Saudi Arabia is witnessing a labour market transformation that is lowering its dependency on oil and generating jobs in green energy, construction, and other industries, from cutting-edge technology to thriving tourism.
The Saudi Nationalisation Scheme and the Nitaqat initiative are two examples of government programmes that have significantly influenced the nature of the labour market.
These policies have significantly lowered unemployment rates by incentivising private sector employers to hire more Kingdom citizens in a variety of industries.
While a strategic focus on creating a knowledge-based economy resulted in higher investments in education and vocational training programmes, the dedication to increasing workforce participation has also helped to create a more inclusive job market.
These programmes are further increasing employment growth by giving the local workforce the skills they need to succeed in industries like advanced manufacturing, healthcare, and financial services.
Construction boom fuels job creation
According to Kamco Invest’s GCC Projects Market Update, the construction and infrastructure industry has grown rapidly in recent years, supporting the Kingdom’s economic expansion. In 2024, contract awards reached a record high of $146.8 billion, surpassing the previous year’s $118.7 billion.
More than 53.8% of all project awards in the Gulf Cooperation Council in 2024 went to Saudi Arabia, the report stated.
This boom is creating more opportunities for architects, designers, project managers, and many other construction professionals, according to Sachin Kerur, managing partner of Reed Smith’s Middle East division, who spoke to Arab News.
“Anyone studying Vision 2030 or visiting the important cities of the Kingdom will be very aware of the construction of large-scale housing, rail and road networks, new airports, infrastructure for major sporting events, and industrial production plants,” Kerur said.
Tourism-related construction has also seen a surge, with new hotels and resorts hiring more Saudi nationals.
“Anyone visiting the Kingdom’s hotels of late will have noticed the number of Saudi nationals employed,” Kerur added.
Rua Al-Madinah and Qiddiya are two major projects that are increasing the need for skilled workers in the industry.
Tourism and tech sectors
As the Kingdom works toward its goal of drawing 150 million tourists a year by 2030, the tourism industry will continue to expand and play a significant role in forming Saudi Arabia’s labour market. Jobs in the hospitality, transportation, and cultural services sectors are therefore in high demand.
“With millions of visitors anticipated to visit Saudi Arabia each year, tourism has one of the fastest-growing and elastic demands for employment,” Kerur said.
The growth of the industry is giving Saudis thousands of new jobs, from entertainment-driven projects like the Red Sea Project to religious tourism initiatives in Makkah and Madinah. Technology and green energy sectors have also seen expansion.
The government’s investments and incentives for international tech companies are driving the Saudi Arabian technology sector’s record-breaking growth.
“Foreign investments are driving significant job creation in Saudi Arabia’s emerging industries, particularly technology and innovation, aligning with Vision 2030’s goals of economic diversification and private sector growth,” Faisal Al-Sarraj, Saudi Arabia’s deputy country senior partner at PwC Middle East, said.
“PIF’s focus on technology and innovation has bolstered local employment, particularly in AI, digital transformation, and data analytics. Its support for startups and partnerships with global tech firms is strengthening local expertise,” he continued.
Projects like NEOM, a smart city initiative, and Project Transcendence, a $100 billion AI and data analytics initiative, are encouraging high-skilled employment in cutting-edge fields.
“This $100 billion plan positions Saudi Arabia as a global AI and data analytics hub, creating thousands of high-skilled jobs and rivalling regional tech leaders,” citing media outlets Bloomberg and CIO, Al-Sarraj said.
Saudi Arabia is also seeing a boom in the green energy industry, which is helping the Kingdom achieve its sustainability objectives and creating a new wave of job opportunities. Solar and wind farms are being built across the country, creating thousands of new jobs and giving residents the chance to learn more about clean energy. The food and life sciences sectors have also experienced job growth, according to Kerur.
Saudi Arabia welcomes the world
The government’s Saudization efforts, especially the Nitaqat programme, launched in June 2011, have been instrumental in boosting the proportion of citizens working in the private sector.
“Many commentators regard Saudization as having been most successful in the retail, tourism and hospitality sectors. Perhaps less success has been achieved in areas such as life sciences, medicine, and design and construction, where more skilled resources are needed. That is certainly an area of development for the next few years,” Kerur said.
Additionally, the growing emphasis on encouraging female participation in the labour market reflects the push for greater workforce inclusion. Women are taking on roles across several industries as more flexible and remote work arrangements become available, supporting the Kingdom’s larger economic transformation objectives.
According to data published by the General Authority for Statistics, the labour force participation rate of Saudi women was 36.2% at the end of the third quarter of 2024. This was significantly higher than the initial Vision 2030 target of 30%, which has since been raised to 40% by the end of the decade.
