Saudi Arabia Launches Nitaqat 2.0, Aims for 340,000 Private Sector Jobs
Saudi Arabia has rolled out the second phase of its Saudization drive, Nitaqat 2.0, targeting the creation of 340,000 jobs for Saudi nationals in the private sector over the next three years.
Key Takeaways
- Ambitious Target: The program aims to create 340,000 jobs for Saudis in three years.
- New Classification: Companies will be ranked in six tiers (Platinum to Red) based on Saudization compliance.
- Sector-Specific Rates: Saudization targets are set for 85 economic activities, ranging from 40% in management to 15% in real estate.
- Carrot and Stick: Compliant firms get benefits like preferential government contracts, while non-compliant ones face visa restrictions.
- Implementation: The first phase runs from December 1, 2024, to November 30, 2025.
How Nitaqat 2.0 Classifies Companies
Announced by the Ministry of Human Resources and Social Development (MHRSD), Nitaqat 2.0 introduces a stringent new classification system. Private sector establishments will be divided into six categories: Platinum, High Green, Mid Green, Low Green, Yellow, and Red.
This ranking is based not only on the percentage of Saudi employees but also on criteria like the average wage of Saudi staff and the proportion of female Saudi workers.
Specific Targets Across 85 Economic Sectors
The program sets precise Saudization rates for 85 different economic activities. For example:
- Management & Consultancy: Must achieve a 40% Saudization rate.
- Real Estate: Must reach a 15% Saudization rate.
These targets are further adjusted based on the total number of workers in a company, ensuring requirements are scaled to firm size.
Rewards for Compliance, Penalties for Failure
The system is designed with clear incentives. Companies exceeding their required Saudization rates will gain benefits such as preferential treatment in government contracts, access to support programs, and greater flexibility in transferring expatriate worker visas.
Conversely, firms that fail to meet the minimum targets will face significant restrictions, including an inability to obtain new work visas for foreign employees or renew existing ones.
Timeline and Broader Vision
The first phase of Nitaqat 2.0 is scheduled from December 1, 2024, to November 30, 2025. The MHRSD states the new system aims to enhance the work environment, increase job stability, and make private sector roles more attractive to Saudi citizens.
This update marks a major expansion of the original Nitaqat program, first launched in 2011 to reduce reliance on foreign labor. Nitaqat 2.0 is a core component of Saudi Arabia’s ambitious economic reform agenda, signaling a tighter focus on national workforce development.
