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More retailers empowering Saudi nationals, integrating women into the workforce

Following the implementation of Saudization, retailers in the electronics and electrical appliances industries have been actively employing Saudi nationals for positions that were previously mainly filled by expats.

GfK conducted a two-phase survey with independent retailers and chain stores to determine the level of awareness of the regulation The first wave guages the level of awareness of the regulation prior to its implementation, while the second wave is after implementation In the second wave of the survey, 46% of chain stores had already replaced all expat employees with locals while 82% had successfully trained customer-facing Saudi nationals

Following the implementation of Saudization, a scheme to increase the employment of Saudi nationals in the private sector, retailers in the electronics and electrical appliances industries have been actively employing Saudi nationals for positions that were previously mainly filled by expats. 

With an aim to uncover the understanding and impact of Saudization across sectors such as optics and technical consumer goods, GfK conducted a two-phase survey with independent retailers and chain stores to determine the level of awareness of the regulation prior to the implementation in the first wave, followed by the impact of hiring more Saudi nationals in the second wave.*

In the first phase of the study, almost all chain stores were familiar with the program and as a result, 61% of chain stores had started preparing for the implementation from the previous years. However, of the independent retailers surveyed, despite familiarity and knowledge about Saudization, 70% of them only began preparation to hire Saudi nationals in early 2019, resulting in just a handful of local hires to date. 

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In the second wave of the survey, 46% of chain stores had already replaced all expat employees with locals while 82% had successfully trained customer-facing Saudi nationals. The GfK study also highlighted all respondents’ interest in providing training for more locals in future, with chain store retailers aiming to invest in increasing the number of female hires and integrating women into the business. 

However, both groups of retailers agree there are some challenges, namely retaining Saudis as they have the flexibility of switching jobs or industries, or they may not have had adequate industry training. As for independent retailers, a small percentage would like to adopt a ‘wait and see’ approach on local employee’s ability to sell high-end products while some others are still unsure of the challenges to expect from the Saudization program. 

In addition, with the retail landscape undergoing a transformation, 52% of independent retailers are concerned that customers will visit their stores lesser as staff may not be fully trained to be customer-facing, while among chain stores, 36% are concerned that more consumers are choosing to shop online instead of visiting physical stores. 

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Chris Moon, GfK’s Regional Director of Client Solutions for Middle East, North Africa & Pakistan said, “With Saudization, although retailers are keen on training and investing in locals, they have to manage rising business operation costs due to higher remuneration for Saudi nationals, and at the same time, stay competitive by ensuring prices are reasonable. With the evolving retail sector and new consumer demands, it is vital for retailers and manufacturers to be equipped with on ground insights on their sales potential areas and identify distribution gaps to make better business decisions and improve customer experiences.” 

Note:

·       GfK Saudization Wave 1 Survey (before Saudization was implemented) – 2018 and Wave 2 Survey (post-Saudization implementation) – 2019

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