One of the most inconvenient parts of expanding to new regions is to hire employees. Therefore, when you begin the Saudi Arabia recruiting and hiring talent process, it is extremely important that you understand the region’s business etiquette and culture. Even if you are ready to do your employees’ recruitment process, you need to do it compliantly.
In this article, we will talk about how to hire employees in Saudi Arabia, the benefits, drawbacks, and steps to do so. Therefore, our team is here to help you navigate key employment issues and provide you with some general advice for recruiting in Saudi Arabia. Let us observe:
- What to know before you hire employees in Saudi Arabia?
- Benefits of Saudi Arabia recruiting and hiring
- Challenges of Saudi Arabia recruiting and hiring
- How can Connect Resources help you?
1. What to know before you hire employees in Saudi Arabia?
Saudi Arabia is a wishlist trip for many travelers, thanks to its windswept dunes and interesting history and culture. When you consider the country’s big workforce, massive petroleum-powered economy, and low employer taxes, it becomes an intriguing potential for international corporate expansion.
As a future business owner, you need to understand the complexities of matters like working time, leave entitlements, dismissal procedures, benefits and compensations, and other essential parts of employment as you examine the process of hiring people in Saudi Arabia. Here is what you should know before you hire employees in Saudi Arabia.
Around 10 million foreigners work in Saudi Arabia, which has a population of around 34 million. Workers from Bangladesh, Egypt, India, Yemen, Philippines, and Pakistan, arrive in the nation to find employment, occasionally competing with Saudi nationals.
Businesses moving into Saudi Arabia must be cognizant of the nation’s Saudization, or Nitaqat, initiative. Through this scheme, businesses have to choose Saudi citizens over foreign workers. It can be difficult for an overseas worker to get a fresh work visa.
Additionally, Saudi legislation encourages hiring Saudi citizens in many other circumstances and mandates it in other industries. For instance, the Ministry of Human Resources and Social Development mandates that 25% of IT and communications employment in private companies with five or more relevant positions belong to Saudi nationals.
Therefore, if you need the support of a company that provides recruitment services, you can count on us. Connect Resources is more than ready to help you in every step of the process. Trust us to keep your compliance and abide by every Saudi Arabia law.
1.2 Employment contract
According to Saudi law, employers must enter into an employment contract with each worker. Contracts may be for a certain period of time or for an indefinite amount of time, and each one must have the following terms for the hiring contract:
- Dismissal requirements.
For the most part, when an employer wants to end things with global employees, they must follow specific severance and termination procedures. Under Saudi Arabian employment legislation, probationary periods may last up to 90 days; also, they may extend it for an additional 90 days with the consent of both parties. If the relationship does not work out, a corporation might swiftly fire an employee during this time. Following that, grace periods and severance obligations take effect.
When doing hiring and recruitment, companies must know that employees on fixed-term contracts are required to provide 30 days’ notice or earn additional pay. And those on unlimited contracts are required to give 60 days’ notice or receive additional pay. For the first five years of employment, each employee is entitled to 15 days’ compensation in severance; followed by one month’s pay for every consecutive year of employment.
1.3 Payroll and taxes
Each corporation in Saudi Arabia needs to make a contribution to the social security systems there for its citizens. The General Organization for Social Insurance must receive Saudi social insurance tax from employers (GOSI). Typically, this contribution is equivalent to 10% of each employee’s total income, which includes base pay, bonuses, and commissions. Employers need to make supplementary contributions to cover any occupational risks. This amount equates to roughly 2% of each employee’s income in most cases.
It is important that companies recruiting hire a global PEO agency for payroll and other functions. With the support of global PEO companies, you can ensure that your employment outsourcing processes are in place.
1.4 Wages and working hours
In Saudi Arabia, a usual workweek is between 40 and 48 hours long, with eight-hour days five or six days a week. For any additional hours of work, employees receive overtime payment at a rate of 150% of their regular salary. Additionally, work on a Friday or a holiday means overtime pay. When you hire employees remember that Muslim workers’ workdays are from eight to six hours during the Islamic month of Ramadan.
In Saudi Arabia, compensation must consist of two parts: the base wage and supplementary housing and travel allowances. For the purposes of the Saudization program quotas, Saudi Arabian employees must receive at least 4,000 Saudi riyals a month to qualify as national employees. For the purposes of Saudization, each employee earning from 3,000 to 4,000 riyals monthly counts as half a national citizen.
1.5 Time off
Workers who have been in a business for more than 5 years must get a minimum of 30 paid vacation days. Also, employers have to provide their staff with a minimum of 21 paid holidays. However, in reality, many businesses that hire employees offer 30 annual paid holidays from the moment they start working for them; plus, people in management positions frequently get up to 40 days of vacation.
