Saudi Arabia’s Labor Reform Initiative (LRI), which was announced last November, has gone into effect as of Sunday, bringing the kingdom a step closer to its goal of developing human capital and empowering people by fostering a competitive but fair working environment.
Experts have confirmed that the initiative is a fundamental shift in the Saudi labor market and the relationship between the employer and expatriate workers.
They stressed the importance of improving the local labor market to match the kingdom’s aspirations and attract skilled workers.
The job mobility service offered by LRI helps eliminate unfair control and weak management of employment and forces employers to abide by the contractual relationship.
The vision of the LRI is to create an attractive labor market in the Kingdom that offers flexible working conditions for the contractual workers and helps to empower and improve human resources.
Prior to the reforms, sponsored foreign workers needed to take permission from their current employer to change their job. They also required approval before traveling outside the country or undertaking their administrative tasks.
Implementing contractual relationships will enable raising the efficiency of human capital operating in the Saudi labor market, said Mercer’s CEO in Saudi Arabia Mahmoud Ghazi.
Ghazi noted that the move standardizes work mobility according to fresh procedures and conditions that stem out of competency, merit, and professionalism.
The change brought about by the LRI to labor mobility will produce a qualitative leap in improving both employer and employee rights, Ghazi told Asharq Al-Awsat, adding that this will reflect positively on attracting investors to Saudi Arabia.
Economic analyst Abdulrahman al-Jubeiri has reaffirmed that the initiative brings about a number of advantages to the Saudi labor market.
“Implementing the LRI entails a list of pros that include increasing the competitiveness of the Saudi worker, improving the local work environment, advancing Saudi Arabia’s ranking in the international competitiveness index, and reducing employment costs,” Jubeiri told Asharq Al-Awsat.
He added that the LRI also supports greater opportunities for localizing jobs, technology, and experience in the kingdom.
