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| 17 October, 2017

Saudis earn double the salaries of expats in the private sector

Jobseekers stand in line to talk with a recruiter at a booth at a job fair in Riyadh, January 29, 2012.

Jobseekers stand in line to talk with a recruiter at a booth at a job fair in Riyadh, January 29, 2012.

REUTERS/Fahad Shadeed

The average monthly wage of a Saudi national working in the private sector is estimated at $2,057

A Saudi employee earns double the average monthly wage of a non-Saudi employee in the private sector, according to the latest data by the General Authority for Statistics.

The average monthly wage of a Saudi national working in the private sector is estimated at 7,717 Saudi riyals ($2,057), according to the authority’s labour market report for the second quarter of 2017, whereas non-Saudi employees had an average take home pay of 3,855 Saudi riyals per month.

By comparison, in the government sector the average salaries of expatriates was slightly higher than their Saudi counterparts, at 11,138 and 10,589 Saudi riyals respectively, the report added.

Among non-profit organisations, the data showed that expatriates earned a higher monthly wage of an average of 6,370 Saudi riyals, compared to the 4,827 Saudi riyals earned by the average Saudi worker in the same sector.

“The public sector in Saudi Arabia is almost fully saturated by nationals even at higher rates than in other GCC [Gulf Cooperation Council] countries like Kuwait and UAE [United Arab Emirates]. So there is less room for additional employment of Saudis in the governmental sectors,” economist Mohammad Ramadhan told Zawya in a telephone interview.

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“This saturation combined with the double digit unemployment levels creates a pressing need for creating jobs in the Saudi private sector. Drawing in foreign investments to the kingdom is key to absorb the growing population of young Saudis entering the labour market,” he added.

“The salaries of Saudis in the public sector are also generally lower than those of government employees in Kuwait and UAE, and that is predictable given the high population of Saudi citizens who makes up near 80 percent of the total GCC nationals,” Ramadhan noted.

IMF pay warning

In its latest report published this month on Saudi Arabia, the International Monetary Fund noted that the significant wage gap between expatriates and Saudi nationals in the private sector leads to more demand for expatriates in this sector.

The fund also said the large gap between public versus private sector pay for Saudi nationals leads to a preference among Saudi nationals towards employment in the public sector, adding that wages are set to account for over 45 percent of government spending in 2017.

“A review of government employment and wages should be undertaken and a strategy developed to gradually and sustainably reduce the wage bill over time,” the IMF said.

In September 2016, the Saudi government scaled back all allowances, financial benefits and bonuses for public sector employees and military personnel, in light of the tumbling oil price. However, this was reversed in April this year, as the budget figures improved.

© ZAWYA 2017