RIYADH — Saudi Arabia is undergoing a period of significant transformation. Driven by ambitious economic diversification plans outlined in Saudi Vision 2030, the country’s labor market is experiencing a surge in activity and opportunity.
The Hays Middle East Salary Guide for Saudi Arabia 2024 presents a dynamic and evolving labor market fueled by favorable economic conditions and ambitious government initiatives. While the report highlights a strong outlook with projected job growth and salary increases, it also points out underlying challenges, particularly concerning talent shortages and the changing work landscape.
A Flourishing Market with Opportunities Abound
The report begins with a wave of optimism. Sixty-nine percent of employers in Saudi Arabia plan to expand their headcounts in 2024, reflecting the country’s thriving business environment.
This growth is attributed to factors such as Saudi Vision 2030 and the government’s ambitious plan to diversify the economy beyond oil, creating opportunities across various sectors. This leads to increased demand for skilled professionals. Another factor is the rising economic activity, which boosts business confidence and fuels expansion plans for many organizations.
The Challenge of Finding the Right Talent
However, this growth potential is tempered by a significant challenge – the shortage of skilled professionals. The report reveals that 50 percent of employers have difficulty finding qualified candidates, indicating a shallow talent pool.
This talent gap could hinder the growth ambitions of organizations and underscore the need for increased investment in skill development and enhancing employer branding.
Increased investment in skill development: Both public and private sectors must collaborate to create programs that equip individuals with the necessary skills for the evolving job market.
Enhancing employer branding: Organizations can attract talent by actively promoting themselves as attractive workplaces offering significant career development opportunities and competitive benefits packages.
Good News for Job Seekers: Salary Increases Expected
Despite the skills gap, professionals in Saudi Arabia can anticipate positive news regarding compensation. The report indicates that 77 percent of employers predict salary increases in their organizations this year, with the most common range for these increases being up to 5 percent.
While salary plays a crucial role, the report emphasizes the importance of career development opportunities for employee retention. It reveals that 29 percent of professionals are actively considering changing jobs, with the lack of career development opportunities being a major driving factor. This underscores the need for organizations to invest in training, development, and mentorship programs.
Training and development programs that offer employees opportunities to upskill and develop new competencies can enhance their career prospects and increase job satisfaction.
Mentorship programs connecting experienced professionals with newer employees can provide valuable guidance and support, fostering career progression.
Shifting Work Models: Back to the Office?
The pandemic has significantly impacted work models globally, with many transitioning to remote or hybrid arrangements.
While the report acknowledges the value of flexibility, it highlights a surprising trend in Saudi Arabia, where 69 percent of employers currently operate with a fully office-based model, showcasing a shift away from remote and hybrid work setups compared to the previous year.
However, the report also reveals that 25 percent of professionals value remote and hybrid options as a desirable benefit, and those with access to these options report higher job satisfaction and better work-life balance. This suggests that organizations should consider a more nuanced approach to work models, potentially incorporating flexible options alongside traditional in-office work arrangements.
Transparency, Benefits, and the Future of Work
The report delves into various crucial aspects of the Saudi Arabian labor market, including transparency, benefits, and the future of work.
One significant finding is the gap between perceived and actual transparency in pay structures, highlighting the need for clearer communication regarding compensation.
Additionally, although most employers provide benefits packages, there is inconsistency in how employees perceive their adequacy, emphasizing the importance of effectively communicating the value of these benefits.
Moreover, there are differing perspectives on the impact of Artificial Intelligence (AI) in the workplace, with some organizations exercising caution while others recognize the potential for job displacement. To address this, organizations must develop strategies to mitigate negative impacts and adequately prepare their workforce for forthcoming changes.
The Saudi Arabian labor market in 2024 presents a unique combination of opportunities and challenges. As the economy grows and organizations look to expand, the ability to attract and retain skilled talent will be crucial. Addressing the skills gap, investing in employee development, and adapting to changing work models will be critical factors for organizations to navigate this dynamic and evolving landscape.