Oct 05 2011
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Most SMEs in Saudi Arabia 'are in red and yellow zones'
JEDDAH: Most of the small and medium enterprises (SMEs) in the Kingdom are in the red and yellow categories, a senior consultant of the Labor Ministry revealed on Tuesday.
He pointed out that the Nitaqat program aims to focus on SMEs in a bid to create more jobs for citizens.
Hesham Rowaihy, manager of advisory services at PricewaterhouseCoopers which advises the ministry on various matters, also said the ministry would push SMEs to employ more Saudis either by creating new jobs or appointing them in place of expatriates.
According to a report presented at Jeddah HR Forum 2011, less than 9 percent of jobs in the Kingdom's SMEs are held by Saudis.
SMEs can play a big role in creating more jobs for Saudis as they account for 93 percent of total companies in the Kingdom, he added.
During the HR Forum, which was opened by Labor Minister Adel Fakeih on Sunday, business executives in Jeddah have presented their programs to create 50,000 jobs for Saudis within a year. Unemployment is a big issue for the Saudi government as more and more Saudi graduates are passing out from universities. By 2030 about 8 million graduates are expected to enter the job market. The public sector can accommodate only a million of them, putting pressure on the private sector to find ways to absorb the rest.
Rowaihy said during the forum companies had raised their problems in implementing Nitaqat as they experience difficulties finding qualified Saudis to replace expatriates, especially to do technical jobs.
"Minister Fakeih is aware of this problem and has promised to solve it by intensifying technical training programs," he said.
In the meantime, companies can apply short-term solutions such as employing Saudis in jobs they can do by providing them training for three to six months.
"We believe that a lot of Saudis can be employed in this way, especially in the industrial and transport sectors," Rowaihy pointed out. The ministry is also thinking of applying a minimum salary for all workers in the private sector including expatriates.
"If a company gives a minimum salary of SR3,000 for all, it will favor Saudis rather than expatriates," he said.
"Another issue raised at the forum is that Saudis are protected by the ministry and that companies have no control on them. There was a recommendation that a Saudi, who leaves a company without fulfilling contract terms or without giving notice, should be blacklisted," he said.
Asked whether the closure of SMEs in red and yellow categories would affect the economy, Rowaihy said the ministry would demand from such companies an action plan on how they are going to increase the percentage of Saudi workers to avoid disciplinary action.
Organizations such as the Human Resource Development Center and the Human Resource Development Fund will provide SMEs with necessary consultancy services to move from red to green and above by setting up a succession plan.
In a paper presented at the forum, Ayman Jamal, chairman of the Young Businessmen Committee at the Jeddah Chamber of Commerce, argued that giving necessary support to a single Saudi entrepreneur will help create 28 new jobs.
"We hope that if the companies in red and yellow brackets provide training to Saudis they can create thousands of jobs," said Rowaihy.
During the forum, Fakeih urged business executives to target Saudization of jobs that add value to Saudis instead of appointing them to do menial jobs.
"There may be companies in premium categories but all managerial jobs are taken by expatriates. The ministry does not encourage such kind of Saudization. It wants Saudization of a percentage of jobs in higher, middle and low level management," he pointed out.
Rowaihy also spoke about an agreement signed by the Labor Ministry with Enjaz in order to create awareness among Saudi students at elementary level to develop a new job culture.
It is also introducing motivational programs such as reducing the working hours from 12 to 8 in some firms. "This will not only attract Saudis but also create more jobs," he said.
© Arab News 2011
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