Saudization of the Life Sciences Industry in 2023

BY Karolina Majcher
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In recent years, the Saudization of the Life Sciences has become one of the most pressing issues for the companies operating in the industry. The KSA Ministry of Human Resources and Social Development has continued to implement the government’s Vision 2030 strategy and the related Nitaqat program to increase Saudi employment in the private sector by nationalizing certain professions.

Saudization of the Life Sciences industry so far

As of today, the Ministry of Human Resources and Social Development has undertaken two major initiatives related to the Life Sciences industry. First, in 2020, the Ministry announced the partial nationalization of the pharmaceutical sector, and in the following year, a similar decision was made concerning the medical devices sector.

The Ministry decided to localize pharmaceutical professions in two phases. The first phase involved locating 20% of the roles by July 22, 2020, while the second phase aimed to increase the number of employed Saudis to 30% by July 11, 2021. The decision applied to all companies employing at least five employees in pharmaceutical professions (professional accreditation with the Saudi Commission for Health Specialties is required).

As a result of these actions, 1,500 local pharmacists were employed in 2020. This number was expected to increase to 3,000 by 2022. In addition, the monthly minimum wage for Saudis employed in one of the positions included in the program was increased to SAR 7,000 for specialists and SAR 5,000 for technicians.

The Nitaqat program in the medical devices sector was also launched in two phases. Effective April 11 2022, a 40% Saudization rate was adopted in the first phase. The situation is similar in the case of the localization of engineering and technical professions for medical devices, with a rate of 30% in the first phase. The changes apply to all companies with employees working in occupations related to sales, promotion, and introduction of medical appliances, as well as to those employed in engineering and technical professions in the medical appliances sector. On top of that, the monthly minimum wage has been set at SAR 7,000 for workers with a bachelor’s degree and SAR 5,000 for technicians.

Due to constantly changing requirements, we notice a trend of extensively hiring Saudi Nationals for sales and specialist positions. At the same time, expats still have a chance to get jobs in senior positions and positions requiring specialist knowledge and skills. However, these opportunities are also being slowly limited.

Saudization of the Life Sciences industry  in 2023
(© Art_Photo – stock.adobe.com)

Saudization of the medical devices sector – the second phase

Following last year’s Ministry of Human Resources and Social Development decision, the medical devices sector will enter the second phase of Saudization, most probably on April 1, 2023. However, the date has not been confirmed yet.

As a result, the Saudization rate for sales and advertising professions and the introduction of medical appliances and supplies will increase from the current 40% up to 80%.

In turn, the localization of engineering and technical professions for medical devices will increase to 50% from the current 30%.

What does this mean for the industry? First, significantly increased expenditure on recruiting and onboarding new employees. Second, difficult access to qualified specialists and intensified fight for recent graduates currently entering the market.

To overcome these challenges, you might need a rich database of local candidates, an optimization of the recruitment process to minimize the number of candidates resigning during the process, or even an improvement of the onboarding process, which also tends to have a decisive impact on the retention of new employees.

Regarding the candidates just entering the market, it is worth considering cooperation with universities to acknowledge graduates with our company first-minute. Popular Saudi universities educating future specialists in the Life Sciences industry include King Saud University, King Abdulaziz University, and Umm-AlQura University.

What is Saudization?

Saudization policy is not new and has been around for decades. Nevertheless, the most intensified activities began in 2011 with the introduction of the Nitaqat program as part of the government’s Vision 2030 strategy aimed at significantly reducing unemployment among Saudi Nationals.

As part of the Nitaqat program, the Ministry of Human Resources and Development monitors the national labor market and, where deemed necessary, makes decisions to reserve certain professions exclusively for Saudis or determine the percentage of roles that the Kingdom citizens must fill. As of today, the Ministry has reserved more than 90 professions exclusively for Saudis, although these are often junior positions. In addition, the mentioned Vision 2030 strategy is also aimed at upskilling the population, directly related to filling new positions with freshly educated citizens.

Skill gaps are particularly visible in the more technical roles reserved for engineers, architects, healthcare practitioners, and IT professionals. It has led the Saudi Arabian government to implement new eligibility requirements on its multibillion-dollar scholarship program for young Saudis who want to study for university degrees abroad.

The Nitaqat system categorizes private sector companies according to their size and nature of business, assessing compliance with the program’s requirements. Depending on the degree of this compliance, companies can be assigned to one of five color ranges (Nitaq). Companies placed in the Platinum or Green categories meet the requirements of Saudization, which is rewarded with various privileges. On the other hand, those companies that failed to meet the mentioned requirements in a given period fall into the Red category while losing access to certain ministerial services.

The way companies are categorized is based on specific algorithms and is detailed in the official Procedural Guideline. Businesses can also use the Nitaqat Interactive Guide to automatically identify their Nitaq and get advice to improve their status.

The Ministry of Human Resources and Development can change the Nitaqat program. So far, the two biggest changes were removing the Yellow category and increasing the minimum wage.

Is it challenging for your company to meet Saudization requirements?

Saudization policy is often a challenge for companies that cannot hire more expats, while struggling to find suitably qualified local candidates simultaneously. Moreover, competing for the best employees favors qualified Saudis in frequent job changes and regular pay increases, which can also be challenging for some employers.

For many years, we have been helping the best Life Sciences companies meet the requirements of the Nitaqat program. Contact us to discuss your challenges and prepare an action plan.

Published: 30 January 2023

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