Hotels operating in Saudi Arabia are turning to expensive manpower suppliers to sidestep Nitaqat, the government’s latest attempt to nationalise the private sector.
The Nitaqat programme, introduced in November 2011, requires private companies, including hotel firms, to hire a given percentage of Saudi nationals. The quota varies depending on the company activity and size. The firms are divided into categories — excellent, green, yellow or red — based on the number of Saudi national employees making up their workforces.
A service available on the Saudi Arabia Ministry of Labour website enables firms to calculate their ratings by specifying ‘business activity’ and entering numbers of Saudi employees, special needs employees, part-time employees, GCC employees, imprisoned- or released individuals and expatriates.
Eyad Reda, managing partner for international law firm DLA Piper’s Riyadh office explained: “Only companies classified as ‘excellent’ or ‘green’ are permitted to apply for new visas for expatriate employees. If the new employer has been given a ‘yellow’ or ‘red’ grading then its ability to obtain visas for expatriate employees is very much restricted.
“Companies categorised ‘red’ will be unable to apply for new visas for expatriate employees while companies categorised ‘yellow’ are only allowed to renew work permits for foreign employees who have spent less than six years in Saudi.”
Reda added that the Nitaqat system is being “strictly implemented by the KSA authorities”.
Abdul Karim Al Atiq, general manager of Coral International Hotel Al Khobar and HMH group general manager, said Nitaqat is very good for Saudization, but it is particularly difficult for hotels to meet the system’s requirements.
“Unfortunately in hotels, it’s not easy to find the Saudi talented guys with experience or training,” he said.
Moreover, the hospitality industry is not a traditional route for nationals to take: “At one time being an hotelier was out of the question for a Saudi national. We work six-to-seven days a week, that’s the main concern — the long hours and split shifts. Then there are the lower wages in hotels; some of the available nationals are graduates but we don’t count much on education, but rather service skills and experience,” Al Atiq explained.
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