‘We’ve woken up’: attitudes change as Saudi Arabia kick-starts job market

After Munira completed Islamic studies at a university in Riyadh, she moved back to her parents home in Zulfi, a small town in Saudi Arabia’s conservative heartland where the labour market catered “only for men”.

For several years, she sat idle, keen to return to the capital and get a job, but stymied by her parents, who, like many conservative Saudis of the elder generation, could not comprehend their daughter wanting to leave the family nest and search for employment.

“I told them they have to let me go, I cannot sit all my life like this,” Munira said. “The first time [I told them] they said ‘No, why? We can give you money’. I said ‘I don’t want to spend my life like this, I’m not looking for marriage yet, I need more experience in life’.”

But her parents finally relented and today, Munira, 28, works in a men’s clothes store in the capital and shares an apartment with her sister.

She is one of the growing number of women working in the conservative kingdom, a trend that has helped change the face of retail outlets in the capital’s ubiquitous malls and delivered one tangible success of Crown Prince Mohammed bin Salman’s ambitious economic reform plan. In just four years, the participation of women in the labour force has almost doubled to 33 per cent.

Underscoring the paradoxes of the brash young royal’s rule, the increasingly authoritarian government has eased many social restrictions on women, including allowing them to drive while encouraging them to work, even as it has detained female activists as part of a wider crackdown on dissent.

Cinzia Bianco, a fellow at the European Council on Foreign Relations, said tackling women’s employment was vital to reducing the overall rate of joblessness, as Prince Mohammed targets cutting unemployment to 7 per cent by 2030. But, she added, the crown prince also had other motives.

“Women have been identified as a key constituency for Prince Mohammed,” she said. “Even authoritarian royals need a constituency.”

Saudisation — getting Saudis into work

For five years after Prince Mohammed launched his Vision 2030 reform plan, unemployment hovered stubbornly above 12 per cent, with youth joblessness at more than 30 per cent.

Economic growth was limp, with the private sector cowed by the arrest of hundreds of princes and businessmen in an ostensible anti-corruption drive and uncertain of the mercurial young crown prince.

But as growth picked up after the economy contracted during the coronavirus pandemic, Saudi unemployment fell from 15.4 per cent last year to 11.3 per cent in the second quarter of this year, its lowest level in a decade, according to the state’s General Authority for Statistics.

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This is partly down to the departure of expatriates during the pandemic and tough enforcement of quotas on the number of Saudis that companies in many sectors have to employ. Almost 2m foreign workers have left the kingdom since 2017 as the government raised tariffs on them and their dependants.

Ahmed al-Rajhi, the labour minister, said the government intended to continue rolling out new “Saudisation” quotas, but predicted that expatriates, which account for about a third of the kingdom’s 33m population, would remain a similar sized proportion of the workforce.

Riyadh has to balance getting Saudis into employment against pressures on a private sector facing rising costs and which has long relied on employing lower paid, and often better skilled expatriates. Rajhi said the problem was not Saudis finding jobs outside the state, but “having the right people for the jobs, or avoiding crippling the private sector by not allowing them to bring expatriates”. 

“We are limiting the number of expats, but there are not enough Saudis,” he said.

Foreigners still account for about 77 per cent of private sector jobs. In retail, for example, where nationals now dominate the customer-facing side of many outlets, Saudis still only represent 28 per cent of the total workforce of 640,000.

‘The private sector needs to be growing’

Saudi officials say they have all but frozen civil service employment as part of efforts to shrink the public sector. But analysts say that so far it is state-affiliated entities, including the Public Investment Fund and companies related to the sovereign wealth fund, that are doing much of the hiring.

“You can push them into the labour market, but the private sector needs to be growing and the big question is: is it growing enough to hire the more than 150,000 or so entrants each year?” said a Gulf expert.

Some young Saudis still pine for the traditionally secure, well-paid state jobs elder generations enjoyed after the 1970s oil boom enriched the desert nation. This may be why the Saudi participation rate dropped slightly in the first two quarters of this year, dipping to 49.4 per cent from a high of 51.2 per cent in at the end of 2020.

“Unemployment is falling not because the private sector grew, or even because you had expats exiting, but because the labour force participation is falling as Saudis are dissuaded from looking for jobs,” the Gulf expert added.

Some still question the commitment of young Saudis to the workforce. At a Starbucks, a shift manager said his café had met its Saudisation quota by hiring two young Saudi women, but doubted they would stay.

“From the outside it looks good, but when they come, it’s too hard for them,” he said. “In the last two months, more than 10 Saudis have come and gone.”

‘We’ve woken up’

But with Saudis working in shops and hotels; on supermarket tills, in cafés and as Uber drivers, attitudes are changing in a nation where half the population is aged under 25.

Youssuf, a shift supervisor at a coffee shop at which three of the seven staff are Saudi, said “you can say we’ve woken up”. “We realised we need to work and have more experience,” added the 25-year-old.

But a Riyadh-based academic cautioned that there was still a perception that there was less security in the private sector. “If you don’t have a good job, you can’t afford a house or apartment, and if you can’t get married you are not part of Saudi society, because being married and having a family is intrinsic to the identity narrative,” he said. “This explains historically the preference for public sector positions.”

Living costs have risen as fuel and energy subsidies have been cut and VAT tripled. And as Riyadh becomes the focus of many of Prince Mohammed’s plans, more people are being forced to up sticks and move to the capital, where life can be expensive.

Mohammed is one of many young Saudis now supplementing their income by driving an Uber. “If you want to have a good job, you need to move,” said Mohammed, who moved from the Eastern Province to the capital.

Still, Munira is revelling in her newfound freedom. “I want my own money, I want to do everything — independence, now I feel it,” she said with a smile.