Saudi private sector grows to 13.6 mn, with Saudization concentrated at the top

Saudi Arabia’s private-sector workforce is growing, and the Saudization gains are landing in its higher-skill jobs. Private-sector employment rose 7% y-o-y to 13.6 mn at the end of 2Q, with Saudi nationals up 8.2% to 2.689 mn, or 19.8% of the total, according to the National Labor Observatory’s quarterly report (pdf). That outpaced the 6.8% growth in non-Saudis, who now number 10.9 mn. The government separately employs 1.1 mn, 96.8% of them Saudi.

The Saudi gains cluster near the top of the skill ladder. High-skill Saudization rose to 51% from 47% since 2Q 2023, as high-skill Saudi employment climbed 35% to 1.6 mn. Saudis now hold 92% of clerical jobs and 64% of managerial ones. Mid-skill employment grew just 82k to 1 mn, and Saudization there has held at 23%.

The base of the workforce remains overwhelmingly expat: 5.7 mn non-Saudis work in elementary occupations, against 57k Saudis.

Pay tracks the same divide. The average Saudi private-sector wage rose 5.4% y-o-y to SAR 9.5k, roughly 3.5x the SAR 2.7k non-Saudi average. Some 87.7% of non-Saudis earn under SAR 4k a month, while 68.1% of Saudis sit in the SAR 4-8k band. Pay also rises with firm size, from SAR 5.4k at micro-enterprises to SAR 12.1k at large ones.

The inflow is feeding that shift. Saudi entrants to the private sector reached 563k in 2Q, up 30% y-o-y, against 411k exits, for a net gain of about 152k. First-time entrants hit 130k, a 69% jump, with returnees making up the other 433k. High-skill entrants rose 68% to 74k and mid-skill entrants 73% to 55k. Large firms took the most hires at 230k, followed by micro-enterprises at 141k.

Finance leads on localization. Finance and ins. posted the highest Saudization at 84%, or 89k of 106k workers, ahead of mining and quarrying (70%) and ICT (59%). By growth, real estate expanded fastest at 29.3% y-o-y, followed by ICT at 28.4%, while health and social work was nearly flat at 0.3%.

Micro firms grew fastest; large firms employ the most Saudis. Micro-enterprises added workers fastest, up 14.1% y-o-y to 4.798 mn, followed by small firms at 6.0%. Large firms grew just 2.9%, but they employ 1.242 mn Saudis, 46% of the Saudi private-sector workforce.

Regionally, Riyadh dominates, the south grows fastest: Riyadh employs 6.2 mn private-sector workers and holds 46.4% of the Kingdom’s Saudi private-sector workers, ahead of the Eastern Province (2.6 mn) and Makkah (2.3 mn). By pace, Najran grew fastest at 45.7% y-o-y, followed by Hail (13.7%) and Qassim (11.5%). Al-Baha, the Northern Borders, and Al-Jouf have the smallest workforces.

Saudi women are gaining faster than men. Saudi women in the private sector grew 9.9% y-o-y to 1.1 mn, outpacing the 7.0% rise among men to 1.6 mn. Women now make up 42% of the Saudi private-sector workforce and hold 33% of Saudi senior-management roles. Saudi men, however, still out-earn Saudi women in the sector, at SAR 11.5k against SAR 6.7k. Non-Saudi women grew fastest of all, up 16.7% to 523k.