Challenges and Opportunities in Employing Locals in the Construction Industry: Saudi Arabia Case

Abstract

The construction industry in Saudi Arabia represented around 5.5% of the gross domestic product (GDP) in 2019 and employed around 26.4% of the total workforce in the Saudi private sector; however, only 12.5% of the construction workers are locals. In 2020, unemployment has reached 15.4% among Saudi nationals. Concurrently, approximately 6.7 million workers in the Saudi private sector are non-locals. This paper investigates the challenges and opportunities of employing locals in the construction industry. A quantitative analysis of the public statistics is conducted to determine the genuine challenges and potential opportunities in replacing non-locals with locals in the construction industry. The analysis reveals that although most of the Saudi construction industry workforce (87.5%) are non-local, the construction industry practically can accommodate around 9.5% of unemployed Saudis annually based on the current distribution of unemployed Saudis and the construction labor market. The analysis, also reveals that most unemployed Saudis are college graduates with majors that do not fit to find, suitable jobs in the construction industry. Among the findings that the Saudi construction industry will continue to need a non-Saudi workforce. Furthermore, though most unemployed Saudis are college graduates, there is a shortage of Saudis with appropriate training and academic majors.

Development of a Performance Assessment Model for Contractors in Saudi Arabian Construction Projects

“…Payment delay is a common problem that jeopardizes the financial viability of businesses [3,4]. In addition, the sector has a labor shortage, mostly because of its reliance on foreign labor, which causes delays in project completion and may result in penalties [5,6]. The expense of incorporating technology developments might be prohibitive for many firms, even though they provide prospects for enhanced efficiency and safety [7][8][9].…”

A Framework for Embracing Construction 4.0

“…This instability can be seen at both the construction firm (micro) and industry (macro) levels. Furthermore, the construction industry is more often affected during any recession or period of economic stagnation [6].…”