Muslim workers are also permitted to take an additional 10-day Hajj leave after 2 years of working with a company to complete their Mecca pilgrimages. Only once per 5 years with the same company are employees allowed to take this leave. Additionally, Saudi Arabian workers are entitled to a maximum of four months of yearly sick leave as long as they can show a valid medical certificate. Following is a typical breakdown of sick pay:
- During the first 30 days of an illness, employees are paid at 100% of their regular rate.
- Employees receive 75% of their regular salary for the subsequent 31 to 90 sick days.
- Staff must take these days off without pay after 91 to 120 days of illness.
Saudi Arabian workers who are expecting a child are also entitled to 10 weeks of paid maternity leave. Employees who have worked for the business for between 1 and 2 years will be paid half during their absence; while those who have been there for 2 years or more will be paid their full income during their leave. There is a three-day paternity leave cap for fathers.
When you hire employees in Saudi Arabia should also be given time off for holidays in addition to these days off. If you want to know more about these topics, hiring services may be your best option.
1.6 Anti-discrimination laws and other restrictions
Laws in Saudi Arabia forbid discrimination in the workplace and in hiring based on the following factors:
Women have always experienced much higher unemployment rates in Saudi Arabia than men do; in 2010, there were only 15.8% women employed there. The nation has made progress toward bridging this divide, though. As more jobs were available to women, female Saudis’ literacy rates increased, and more young Saudi women became employed between 2016 and 2020, the unemployment rate for women decreased by 13.9 percent. A few more employment-related restrictions were removed in Saudi Arabia in 2019 when new legislation made it possible for women to apply for passports, get a driving license, and get official documents without the consent of a male guardian.
2. Benefits of Saudi Arabia recruiting and hiring companies
Hiring an outsourcing recruitment company has a number of advantages, especially when working with our company. Firstly, by allowing us to hire your Saudi Arabian personnel, you may avoid making as many trips back and forth. You can also start working sooner. In addition, you will not need to set up a subsidiary before recruiting staff because Connect Resources will serve as the Employer of Record. We can assist you with adhering to all Saudi Arabian employment compliance rules so you may begin working quickly rather than taking a few months.
If you contact the top recruitment global services in Saudi Arabia, hiring the best personnel could appear simple to you. Recruitment companies do more than you may ever think, from acquiring international talent to providing pre-onboarding training. Let us look at how a recruitment agency might benefit your company.
2.1 Recruitment global talent
A recent development that has drawn notice as a consequence of the pandemic is the hiring of international personnel. Companies are no longer dependent on specific areas to fill their open positions. Even talented individuals are showing the courage to work for foreign companies in order to enhance their careers.
2.2 Great candidate search
An applicant might not be selected after participating in multiple interviews. It is a pretty common occurrence. Candidates struggle to understand what they need to do in such a situation in order to succeed. With the help of a recruiter, you can enhance your image and skill set to appeal to the best employers. With the correct balance of grooming, you can impress the best businesses and get a job that pays well.
2.3 Remote staff development
Recruitment outsourcing providers are continually assisting startups and small enterprises to build a remote staff base so that businesses can grow more swiftly. If you employ a remote workforce, you will invest much less money than if you employ people to work in an office. You can use the money you save toward expanding your firm.
2.4 Fast hiring process
The top recruiters and technologies are available at recruitment companies. They have skills at completing transactions quickly. Recruitment agencies can expedite the global hiring worker process and make the appropriate hires in response if a business organization needs the top skills in a matter of weeks.
3. Challenges of Saudi Arabia recruiting and hiring
The challenges that can appear when you hire employees in Saudi Arabia are:
3.1 Lack of good applicants
Companies must meet Saudi Arabia’s requirements for Saudization, the first of which is finding the right mix of expatriates and locals. Salaries have increased as a result of the high demand for Saudi nationals. One way to describe the Saudi labor market is as being very dependent on foreign labor.
The demand for skilled resources in the telecommunications and IT sectors in Saudi Arabia exceeds the supply. Other difficulties can include the fact that resources are frequently required throughout a project’s lifespan, which does not offer the long-term stability that many Saudis desire.
3.2 Long time for recruitment hiring
In Saudi Arabia, the hiring procedure might take a very long time, especially when hiring foreign labor. With the implementation of the Saudization regulations, hiring international resources already present in Saudi is expected to be quicker and easier than in the past, when it was highly dependent on employers’ consent.
However, when you hire recruitment outsourcing companies for this process, you can forget about any challenge. With our professional recruitment outsourcing services, you can hire employees with the skills and experience you need in no time.
4. How can Connect Resources help you?
Connect Resources is your best option for outsourcing hiring and other HR services, including:
- IT outsourcing.
- Employment visa outsourcing.
- HR consultancy.
- Executive search.
- Payroll outsourcing.
- UAE property visa services and more.
Do you want to hire employees with our Saudi Arabia recruiting and hiring solutions? If so, you can send us an email at email@example.com or call us at +971 43 316 688. We will do our best to give you a great service.