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THE Kingdom of Saudi Arabia is undergoing reforms especially within the retail sector – commercial malls’ industry, including malls’ Saudization. Among which the country will be witnessing to have all malls’ employees of the Saudi nationals. And just like all aspects of these reforms, it is expected to affect directly and indirectly the varied operating costs which now stands at a low or medium level and afterwards it is expected to rise due to the regulations of minimum wages.
“We understand that these reforms are for the better future of our country especially in creating jobs for Saudi citizens which is something that we all strive to alongside our wise government. We will also discuss the expected repercussions in a step forward to offer solutions and handle the subject as appropriately as possible. We are expecting to face issues with increased labor costs and the possibility of the national minimum wage being increased even more down the years. This extra cost must be met one way or another. We are thinking of multiple ways for facing this change, but we must recognize which one is the most suitable for all related parties. We are avoiding hasty and unplanned solutions that would end up harming the costumers, the employees or the malls’ over all management,” said Mohamed Iqbal Alawi, CEO of Red Sea Markets Company Ltd, the owning company of Red Sea Mall and Chairman of Shopping Centers Committee Jeddah Chamber of Commerce and Industry.
“Some of the options within discussion are staff re-arrangements – if we can find a way to run as efficiently as we currently do and without affecting the costumers’ experience. In addition, we are sorting ways out of making up for the increased spending by restructuring space rentals among other fees. Yet, it is very important for us to ensure all actions are executed correctly. After exploring all pros and cons, we can decide on the best course of action to follow and get through this process as smoothly as possible,” Alawi added.
Saudization will bring new opportunities and challenges. The country is highly dependent on foreign labor from blue-collar jobs all the way up to managerial positions, the country relies on foreign talents and labor, with various exceptions. Saudi Arabia has about 9.2 million expatriates residing in the country for the past years. With the private sector providing over three million jobs in the last five years, job opportunities for Saudis ages 25-54 have been decreasing at a considerable rate. Therefor this directive is being put in place to give Saudi nationals the chance to get back into the private sector”, Alawi explained.
“The management of the Red Sea Mall is socially responsible just as much as we are fiscally responsible. We take into consideration that these changes like the Saudization directive and so forth are for the benefit of the country at large and our own benefit in the long run. It cannot be denied that this directive will end up empowering the greater economy and thus putting more money in the hands of lower and medium income Saudi families to spend on things more than the necessities, but rather on general entertainment and secondary needs. We believe that this is also a step in getting Saudi nationals accustomed to working class jobs like retail, blue collar or any other type. These small steps are the key to overcoming any short-term problems with Saudization and any other challenges that we are to face while trying to realize our countries Vision 2030,” Alawi noted.
© The Saudi Gazette 2017
