Saudi Arabia scales back expat salary premiums as hiring patterns shift: Report

Riyadh: Saudi companies are reducing salary premiums for expatriate workers as employers reassess hiring needs across major development projects, according to recruitment trends reported by Reuters.

Firms that previously offered sizeable incentives to attract foreign talent are now issuing packages aligned more closely with market rates.

“What you get is employers rethinking packages. That definitely has happened,” Magdy Al Zein, managing director at Boyden, told Reuters.

Recruiters say the slowdown is most evident in:

• Construction
• Infrastructure
• Large engineering-driven developments

Several projects have slowed or adjusted their schedules, prompting firms to become more selective in their staffing decisions.

Specialised tech roles continue to draw demand

While some sectors are cooling, hiring remains active in fields critical to Saudi Arabia’s digital and industrial objectives, including:

• Artificial intelligence
• Cybersecurity
• Logistics and supply chain
• Advanced manufacturing

However, salary packages in these fields are increasingly tied to performance metrics rather than upfront premiums.

Localisation expands the talent pool

As more Saudi nationals enter the private sector through localisation programmes, competition for mid- and senior-level roles has strengthened. The growing domestic workforce has reduced reliance on expatriates, especially in positions involving:

• Management
• Technical expertise
• Project leadership

UAE–Saudi salary gap narrows

Additionally, the financial gap between salaries in Saudi Arabia and the United Arab Emirates (UAE) has narrowed. As a result:

• Fewer professionals are relocating from Dubai or Abu Dhabi
• Expat mobility has slowed
• The incentive to move for higher pay has weakened

Saudi jobs market shifts under Vision 2030

Saudi Arabia is advancing its Vision 2030 strategy, which aims to broaden the country’s economic base and expand non-oil industries.

Key elements of recent activity include:

• Mega-projects: Progress at NEOM, the Red Sea development, Qiddiya and emerging industrial zones.
• Sector priorities: Growth in technology, logistics, advanced manufacturing, tourism and mining.
• Labour reforms: New training pathways, updated employment regulations and increased private-sector participation for Saudi nationals.
• Salary patterns: Market surveys for 2025 indicate moderate wage growth of between 2 percent and 5 percent across most sectors.
• Hiring trends: More structured recruitment processes, stricter budgeting and a stronger emphasis on specialist skills.

These shifts have contributed to a more selective approach to expatriate compensation across the kingdom, reflecting new market realities and evolving workforce dynamics.