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Saudi Arabia is undergoing a rapid economic transformation, driven by its Saudization plan to diversify the economy and reduce its reliance on oil. A key component of this plan is to improve the quality of the workforce and attract more skilled workers.
One way that Saudi Arabia is doing this is through the Skill Verification Program (SVP). The SVP is a mandatory program for all foreign workers in the private sector, which requires them to pass a skills test in order to obtain a work visa or renew their existing visa.
The SVP, which was launched in July 2021, has already had a significant impact on the Saudi labor market. In the first year of the program, over 2 million foreign workers took the skills test and over 1 million passed!
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What is the Skills Verification Program?
The Skills Verification Program is a standardized test that assesses the skills and knowledge of foreign workers in a variety of professions. The test is based on the national occupational standards for each profession and is designed to ensure that workers have the skills they need to be successful in their jobs.
The SVP test is divided into two parts: a theoretical exam and a practical exam. The theoretical exam covers topics such as safety, regulations, and basic skills. The practical exam assesses the worker's ability to perform the tasks required for their job.
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Impact of the Skills Verification Program
1. Enhancing the Quality of Workers
In a world where talent is the key to success, the SVP is giving Saudi Arabia a competitive edge. By attracting and retaining the most skilled workers from around the globe, Saudi Arabia is well-positioned to achieve its Vision 2030 goals and build a prosperous future for all.
The first potential impact of the Skills Verification Program (SVP) is an increase in the quality of workers in the private sector. By ensuring that all foreign workers have the necessary skills and experience, the SVP will help to improve productivity and competitiveness.
A study by the Saudi Ministry of Human Resources and Social Development found that businesses that employed certified workers were 15% more productive than businesses that did not. The study also found that certified workers were less likely to make mistakes and were more likely to be satisfied with their jobs.
The SVP is expected to have a similar impact on the Saudi labor market. By ensuring that all foreign workers have the necessary skills, the SVP will help businesses to improve their productivity and competitiveness. This will lead to economic growth and job creation for Saudi nationals.
The SVP is also expected to attract more skilled foreign workers to Saudi Arabia. By demonstrating that the Saudi government is committed to hiring qualified workers, the SVP will make it easier for the country to attract the talent it needs to achieve its economic goals.
Here are some specific examples of how the SVP is expected to improve the quality of workers in the private sector:
- Reduced turnover: Certified workers are more likely to be satisfied with their jobs and less likely to leave their jobs. This will reduce turnover costs for businesses and improve employee morale.
- Increased productivity: Certified workers have the skills and knowledge they need to perform their jobs effectively. This leads to increased productivity and profitability for businesses.
- Improved safety: Certified workers are less likely to make mistakes that can lead to accidents. This improves safety in the workplace and reduces costs for businesses.
- Enhanced customer service: Certified workers are better able to understand and meet the needs of customers. This leads to improved customer satisfaction and increased sales for businesses.
Overall, the SVP is expected to have a positive impact on the quality of workers in the Saudi private sector. This will lead to increased productivity, competitiveness, and economic growth.
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2. Reducing the number of unskilled workers
The second potential impact of the SVP is a reduction in the number of unskilled workers in the Saudi labor market. This will free up jobs for Saudi nationals and help to reduce the country's unemployment rate.
Prior to the implementation of the SVP, there were a significant number of unskilled foreign workers in the Saudi labor market. This was due to a number of factors, including the ease of obtaining work visas and the relatively low wages paid to unskilled workers.
However, the SVP has made it more difficult for unskilled foreign workers to obtain work visas. In addition, the Saudi government has introduced a number of other initiatives to encourage businesses to hire Saudi nationals, such as subsidies and tax breaks.
As a result of these initiatives, the number of unskilled foreign workers in the Saudi labor market has decreased significantly. According to a Saudi Arabia Labor Force survey, there were over 3 million unskilled foreign workers in Saudi Arabia before the SVP was implemented. By the end of 2022, this number had fallen to less than 2 million.
This reduction in the number of unskilled foreign workers has freed up jobs for Saudi nationals. As a result, the unemployment rate for Saudi nationals has fallen from 12% in 2021 to 10% in 2022.
The SVP is also expected to have a long-term impact on the Saudi labor market. By reducing the number of unskilled foreign workers, the SVP is helping to create a more skilled and productive workforce. This will make the Saudi economy more competitive and attractive to foreign investment.
