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Nitaqat

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In this report we will talk about the Saudi labor market specifically (saudization and Nitaqat program) implemented by the labor market, employing various ways of advertising and promoting this campaign. Saudization is a policy to prioritize the hiring of Saudi nationals over expatriates in privet sectors intendened to lower the unemployment rate which according to CIA factbook the unemployment rate reached in 2011 to 10.9%. in order for the ministry of labor to measure the Saudization of a private company, a program called Nitaqat was lunched.
Advertising and promotions is bringing a service to the attention of potential and current customers, carried out by implementing an advertising plan. The goals of the plan should depend on the overall goals and strategies of the organization and the results of the marketing analysis. The plan usually includes what target markets you want to reach, characteristics you want to deliver to your target market, how you will deliver it to them, which is done by an advertising campaign. Successful advertising depends on knowing the best methods and styles of communications of each of the target markets that you want to reach with your ads.
Saudi Labor market:
The problem of unemployment is complicated and very difficult to specify one factor that is the reason behind unemployment. As I mentioned the unemployment rate reached to 10.9% and expected to increase, some economist pointed out that the reasons is poor education levels among Saudis that are not fit to the labor market, where others pointed the high wages Saudis demined for jobs also the low productivity Saudi workers have.
Ministry of labor estimated foreign workers population of 7.5 million in Saudi and intended to lower it. In May 2011 the Saudi Arabia Minister of Labor Adel Fakieh announced that introduction of Nitaqat to evaluate private organizations based on their achieved percentage of Saudi employees in relation to other companies of their size and type of economic activity, would reduce the overall number of foreign workers in Saudi Arabia's private sector. Nitaqat program subjectes private companies under the classification of Green, Yellow and Red, depending on the number of foreign workers they have, and the length of their employment. The ministory of labor announced that there are 500,000 unemployed Saudis, including 28% of women, and 40% of high school graduates. To meet their needs the government was determined to create 1.1 million new jobs for Saudi nationals by 2014. John Sfakianakis, chief economist at Banque Saudi Fransi, provided another viewpoint, he argued that in 2011 the total number of foreign workers exceeded 8.5 million, and three quarters of that number were employed in the private sector, moreover Nitaqat system would not apply to the hundreds of thousands, if not millions, of expatriate house servants. Their work visas would be automatically renewed without taking into consideration the years they had worked in Saudi Arabia. The Minister then noted that recent data indicated that some 300,000 foreign workers would have to be discharged. The Saudi government then set the introductory date for the Nitaqat program in September.
According to Ministry data published in the Saudi media in December 2011, about 6 million foreigners were still employed in the private sector, and the number of unemployed Saudi men and women remained constant at about one million. The Nitaqat program did not have a major impact on foreign employement, In addition, a national monitoring center for manpower information was launched, and the ministry urged all Saudis who had not registered under the Hafiz unemployment assistance program to register immediately. The Hafiz provides a maximum monthly allowance of 2,000 Saudi riyals would help Saudis to locate job opportunities, the government would also introduce the Taqat, a four month training program that would provide skills needed to find work in the private sector.
About Nitaqat:

Green companies that hired an acceptable percentage of Saudi citizens in their work force would enjoy all benefits to be extended by the ministry, including the continued recruitment of foreign manpower and the transfer of sponsorship visas among other Green firms. The Yellow and Red firms, which have low percentage of Saudi employees, were at serious risk of forfeiting their iqamas to both actual and future foreign employees. Companies in the yellow category that fail to fulfilling the Ministry's Saudization conditions would be given time to correct the situation. Once that occurred, companies would be allowed to renew iqamas. Minister of labor forced the private sector to work and warned that the iqamas won’t be renewed unless new regulations are followed. For private companies in the red zone, visas would not be renewed "regardless of the years" already spent in the Kingdom. Therefore the government's Saudization program would succeed even if an a lot of companies in the yellow and red categories suffered the consequences and went out of business.
Nitaqat Time Line:

On May,2011 ministry of labor announced the launch of Nitaqat and implemented a advertising campaign which will be discussed late. The second phase, however, started in 10th September 2011 when Nitaqat was implemented and some services are provided only to companies in Green and Excellent range and prevented for Organizations in the Yellow and Red ranges. The third phase starts on the 26th of November, 2011 when employees of companies in Red range are permitted to transfer to companies in Green and Excellent range without their employer agreement. The consequences if they continue to work for companies in Red then their work permits will not be renewed once it's expired. Starting 23rd February 2012 employees of entities in Yellow range are allowed to move to entities in Green and Excellent range without their employer approval, and if they decided to continue working for the same employer then the work permit renewal is restrictive to them having spent 6 years or less in Saudi Arabia. If they want to stay longer, they would have to move to Organizations in the Green or Excellent range/band.

