HR recruitment in Saudi Arabia is subject to unique legal requirements that can be challenging to navigate. Your team needs to stay updated on the evolving regulatory landscape to attract and retain top talent.
Partnering with NADIA Global to leverage our expertise in HRM solutions in Saudi Arabia. Our team of seasoned professionals offers tailored recruitment and HR advisory services to help you adhere to local labour laws and avoid costly penalties. We can also help you identify and attract top talent through effective recruitment strategies, improve efficiency to reduce administrative burdens and foster a positive work environment to build a stable and talented workforce.
In this blog, we will share the legal and regulatory considerations in HR recruitment in Saudi Arabia. Our goal is to empower you with the knowledge to make informed decisions and ensure compliance with recruitment laws.
Understanding the Kingdom’s labour laws
The Saudi Labour Law (updated in 2020 to align with Vision 2030) governs employment regulations in the Kingdom, and businesses operating in Saudi Arabia need to understand and adhere to these laws to avoid legal penalties and maintain a positive work environment. A robustHRMsolution in Saudi Arabia can automate some of your HR processes and provide real-time insights to help you stay updated and compliant.
How Saudi labour laws affect recruitment
Many of the new labour laws affect HR recruitment in Saudi Arabia. Below are some of the significant updates you should be aware of:
Updates on probation periods and employment contracts
The latest labour laws emphasise the importance of detailed employment contracts, which now need to clearly outline specific job roles, responsibilities, and compensation packages to be considered compliant. Standardised probation periods have also been introduced to streamline the hiring process.
A robust HRMsolutionin Saudi Arabiacan help you effectively manage these changes by letting you create standardised employment contracts, track probation periods, and manage and maintain accurate employee records.
Acknowledging rights for women in your workforce
The increase in female labour force participation in Saudi Arabia reflects the country’s commitment to gender equality and economic diversification. With recent reforms eliminating the need for male guardian consent, women are now empowered to pursue careers across various sectors. This shift has opened up new opportunities and challenges for HR recruitment in Saudi Arabia.
If you want to tap into this growing workforce segment, you need to adapt recruitment practices to attract and hire female talent, as well as foster a culture of diversity, equity, and inclusion. Consider offering flexible work arrangements to accommodate the diverse needs of working women. Invest in providing equal opportunities for advancement so that all genders are subject to fair promotion and career development policies.
Implementing the Wage Protection System
Your company also needs to adhere to Wage Protection System (WPS) regulations regarding accurate and timely salary disbursements.
WPS promotes transparency in wage distribution and demonstrates an organisation’s commitment to fair labour practices. More than avoiding legal penalties, adhering to WPS regulations enables you to maintain a positive employer brand that makes your company attractive to top talent. After all, competitive compensation packages can reduce turnover rates by up to 53% while boosting employee morale and satisfaction.
Labour Reform Initiative
The Saudi Labour Reform Initiative (LRI) is revolutionising the country’s labour market by giving both employers and employees greater flexibility and opportunities. This initiative has significant implications for HR recruitment in Saudi Arabia, as it:
- Expands the talent pool – By easing restrictions on worker mobility and introducing new work permit categories, the LRI opens up a wider pool of skilled talent for organisations to recruit.
- Enhances employer branding – Companies that embrace the LRI’s principles of fairness, flexibility, and employee well-being can attract and retain top talent.
- Streamlines HR processes – The LRI’s focus on digitalisation and automation can simplify HR processes, making it easier to manage recruitment, onboarding, and employee lifecycle management.
Saudization programs
Saudization (also known as Nitaqat) is designed to increase employment opportunities for Saudi nationals to strengthen the domestic workforce, stimulate economic growth, and advance local career prospects. This government initiative also provides various government incentives to compliant businesses.
Note that Saudization programs often involve specific quotas for the employment of Saudi nationals. For instance, in May 2024, the government increased the Saudization quota for engineering positions to 25%, effective July 21, 2024. You need to understand and comply with Saudization regulations to meet legal requirements and contribute to the nation’s economic and social progress.
The impact of labour laws and regulations on HR Management
Recent updates to Saudi Arabia’s labour laws have quite a lot of significant implications for HR management. Your company may need to do the following:
1. Update HR policies and procedures
Review and revise employee contracts, handbooks, and policies to align with the latest regulations.
Make sure that you are in compliance with updated labour standards, such as minimum wage, overtime pay, and working hours.
2. Adapt recruitment strategies
Consider implementing inclusive hiring practices to encourage female participation in the workforce. You may also need to adjust recruitment strategies to meet Saudization quotas and attract qualified Saudi talent.
3. Provide employee training and development
Now more than ever, it’s important to offer training programs to your in-house HR professionals to equip them with the skills to navigate the evolving regulatory landscape. You may also need to directly educate your employees about their rights and responsibilities under the new labour laws.
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