Saudi Employment in the Wholesale-Retail and Construction Industries in the Saudi Private Sector: A Comparative Causal Study for Policy Analysis

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Bin Judai, Mohammad Saif N (2022) Saudi Employment in the Wholesale-Retail and Construction Industries in the Saudi Private Sector: A Comparative Causal Study for Policy Analysis. PhD thesis, Victoria University.


The Kingdom of Saudi Arabia has experienced major crises regarding the lower representation of the local workforce in its labour market and the Government has implemented a policy of Saudisation to encourage private sector employers to employ locals. However, a higher proportion of expatriate workers in the Saudi labour market remains and local Saudis are making up a large part of public sector organisations. Saudi representation is lacking in the private sector. For example, the wholesale-retail and construction sectors have 88.3% and 80% of foreign employees respectively. This research explored the factors which are impeding employment of a local workforce in the wholesale-retail and construction industries and contrasting these factors across the two sectors and to identify the causes behind the ineffectiveness of the Saudisation policy. To identify the factors underlying the underrepresentation, the study relied on a mixed research methodology. A survey of employees was conducted as part of the quantitative research and interviews from owners and managers made up the core of the qualitative research. It was found from the quantitative research that the key contributing factors are: organisational commitment, working conditions, wages/benefits, social status and power distance. There was a statistically significant difference for these factors across wholesale-retail and construction sectors, except for social status. The perceptions of these factors were higher for the wholesaleretail sector, as service-based jobs are less preferred by Saudis and they view them as less privileged compared to other sectors. Statistically significant differences were also found for the factors affecting the employment of Saudis in the wholesale-retail and construction industries across the demographic variables of gender, work experience, training and scientific qualification. The findings of the qualitative study have revealed the causes behind the ineffectiveness of the Saudisation programme. The key reasons included the cultural factors (social status and power distance), the ineffectiveness of the education system (creates a gap in demand and supply of skills and knowledge for labour market), ineffective training and high inclination of local employees towards the public sector. The study provides practical guidance to policymakers, employers, Saudi employees and implementers of the Saudisation programme. The factors leading to the slow response of the private sector in the implementation of Saudisation are identified. Suggestions are made for addressing the factors concerning the employees by supporting the private sector and by reducing the pay gap between private and public sectors to encourage local employees to pursue careers in these sectors. There is a need for continuous collaboration between all sectors in the economy for prosperity to be achieved. Employers should address attitudinal and motivational factors and the aspect of power distance. This study is the first to introduce the notion of power distance and social status as the cultural factors influencing the hiring of Saudi nationals. It provides a good background for future research.

Item type Thesis (PhD thesis)
Subjects Current > FOR (2020) Classification > 3801 Applied economics
Current > FOR (2020) Classification > 4407 Policy and administration
Current > Division/Research > VU School of Business
Keywords Saudi Arabia, Saudisation programme, employment, policy, labour markets, unemployment
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