Nitaqat advertising campaign:
The ministry of labor launched an advertising campaign targeting both employers to make them aware of the new program and Saudi labor force to increase their awareness of unemployment issue in Saudi Arabia. The advertising campaign was communicated through various means of communication, newspaper, TV, Social Media including (Facebook, Twitter and Youtube) Radio and brochures. The message of the Ads was to put a spotlight into the Saudi labor market (privet organizations) and to insure to Saudis that the issue of unemployment is important to Saudi Government.

Snapshot of some of Nitaqat Ads
The ministry of labor created a clatter in all of its media repeatedly show their advertisements on the medias previously mentioned, gaining the support of the public audience and Saudi labor force and the attention of targeted organizations. The campaign was launched in both English and Arabic languages and the wide spread of the campaign reached foreign companies that are planning to inter the Saudi market. The following figure below show the spread of the online Nitaqat advertising campaign

Google Trend Snapshot of (Nitaqat and نطاقات )
Critique of Nitaqat :
Saudi economists suggested that private companies who has high wage jobs that can be replaced by Saudis are around 450,000 jobs, where the rest that can be replaced are low wage such as security or simple disk jobs which encourage organizations to fake Saudi Employment which is to sign a Saudi to work with a wage of 2000 or less without coming to work in the organization.
Most of Saudis will not work for example in SRACO Company, which offers services to a lot of organizations. In SRACO for example Saudis will only work in disk jobs or any job without a hard labor demand.
Finally, statistics shows that the ministry of labor must create 300,000 jobs yearly for graduates male and female, Nitaqat will not create that number of jobs, it will only secure already exsisting jobs for Saudis.

The labor market in the 8th development plan:
Policies and strategies for employment of national manpower have been receiving growing attention from all agencies involved in economic and social development. Appropriate solutions to remove the constraints that impede employment of Saudi nationals by the private sector in the short, medium and long terms need to be developed, within an integrated substitution strategy. Even though the private sector has provided about 693,000 jobs for Saudi citizens under the Seventh Development Plan, compared to about 291,000 jobs under the Sixth Development Plan, the share of Saudis in total private sector employment is still below the desired level, amounting to only 35.5% in 2004.

Findings of field surveys indicate that unemployment in the Saudi economy is “structural”, in that it is the result of a fundamental mismatch between demand for and supply of national manpower, in terms of both quality and quantity. In other words, unemployment is not merely a consequence of a lack of vacant jobs due to a downturn in the economy. Rather, the supply-demand mismatch in the labor market and lack of attractiveness of work in the private sector are due partly to the relatively low wages and more importantly to a “skills imbalance”. Many Saudis looking for jobs do not have the skills sought by the private sector. Hence, it is important to take necessary actions to achieve the required match, through an integrated strategy based on a long-term future vision of Saudization.

Private sector Employment (Thousands) | Year | Saudis | Non Saudis | Total | Share of Saudis % | 2000 | 1912 | 4139 | 6051 | 31.6 | 2001 | 2043 | 4402 | 6445 | 31.7 | 2002 | 2156 | 4936 | 7092 | 30.4 | 2003 | 2312 | 4802 | 7114 | 32.5 | 2004 | 2512 | 4564 | 7076 | 35.5 |

The labor market in the 9th development plan:
The policies to promotote and develop the labor market included the following; To support efforts for realizing balance between outputs of the education and training systems and labor market requirements. Also, to ensure gradual and selective rationalization of foreign labor and develop realistic bases for their recruitment in line with labor market needs, and to reduce unemployment among the national workforce. For Nitaqat also, to support efforts for promoting balanced economic activity among regions of the Kingdom as well as balanced provision of job opportunities for the national workforce.

References: 1- ARAB NEWS, . "Labor Ministry outlines Saudization percentage." Philippine Embassy in Riyadh 02 NOVEMBER 2011, n. pag. 0. <http://www.philembassy- 2- OBLENA, LUCILA. "NITAQAT: Saudi Arabia to Prioritize Citizens in Hiring." . N.p., 30 JUNE 2011. Web. 9 Mar 2012. <http://tipakan.com/saudi-arabia-to-prioritiza-citizens-in-hiring>. 3- . "Saudi labor ministry: 'Saudization' policy a failure." GMA . GMA News, 10 December 2011. Web. 9 Mar 2012. <http://www.gmanetwork.com/news/story/241292/pinoyabroad/saudi-labor-ministry-saudization-policy-a-failure>. 4- . "‘Nitaqat’ may wipe out 40% of private firms."ARABnews. N.p., 18 May 2011. Web. 9 Mar 2012. <http://arabnews.com/saudiarabia/article410649.ece>. 5- Fakeeh, Manal S. “Saudization as a solution for unemployment: the case of Jeddah Western region.” DBA Dissertation University of Glasgow Business School 2010. 6- . "قراءة نقدية في برنامج نطاقات." اليوم . N.p., 9 March 2012. Web. 9 Mar 2012. <http://www.alwatan.com.sa/Articles/Detail.aspx?ArticleID=6211>.

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