Skills Certifications: A Tool for Training and Job Matching in a Knowledge-Based Economy—and for Alleviating the Skills Mismatch Problem in Saudi Arabia by 2025
By Makio Yamada
The first five years of the Saudi Vision 2030 period will be over soon. As of the first quarter of 2020, the Saudization rate of the private sector had improved to 20%. Saudi Arabia’s endeavor to create jobs for its young citizens will now continue over the second five-year period. There are two methods of job creation in the Saudi labor market: one is by localizing the existing jobs which are currently occupied by expat workers; the other is by creating new job opportunities. Given that the second method is currently not highly available due to the repercussions of the COVID-19 pandemic, the first one is likely to be central to the country’s job creation policy for the time being. The main obstacle to this method, however, is large Saudi-expat wage gaps: large numbers of Saudi job-seekers, especially those who live in urban centers, will not be happy to take jobs that pay less than 4,000 Saudi riyals monthly, for instance, while the average monthly wage for expat workers in the private sector is only slightly above 2,000 Saudi riyals. Therefore, when the pandemic is eventually over, the country will need to make a return to the second method of creating new job opportunities, where required skills levels correspond with the wage expectations of Saudi job-seekers.
This Commentary suggests building a national system of skills certifications over the next five-year period (2021–25) as a way to support the creation of jobs that provide acceptable levels of wages to Saudi job-seekers. This system will benefit all key stakeholders in the labor market—students, job-seekers, educational institutions, and employers—in their adaptation to a knowledge-based economy.