Finally, the Nitaqat Program was launched in 2011. To support it, the government announced in 2012 a move to make private companies pay Saudi workers as much as their state-employed counterparts to encourage more Saudis to take up employment in the private sector. Yet, by 2014, Saudis still made up only 22.1% of the private sector workforce, which led the Nitaqat to mandate that private sector companies hire a minimum of 30% Saudi nationals, in compliance with the goal of the National Transformation Program 2020 to generate over 450,000 jobs in the non-government sector by 2030.
This acceleration of the Saudization of employment in the private sector came in response to two simultaneous yet opposite challenges faced by the Kingdom: the necessity to provide jobs to young Saudi nationals entering the market (60% of the population is under 30 years old) and the need for high-level technical expertise to support the diversification of the economy, which still relies on foreign workers due to a skills gap in the local workforce.
This situation presents both opportunities and challenges for businesses. While it promotes socio-economic development and job opportunities for the local Saudi population, it also comes at a cost for companies in the private sector. Both Saudi and international companies often struggle to find local talent with the required technical skills, leading to higher recruitment costs to meet Saudization quotas. The salary expectations for Saudi nationals further exacerbate these challenges.
The Skills Gap in Saudi Arabia
The Saudi labour market is currently experiencing a skills gap, particularly in areas requiring digital proficiency and advanced technical skills. The most critical needs are observed in programming, graphic design, advanced manufacturing, information technology, and engineering.
These gaps are particularly pronounced in industries undergoing rapid technological advancements and those pivotal to the country’s economic diversification efforts, such as renewable energy, tourism, and healthcare.
They can be explained by the fact that the Saudi education system has traditionally prioritized degree-level education over vocational training. This focus has led to a surplus of graduates with theoretical knowledge but insufficient practical skills.
French Training Models: A Solution
France counts some of the best schools in the world, renowned for the excellence of the technical expertise that they provide to French and foreign students.
Now, the Saudi government has implemented a comprehensive scholarship program to send Saudi students abroad for higher education and specialized training. It aims to send 70,000 Saudi students to 200 approved foreign institutions by 2030. Students are streamed into four paths:
– Pioneers Path: For bachelor’s and master’s programs at the world’s top 30 institutions.
– Providers Path: For programs directly linked to labor market needs.
– Research & Development Path: Aimed at PhD-level students to produce scientists.
– Promising Path: For specific fields like manufacturing and tourism.
This initiative, known as the Custodian of the Two Holy Mosques Scholarship Program, could increase the number of Saudi students sent to French schools to facilitate the transfer of skills and technology. Still, while necessary and useful, this would not succeed in closing the skills gap, considering that only about 6% of the total number of Saudi students in higher education currently study abroad. Local initiatives need to be implemented to train the remaining 94%, to ensure that they acquire the necessary technical skills to achieve the objectives of the Saudi Vision 2030.
This is where France’s experience and expertise of France in vocational and continuing education can come in handy. Indeed, the French vocational education and training (VET) system is renowned for its structured approach to skill development. It encompasses initial education, apprenticeships, and continuing education, ensuring lifelong learning and skill advancement. Access to initial vocational training in France is open to all, regardless of age or current employment status. Initial vocational education typically begins after lower secondary education, around age 15, with students enrolling in vocational high schools (lycées professionnels) or apprenticeship training centers (CFA – Centres de Formation d’Apprentis).
The system offers a wide range of training programs, including:
– Certificat d’Aptitude Professionnelle (CAP): A vocational training certificate obtained after two years of study, covering over 200 specialties in artisanal trades, production, and services.
– Baccalauréat Professionnel (Bac Pro): A vocational baccalaureate obtained after three years of study, offering specializations in sectors such as commerce, services, catering, maintenance, accounting, construction, agriculture, and fashion.
– Brevet de Technicien Supérieur (BTS): A higher vocational training certificate obtained after two years of post-secondary study, available in 88 specialty fields.
– Diplôme Universitaire de Technologie (DUT): A two-year post-secondary diploma similar to BTS, focusing on technical and technological fields.
This system places a strong emphasis on practical experience. Students often participate in internships and apprenticeships, which are integral parts of their training programs. These opportunities are facilitated through partnerships with businesses and industry associations, ensuring that students gain relevant work experience and are well-prepared for the job market. The VET system in France maintains close ties with the business community. Companies are involved in designing curricula, providing apprenticeship positions, and participating in examination panels. This collaboration ensures that the training programs are aligned with industry needs and that students acquire skills that are in demand.
The French government also plays a significant role in supporting vocational training. It provides funding for training programs, offers tax incentives to companies that hire apprentices, and implements policies to promote lifelong learning. The Ministry of Labour and the Ministry of National Education oversee the VET system, ensuring its quality and relevance.
Continuing education is also a key component of the French VET system. Programs are available for adults looking to upskill or change careers, with options such as evening classes, weekend courses, and online learning. The government also supports initiatives like the Personal Training Account (Compte Personnel de Formation, CPF), which allows individuals to accumulate training credits throughout their careers. In complement to this, the Validation des Acquis de l’Expérience (VAE) allows individuals to obtain vocational qualifications based on their work experience. This process recognizes the skills and knowledge gained through professional activities, making it easier for workers to advance in their careers without returning to full-time education.
Implementing French Models in Saudi Arabia
Implementing French training models in Saudi Arabia would require adaptation to local cultural, economic, and regulatory contexts. This includes aligning training programs with the specific needs of the Saudi labor market and ensuring that they are culturally appropriate. Partnerships could be implemented, with the support of French and Saudi institutions and businesses, to develop these training programs in Saudi Arabia effectively, as has been done in other countries.
One success story, which could serve as an example, is that of the training center for the aeronautical sector created by the UIMM (Union des Industries et des Métiers de la Métallurgie, France) in Morocco through its International Cooperation Agency, CODIFOR, in partnership with GIMAS (the Moroccan aeronautical and space industries consortium), which trains around 1,300 professionals annually.
Similar initiatives and bilateral partnerships in the education sector could be implemented in Saudi Arabia to support the localization of production in the manufacturing industry, or the long-term transfer of competence and skills in booming sectors like hospitality and tourism, logistics, energy, IT and digital, agriculture, and more. Training a large number of students in centers localized all around Saudi Arabia could even be facilitated thanks to new digital technologies in virtual reality (VR) and augmented reality (AR) developed by French companies like iOasis. These technologies would allow Saudi students and employees of companies to quickly develop their skills anywhere, online, through courses dispensed in Arabic and realistic 3D scenarios, allowing them to practice safely in life-like situations.
In conclusion, the French VET system offers a comprehensive and flexible framework adapted to the modern labour market, which could be duplicated in Saudi Arabia to quickly help the Kingdom close its skills gap and reach the objectives set by the Saudi Vision 2030.
For more information on the Saudi market and the opportunities that it offers, Contact Artemis Business Care.