Saudi private sector must employ 4.1m citizens by 2030

Saudi Arabia’s Vision 2030 seeks to employ millions of Saudi nationals in an expanding private sector. Research by Oxford Strategic Consulting (Oxford) found that to accomplish this goal, the private sector will need to employ 2.5 million more Saudis than are currently employed in the sector. Developing world-class HR can facilitate this massive human capital influx into the private sector and ensure that nationals are placed in suitable, sustainable roles. Moreover, Oxford research indicates that better HR alone can contribute $6.44 billion to GDP.

KSA private sector needs to employ 4.1 million Saudi nationals by 2030. Saudi currently has a national labor force of around 6.4 million people, with 4.2 million in the public sector, 1.6 million in the private sector and 0.6 million unemployed. By 2030 the Kingdom will tout a labor force of around 8 million people and aims to employ 3.4 million of these Saudis in the public sector, while around 0.57 million are expected to be unemployed. This means the private sector needs to employ 4.1 million nationals – a rise of 2.5 million compared with current levels. Most of the projected 8 million workers have not even entered the labor force yet. Consequently, this offers an opportunity for education and training providers.

The military industry to play a key role. Vision 2030 states that half of the country’s military needs will be manufactured in the country and that Saudi companies will be supported to develop into new global leaders. Saudi currently spends around $56 billion on the military industry, but only $1 billion is spent in Saudi. Oxford estimates that around 190,000 people are employed to meet Saudi’s military needs; however, only 4,000 are Saudis.

Under the vision, the military expenditure within Saudi Arabia will increase to $28.5 billion and national employment will rise to 95,000 Saudis. To attract, train and develop 95,000 experts in military manufacturing sounds like a major task. On the other hand, Saudi’s entire military manufacturing capability only needs to be as big as a major global companies, such as BAE Systems.

Oxford’s recommendation:

• HR in Saudi Arabia should be an accredited profession, and anyone working in HR should be accredited by a globally-recognized awarding body.

• There should be a Saudi-specific professional body for HR that is supported by government.

• Simplify and automate certain aspects of HR practice with easy to use apps and other technological assistance.

Investing in better HR can yield billions for Saudi Arabia. Oxford’s ‘HRM in the GCC’ research report with Aramco found that effective HR could add $14 billion per year to the GDP of the GCC. In 2013 and 2014, Saudi Arabia contributed 46% and 44% respectively to the GDP of the GCC, according to World Bank statistics and Oxford’s in-house research. Therefore, better HR has the potential to generate $6.44 billion in GDP for Saudi Arabia.

Increasing private sector employment in Saudi Arabia represents a major challenge of the Vision 2030. More effective HR can ensure that the country meets this human capital goal while also contributing billions of dollars to GDP. It is time that HR takes the driver’s seat on the journey to 2030.