The 2026 Nitaqat reforms are exposing a workforce data problem

Many Saudi companies are getting Nitaqat violation notices for employees who are fully compliant, and the problem is not headcount. Data attribution and quality are a big problem facing companies seeking to comply with Saudization requirements, payroll and compliance manager Jisr’s CEO Mohamed Akkar tells EnterpriseAM.

REMEMBER- A few things changed when the new Nitaqat Mutawar cycle kicked off in April: The Yellow tier is gone — establishments previously in Yellow are now Red, with blocked visas and blocked work permit renewals, and expatriate staff able to transfer sponsorship without employer consent. The general salary threshold also rose to SAR 4k from SAR 3k, with higher profession-specific floors above that. Meanwhile, profession-level quotas expanded to 269 roles, and Qiwa contract documentation became mandatory.

The macro figure suggests the Saudization drive is working. Jisr — whose platform manages payroll and compliance for roughly 800k employees, around 7-8% of the total private sector workforce — recorded that 51% of new hires across its client base between January 2024 and June 2026 were Saudi nationals, against 49% non-Saudi, according to data Jisr shared with EnterpriseAM. For a private sector that has historically skewed heavily towards expatriates, that’s a shift worth noting.

It’s a data problem — and the 2026 reforms just made it expensive. The expanded profession-specific quotas made it so a company can sit comfortably in Green on its overall Saudization rate while still triggering a violation in a single department. And, since April, only Saudi employees with contracts documented on Qiwa count toward the calculation at all. “When we looked into it, we saw that there were some employees categorized under the marketing department, but the reality was that they were in a different department entirely,” Akkar tells us.

Retention adds a second layer of complexity in labor-intensive sectors. “Now with the introduction of new laws that increase the Saudization requirement, it has made it a challenge to not only attract but to retain the talent as well,” Akkar says, speaking specifically about retail. This means compensation benchmarking — understanding what the market pays and whether a bonus structure is competitive — has become a compliance tool, according to Akkar.

The talent question

The talent supply is not the constraint. The local talent pool has grown rapidly over the past three years — in the startup sector alone, Akkar says it has expanded 5x over five years, driven by a combination of VC investment, government programs, and international talent relocating to the Kingdom. Looking ahead, he expects shortages in specific areas to become “far less significant” over time.

“The talent is available, but accessing this talent has been a bit of a challenge — finding and sourcing is the problem,” Akkar says. Globally, knowledgeable workers are findable, thanks to LinkedIn. In Saudi, the recruiting infrastructure to reliably reach that growing pool hasn’t kept pace with its growth, Akkar says.

DATA POINT- Jisr’s data shows the bulk of Saudi new hires between January 2024 and June 2026 were concentrated in food & beverages (17%), general services (12.5%), retail, wholesale and distribution (11%), construction and building (9%), healthcare and medical services (6%), and contracting (5.5%).

The missing middle: While Jisr is seeing Saudization quotas being filled across employment levels, “the middle layer is historically where we normally see some gaps when looking at the data,” Akkar says.

What separates the leaders

The companies consistently exceeding their Saudization targets have one thing in common — they started early. “Planning is crucial. Those companies who [do] well in terms of workforce planning are the ones that actually make it,” Akkar says. The second distinguishing factor is training investment — mapping future quota requirements against current workforce composition and building internal capability rather than scrambling for the smaller pool of senior Saudi hires.

What’s next

The current Nitaqat Mutawar cycle runs through 2028, and the pressure doesn’t plateau. The Human Resources Ministry has set a target of localizing more than 340k additional private-sector jobs by 2028. The C-values that set required Saudization rates by sector are scheduled to increase again for most economic activities over the next two years — meaning a company sitting in Mid Green today can slide toward Low Green without changing a single hire.

Where Jisr comes in: Jisr, which has operated in the Saudi market for more than nine years, is rolling out a new platform version that combines compliance tracking, compensation management, and workforce planning in a single system, Akkar says. Its focus is SMEs, on the basis that best practices available to companies with dedicated HR and legal teams should be accessible to the broader market. “Global HR-tech platforms don't understand the nuances of local regulations, how different government entities interact, or how data is fragmented across various systems,” Akkar says.