Here are some specific examples of how the SVP is expected to reduce the number of unskilled workers in the Saudi labor market:
- Reduced supply of unskilled workers: The SVP is making it more difficult for unskilled foreign workers to obtain work visas. This will reduce the supply of unskilled workers in the Saudi labor market.
- Increased demand for skilled workers: The Saudi government is encouraging businesses to hire Saudi nationals by offering subsidies and tax breaks. This is increasing the demand for skilled workers in the Saudi labor market.
- Improved skills training: The Saudi government is investing in skills training programs for Saudi nationals. This is helping to create a more skilled workforce that can meet the needs of the Saudi economy.
Overall, the SVP is expected to have a positive impact on the Saudi labor market by reducing the number of unskilled workers and increasing the number of skilled workers. This will lead to a more productive and competitive economy.
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4. Making the Saudi labor market more attractive to foreign workers
The SVP sends a clear message to the world that Saudi Arabia is serious about attracting and retaining the best and brightest workers. By ensuring that all foreign workers meet rigorous skills standards, the SVP is raising the bar for the entire Saudi workforce. This is creating a more competitive and attractive environment for foreign workers, who are now more likely to see Saudi Arabia as a place where they can thrive.
As a result, the third potential impact of the SVP is to make the Saudi labor market more attractive to foreign workers. By demonstrating that the Saudi government is committed to hiring qualified workers, the SVP will make it easier for the country to attract the talent it needs to achieve its economic goals.
Prior to the implementation of the SVP, many foreign workers were reluctant to come to Saudi Arabia due to the uncertainty of the job market and the lack of transparency in the hiring process. However, the SVP has made the Saudi labor market more predictable and transparent for foreign workers.
Under the SVP, foreign workers know exactly what skills and experience they need to have in order to obtain a work visa and work in Saudi Arabia. This makes it easier for foreign workers to plan their careers and make decisions about whether or not to come to Saudi Arabia.
The SVP has also made the Saudi labor market more attractive to foreign workers by improving working conditions and benefits. For example, the Saudi government has recently introduced a new law that guarantees foreign workers the right to change jobs and leave the country without permission from their employers.
Overall, the SVP is expected to make the Saudi labor market more attractive to foreign workers by:
- Improving predictability and transparency: The SVP makes it easier for foreign workers to know what skills and experience they need to have in order to obtain a work visa and work in Saudi Arabia.
- Improving working conditions and benefits: The Saudi government has recently introduced a number of reforms to improve working conditions and benefits for foreign workers, such as the right to change jobs and leave the country without permission from their employers.
- Demonstrating a commitment to hiring skilled workers: The SVP demonstrates that the Saudi government is committed to hiring skilled workers. This makes Saudi Arabia a more attractive destination for foreign workers who are looking for good job opportunities and a high standard of living.
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By making the Saudi labor market more attractive to foreign workers, the SVP is helping the country to attract the talent it needs to achieve its economic goals. This will lead to economic growth and job creation for both Saudi nationals and foreign workers.
Here are some specific examples of how the SVP is expected to make the Saudi labor market more attractive to foreign workers:
- Increased job satisfaction: Foreign workers who know that they have been hired for their skills and experience are more likely to be satisfied with their jobs. This leads to reduced turnover and improved employee morale.
- Improved work-life balance: The new law that guarantees foreign workers the right to change jobs and leave the country without permission from their employers will give foreign workers more flexibility and control over their careers. This will improve their work-life balance and make Saudi Arabia a more attractive place to live and work.
- Enhanced reputation: The SVP is helping to improve Saudi Arabia's reputation as a country that is committed to hiring skilled workers and protecting the rights of foreign workers. This will make Saudi Arabia a more attractive destination for foreign workers from all over the world.
Overall, the SVP is expected to help the country to attract the talent it needs to achieve its economic goals and create a more prosperous future for all.
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Final Thoughts
The SVP is still in its early stages of implementation, but its impact is already being felt. The unemployment rate for Saudi nationals has fallen significantly since the SVP was introduced, and businesses are reporting that they are more productive and competitive as a result of having a more skilled workforce.
As the SVP continues to be implemented and refined, its impact is only going to grow stronger. The SVP is poised to play a major role in transforming Saudi Arabia into a global economic powerhouse.
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