Construction companies falling short of “acceptable” Saudisation targets in could be crippled by a landmark classification from June 11 as part of the country’s job nationalisation programme.
The Saudi Arabian government has announced it will enforce a four part classification on more than 300,000 companies operating in the Kingdom. Compliant firms will be rated excellent or green, while those that do not abide by the rules will be classified as red or yellow.
According to Saudi minister of labour Adel Faqih, the new system, called “nitaqat” (limits), is expected to put nearly 20% of those companies in the red zone.
Faqih said firms to be given the “excellent and green” rating include those achieving hat he described as “acceptable” Saudisation levels. Companies rated red and yellow include those which have not achieved appropriate levels and are in violation of existing labour regulations.
The companies will be given three months to redress their position.
Faqih also confirmed the information for the classifications will be provided by the General Social Security Corporation for Saudis and the Ministry of Interior for expatriates.
The programme comes amidst reports that unemployment of Saudi Arabia’s nationals is increasing due to the private sector’s preference of the cheaper expatriate labour and the fact that the population is growing faster than the economy. It was recently reported that a six year cap will be applied to all expatriate visas to increase the employment prospects of the Kingdom’s national workforce.
Faqih confirmed the official unemployment rate was around 10.5 per cent at the end of 2010, nearly 450,000.