Challenges and Opportunities in Employing Locals in the Construction Industry: Saudi Arabia Case

The construction industry in Saudi Arabia represented around 5.5% of the gross domestic product (GDP) in 2019 and employed around 26.4% of the total workforce in the Saudi private sector; however, only 12.5% of the construction workers are locals. In 2020, unemployment has reached 15.4% among Saudi nationals. Concurrently, approximately 6.7 million workers in the Saudi private sector are non-locals. This paper investigates the challenges and opportunities of employing locals in the construction industry. A quantitative analysis of the public statistics is conducted to determine the genuine challenges and potential opportunities in replacing non-locals with locals in the construction industry. The analysis reveals that although most of the Saudi construction industry workforce (87.5%) are non-local, the construction industry practically can accommodate around 9.5% of unemployed Saudis annually based on the current distribution of unemployed Saudis and the construction labor market. The analysis, also reveals that most unemployed Saudis are college graduates with majors that do not fit to find, suitable jobs in the construction industry. Among the findings that the Saudi construction industry will continue to need a non-Saudi workforce. Furthermore, though most unemployed Saudis are college graduates, there is a shortage of Saudis with appropriate training and academic majors.