The Saudi Arabian Ministry of Human Resources and Social Development (MHRSD) has mandated the localization of specific procurement roles within the private sector, effective November 30, 2025. This decision impacts companies employing three or more workers and requires them to fill 70% of targeted procurement positions with Saudi nationals. The initiative forms part of the Kingdom’s ongoing Vision 2030 plan to diversify its economy and increase the participation of its citizens in the workforce.
The ruling, announced in Riyadh, applies to a defined set of procurement-related professions, though the specific job titles encompassed have not yet been fully detailed by the MHRSD. This move is expected to impact various industries relying heavily on procurement processes, including construction, manufacturing, and retail. Businesses are beginning to assess the potential changes to their staffing and recruitment strategies.
Understanding the New Procurement Localization Requirements
The overarching goal of this policy is to enhance the employment of Saudi citizens within the private sector. According to the MHRSD, increased localization in key roles like procurement will contribute to a more competitive national economy. This aligns with the broader Saudi Vision 2030 objectives, which prioritize raising the private sector’s contribution to gross domestic product and reducing reliance on foreign labor.
Historically, the Saudi labor market has been heavily dependent on expatriate workers. However, recent years have seen a concerted effort by the government to “Saudize” various industries, aiming to create sustainable jobs for its growing population. Initiatives like this one involving procurement are central to that ambition.
Support Measures for Businesses
To facilitate a smooth transition, the MHRSD will offer a range of support programs to private-sector establishments affected by the new mandate. These programs are designed to assist businesses in identifying, recruiting, and retaining qualified Saudi personnel.
Some of the reported support services include assistance with recruitment processes, onboarding programs tailored for Saudi employees, and financial aid through the Human Resources Development Fund (HRDF) to partially offset wage costs. The MHRSD also plans to expand access to training and qualification programs specifically geared towards developing the skills needed for successful careers in supply chain management and related fields.
Additionally, the ministry emphasized its commitment to fostering professional stability for Saudi employees, indicating potential long-term support mechanisms to encourage retention. This represents a shift from previous localization efforts that focused primarily on initial placement numbers.
Implications for the Saudi Labor Market
The localization of procurement roles is anticipated to have several significant implications for the Saudi labor market. One expected outcome is increased competition for skilled Saudi nationals in these fields, potentially driving up salaries and benefits.
The initiative could also prompt a greater emphasis on vocational training and skills development within the Kingdom. Existing educational institutions and private training providers will likely need to adapt their curricula to meet the evolving demands of the private sector. This also creates opportunities for international training partnerships.
For foreign workers currently employed in targeted procurement positions, the ruling may necessitate relocation or a shift to other roles that are not subject to the localization requirements. However, the MHRSD has not explicitly addressed the status of existing expatriate employees, and further clarification is expected. The focus remains on actively developing the required skillset among Saudi citizens.
Broader Economic Context and Workforce Nationalization
This procurement localization decree is part of a larger trend of workforce nationalization across the Gulf Cooperation Council (GCC) countries. Faced with demographic challenges and a desire to diversify their economies, governments throughout the region are implementing similar policies. This regional shift ultimately aims to reduce dependence on expatriate labor and create more inclusive economic systems.
Experts suggest that effective implementation will be crucial. Success hinges on ensuring that Saudi nationals are adequately prepared with the necessary skills and experience to fill these roles effectively, maintaining overall productivity. Addressing potential skill gaps through targeted training initiatives is therefore a key priority. Furthermore, the robustness of talent acquisition strategies will be vital.
In contrast to previous directives, the MHRSD’s latest move seems to prioritize sustainable employment and skill development. While earlier phases of Saudization often focused on achieving specific headcount targets, the current focus highlights the development of a highly skilled and competitive national workforce capable of driving long-term economic growth.
The Ministry highlighted its understanding of the potential challenges businesses might face and reiterated its dedication to providing comprehensive support. A key component of this support will be streamlining the process for recognizing equivalent qualifications for Saudi applicants.
While specifics are still emerging, the MHRSD is expected to release a detailed list of the procurement roles subject to the 70% localization requirement in the coming months. Businesses are advised to begin preparing their workforce development plans and engaging with the ministry to understand the full scope of the new regulations. This proactive approach will be important for smooth compliance and continued operational efficiency in the Saudi market.
The next phase involves the publication of the full job categorization list and specific operational guidelines for businesses. The MHRSD has indicated it will hold informational sessions for private sector employers before the November 30, 2025, enforcement date. Monitoring the ministry’s official announcements and participating in these sessions will be essential for staying informed about evolving requirements and accessing available support.
