Specialists told Al Arabiya.net: The quality of jobs is at the forefront of the next stage in the Saudi labor market

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The Saudi labor market is heading to a new phase in which interest in the quality and sustainability of jobs and matching skills with the needs of the economy is advancing, after the improvement recorded in unemployment indicators among Saudis over the past years, according to economic specialists who spoke to Al Arabiya.net.

The General Authority for Statistics revealed that the unemployment rate among Saudis was 6.5% during the second quarter of this year, compared to 6.4% in the first quarter, while it reached 6.8% in the same quarter of last year.

The specialists believe that legislative and regulatory reforms, nationalization programmes, and increased participation of women in the labor market, in addition to the expansion of non-oil activities and investments in new sectors, contributed to the improvement witnessed in labor market indicators.

Economic analyst Dr. Ali Al-Hazmi told Al Arabiya.net that a group of factors contributed to the decline in Saudi unemployment, most notably the legislative and regulatory reforms that have enhanced the flexibility of the labor market and expanded employment opportunities since the launch of Saudi Vision 2030.

He added that “qualitative nationalization” played an important role by introducing new professions and sectors into nationalization decisions, such as pharmacy, engineering, dentistry, and some marketing professions, which enhanced the entry of Saudis into specialized jobs.

Al-Hazmi pointed out that the increase in Saudi women’s participation in the labor market constituted one of the most prominent transformations, stressing that the most important impact is not limited to increased participation, but rather in “the economy’s ability to absorb new entrants into productive and sustainable jobs.”

The expansion of non-oil activities and investments in new sectors also contributed to creating more opportunities, in addition to the role of the Public Investment Fund in establishing companies and developing promising economic sectors.

Al-Hazmi believes that achieving the target of reducing Saudi unemployment to 7% ahead of time opens the way for a more ambitious target of reaching 5% by 2030.

He added that the next stage is likely to witness a greater focus on the quality and sustainability of jobs and matching skills with the needs of the economy, in parallel with continuing to improve the performance of the labor market.

For his part, economist Dr. Muhammad Al-Qahtani told Al Arabiya.net that the decline in unemployment among Saudis should not be read as a result of a single policy, but rather a reflection of a broader structural transformation in the economy and labor market.

He explained that the growth of non-oil activities, the expansion of the private sector, and the emergence of new economic sectors, in addition to nationalization, women’s empowerment, labor market reforms, and training and qualification programs, have collectively contributed to expanding the base of opportunities available to Saudis.

He pointed out that the unemployment rate among Saudis reached 6.5% in the second quarter, compared to 6.8% in the same period last year. These levels differ significantly from rates that exceeded 12% about a decade ago.

Al-Qahtani stressed that reducing unemployment and improving job quality represent two complementary goals, but the concept of job quality will be more present in the next stage.

He said that the question at an earlier stage revolved around how to create more jobs for Saudis, while today discussions are directed towards the quality of the job, its productivity, its level of wages, and its ability to provide a viable career path.

He added: “We are gradually moving from the stage of job creation and localization to the stage of raising the value and productivity of the job.”

Al-Qahtani called for studying the creation of a “national index of job quality” that would complement traditional indicators related to unemployment, participation, and employment.

He explained that the proposed indicator should not be limited to salaries, but rather includes the level of real wages, job stability, benefits and social protection, training and development opportunities, career path and promotion, the extent to which the job is compatible with the employee’s qualifications and skills, and the level of productivity.

He also suggested that the index measure the ability of jobs to continue in light of accelerated technical transformations, artificial intelligence, and automation.

Al-Qahtani believes that such an indicator could give decision-makers, the private sector, and researchers a deeper reading of the labor market, as the unemployment rate reveals the number of job seekers, but it does not alone provide an integrated picture of the quality of jobs occupied by workers.

Al-Qahtani stressed that the next stage requires enhancing the transition from “quantitative nationalization” to “qualitative nationalization,” so that the criterion is not only the number of Saudis employed, but rather the quality of jobs, wage levels, productivity, training, stability, and opportunities for professional advancement.

He stressed the importance of continuing to align education and training outcomes with the needs of the new economy, especially in artificial intelligence, advanced technologies, industry, financial and logistical services, energy, tourism, and the digital economy.