Private sector work reduction may lead to increase in expat salaries
The Shoura Council’s decision to reduce working hours in the private sector from 48 hours to 40 hours per week would result in additional operational costs in the sector due to 30 percent higher wages for expat workers, according to Mansour bin Abdullah Al-Shathri, the head of the Saudi Committee for Labor Market Affairs at the Council of Saudi Chambers (CSC).
During the last committee meeting, he said, members discussed ways to minimize the negative effects and repercussions of the recommendation. If implemented, 10 million expat workers in the private sector will benefit from the the new decision.
For the past year, a number of Shoura Council members have been calling for a reduction in private sector weekly working hours. They have also called for increasing the minimum salary to SR6,000 as this would attract more Saudi nationals into the sector. Others, however, maintain that the change would not serve or benefit the national economy.
“We support any decision that provides an appropriate work environment for Saudi employees. We are working in partnership with the Ministry of Labor to achieve this, and we support any decision that will provide stability for Saudi employees,” said Al-Shathri.
He said expats accounted for 85 percent of the labor market, but the vast majority of their jobs are in the construction and contracting sector, noting that such positions generally do not attract Saudis. Work is being done to find ways to provide more employment opportunities for youth.
He said the number of expats in the Saudi labor market was expected to decline significantly over the coming three years. Many large companies have already begun offering a two-day weekend to Saudi employees.
This is being done without being required in order to create a stable and more attractive work environment.
“Saudi youth are still in the early stages of moving into the private sector whereas expats have been in the sector for more than 40 years,” said Al-Shathri. “However, over time, Saudis will gain more skills and experience and will take on important leadership roles.”