Organization Ecology
ABSTRACT
Saudi Arabia’s localization policy, Saudization, aims to decrease reliance on expatriate workers, but it has been more successful in the public sector than in the private sector. This study explores the issues involved in effectively implementing the policy in the 4- and 5-star hotel industry in Saudi Arabia. Tourism professionals, HR professionals and hotel managers were interviewed and hotel managers and employees surveyed. The research specifies the criteria for the effective implementation of Saudization, identifies the issues involved in implementing the Saudization policy in the 4- and 5-star hotel industry, determines factors and makes recommendations which could assist in implementing the policy effectively in this industry.
KEYWORDS – Saudi Arabia; localization; Saudization; hotels
INTRODUCTION
The Gulf Co-operation Council (GCC) consists of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates (Harry, 2007). All the GCC countries have high rates of unemployment among locals, but employ many expatriate workers (Singh, Jones, & Hall, 2012). Hence, localization policies have been developed to replace foreign workers with locals (Mashood, Verhoeven, & Chansarkar, 2009). Hines (2014) defines localization as “a process which reverses the trend of globalization by discriminating in favor of the local” (p.4). Saudi Arabia has the longest established localization policy of all the GCC states (Mashood et al., 2009) and forms the basis of this paper.
Non-Saudis constitute a significant proportion of the population of Saudi Arabia. For example, in 2015, from a total population of 30,770,375, almost one-third were non-Saudi, while unemployment among Saudi nationals stood at 11.5% (General Authority for Statistics, 2015). This led to the introduction in 1970 of a localization policy, termed Saudization.
However, while Saudization has been successful in terms of the high proportion of Saudi workers employed in the public sector, it has been less successful in the private sector. Why might this be? What are the issues involved in attempting to achieve the effective implementation of the localization policy in the private sector in Saudi Arabia? Rather than focusing on the private sector as a whole, this paper investigates the hotel industry (specifically 4- and 5- star hotels). Hence, the purpose of this paper is to explore the issues involved in effectively implementing the Saudization policy in the 4- and 5-star hotel industry in Saudi Arabia. The specific objectives are to:
1. Specify criteria for the effective implementation of the Saudization policy;
2. Identify issues involved in implementing the Saudization policy in the 4- and 5-star hotel industry;
3. Determine factors which could assist in implementing the policy in this industry effectively.