“Saudi Arabia’s labour market reforms and initiatives are successfully reducing unemployment levels, and so much credit must go to Vision 2030 as economic diversification develops at pace. However, this is not merely labour economics,” Kerur said.
“As with other GCC countries like the UAE, there are social and cultural norms that have to be assessed to ensure they are maintained whilst, at the same time, ensuring unemployment is minimised and the national workforce is equipped for the challenges of the next three decades,” he noted.
Regional headquarters initiative
The success of the Kingdom’s regional headquarters initiative, which attracted over 540 multinational corporations to establish offices, was one of Saudi Arabia’s greatest achievements in 2024. The goal of this increase in corporate presence is not just to boost numbers, but to make Saudi Arabia a thriving business hub that is teeming with fresh ideas and opportunities. Due to the relocation of regional headquarters by companies like Amazon, Google, PwC, and Deloitte, jobs in professional services, consulting, and administrative roles have been created.
“This achievement is having an employment impetus as more and more companies are employing Saudi nationals in line with the Kingdom’s status as a developing business hub,” Kerur said.
In addition to creating job opportunities, the Kingdom’s efforts to draw in foreign investment have promoted knowledge transfer and skill development among the local workforce.
Saudi nationals are gaining priceless exposure to global business operations thanks to multinational corporations’ contribution of global best practices and expertise, which puts them in a competitive position on the job market.
The Golden Visa, which permits foreign nationals to live, work, and own property in the Kingdom without a sponsor, was another important initiative. To be eligible, applicants must fulfil certain requirements, such as making sizable real estate or business investments.
According to Al-Sarraj, the visa has increased employment in industries like healthcare, education, and technology and promoted a knowledge-based economy by “incentivising” highly qualified professionals and entrepreneurs to move to Saudi Arabia.
“Reforms like the Labour Reform Initiative improved mobility and flexibility for expatriates, making Saudi Arabia a more attractive job market. This policy also encouraged Saudization, driving the hiring of skilled nationals,” he said.
The road ahead
Even with the advancements, there are still obstacles in closing skill gaps and making skilled trades or manual labour a feasible career choice for Saudis.
“Education and training will be vital all around for the labour market. Indeed, more labour capacity is required to implement Vision 2030 projects, and this provides Saudi nationals a significant opportunity to develop blue-collar skills. Of course, the private sector, both national and international, will have a key role to play in training, developing, and employing nationals. The issue will be the stick or the carrot,” Kerur said.
Kerur added that the Saudi private sector will require support, particularly in areas that demand significant financial investment and where current capacity to operate or expand is limited.
“Saudi Arabia has shown a willingness to enable public-private partnership in their labour market, and more will be expected in this regard,” he said.
According to Al-Sarraj, one of the main challenges is that many employees lack the credentials employers require or the necessary training.
“Despite significant progress, challenges remain, including skill gaps among the workforce, the need for enhanced educational and vocational training programmes, and ensuring sustainable employment opportunities for the growing local population. Employers often cite skill gaps and higher wage expectations as reasons for not hiring Saudis, highlighting the need for enhanced educational and vocational training programmes,” Al-Sarraj added.
Foreign investment, workforce development initiatives, and strategic government initiatives will all play a crucial role in maintaining momentum as Saudi Arabia’s labour market continues to change.
With major accomplishments in 2023 setting the stage, the Kingdom is in a strong position to meet its ambitious Vision 2030 goals and develop a vibrant, diverse workforce that can keep up with the demands of the economy.
Meanwhile, according to early government data released on Sunday, Saudi Arabia’s economy expanded 11.3% year over year in the fourth quarter of 2024, helped by a rise in non-oil and government operations.
According to data released by the General Authority for Statistics, non-oil growth increased by 4 percentage points, government activities increased by 2 percentage points, and oil activities decreased by 4 percentage points.
Ongoing pressure from low oil prices on government revenue is expected to keep growth in the Kingdom, the world’s largest oil exporter, modest this year.
To support the market, the Saudi-led Organisation of the Petroleum Exporting Countries and its allies, including Russia, have agreed to a series of production cuts since 2022.
In April, the group of oil producers known as OPEC+ plans to increase output. The Saudi economy is expected to grow by 1.3% this year, according to a Reuters poll. This is one of the slowest growth rates in the Gulf Cooperation Council bloc and slightly more conservative than the recently updated IMF estimate of 1.5%.
Saudi Arabia’s labour market is changing as new industries grow and reliance on oil falls. Government reforms, investment, and private sector hiring are creating jobs, raising participation, and building skills. While challenges remain, continued training, foreign investment, and policy support are key to sustaining growth and meeting Vision 2030 goals.