The Impact of the Saudization Policy on Recruitment and Retention: A Case Study of the Banking Sector in Saudi Arabia

David Edgar, Areej Azhar, Dr. Peter Duncan


To reduce unemployment and reliance on expatriate workers, the Saudi Arabian government has been implementing a Saudization programme to replace expatriates with Saudis. This has succeeded in the public sector, but not in the private sector, except in banking, which is perceived as a white-collar occupation and acceptable in Saudi society. As such, this study investigates the impact of Saudization on recruitment and retention in the banking sector to see what lessons have been learned and what action is required. A systematic literature review was conducted, followed by questionnaires with 48 branch managers, and interviews with 12 Human Resource managers of key banks.

The findings show that Saudization has an impact on several aspects of recruitment and retention in the banking sector, in particular, banks must provide specific training to Saudi recruits, revise working hours and promote the attractiveness of the post. Adopting such practices can benefit Saudi banking and contribute to the fulfillment of Saudization.  


Banking; Human resource management; Saudi Arabia; Saudization.

Full Text:



Abu Elanain, M. H. (2009). Job characteristics, work attitudes and behaviors in a non-Western context. Journal of Management Development, 28(5), 457-77.

Achoui, M., & Mansour, M. (2007). Employee turnover and retention strategies: Evidence from Saudi companies. International Review of Business Research Papers, 3(3), 1-16.

Al-Ali, J. (2008). Emiratisation: drawing UAE nationals into their surging economy. International Journal of Sociology and Social Policy, 28(9-10), 365-379.

Al-Darwish, M. A., Alghaith, N., Behar, M. A., Callen, M. T., Deb, M. P., Hegazy, M. A., Khandelwal, P., Pant, M., & Qu, M. H. (2015). Saudi Arabia: Tackling Emerging Economic Challenges to Sustain Growth. Washington, D.C.: International Monetary Fund.

Al-Dosary, A. S., & Rahman, S. M. (2005). Saudization (Localization) – A Critical Review. Human Resource Development International, 8(4), 495-502.

Al-Dosary, A.S. & Rahman, S.M. (2011). Localisation in Saudi Arabia. New York: Nova.

Al-Fawzan, M. A. (2005). Assessing Service Quality in a Saudi Bank. Journal of King Saud University, 18(1), 101-115.

Al-Muharrami, S. (2009). The competition and market structure in the Saudi Arabia banking. Journal of Economic Studies, 36(5), 446-460.

Alromi, N. (2001). From School-to-Future Work Transitions: applying human capital and cultural capital production in the Saudi Arabian education system. PhD thesis submitted to Pennsylvania State University, Pennsylvania, USA.

Alshanbri, N., Khalfan, M., & Maqsood, T. (2014). Nitaqat program in Saudi Arabia. International Journal of Innovative Research in Advanced Engineering, 1(10), 357-366.

Alshathry, S., O'Donohue, W., Wickham, M., & Fishwick, S. (2014). National Culture as an Influence on Perceptions of Employer Attractiveness. AT Business Management Review, 10(1), 101-111.

Alsheikh, H. M. (2015). Current progress in the nationalisation programmes in Saudi Arabia. Jeddah: European University Institute and Gulf Research Center.

Baqadir, A. A. (2013). A skills gap between industrial education output and manufacturing industry labour needs in the private sector in Saudi Arabia. Ph.D. thesis submitted to the University of Glasgow, UK.

Baqadir, A., Patrick, F., & Burns, G. (2011). Addressing the skills gap in Saudi Arabia: does vocational education address the needs of private sector employers? Journal of Vocational Education & Training, 63(4), 551-561.

Bearden, W. O., Money, R. B., & Nevins, J. L. (2006). Multidimensional versus unidimensional measures in assessing national culture values: The Hofstede VSM 94 example, Journal of Business Research, 59(2), 195-203.

Braun, V., & Clarke, V. (2006). Using thematic analysis in psychology. Qualitative Research in Psychology, 3(2), 77-101.

Budhwar, P. S., & Mellahi, K. (Eds.). (2006). Managing human resources in the Middle-East. London: Routledge.

Cassell, M. A., & Blake, R. J. (2012). Analysis of Hofstede's 5-D model: the implications of conducting business in Saudi Arabia. International Journal of Management & Information Systems (IJMIS), 16(2), 151-160.

CIPD (Chartered Institute of Personnel and Development) (2015a). Recruitment Factsheet. London: CIPD

CIPD (Chartered Institute of Personnel and Development) (2015b). Employee Turnover and Retention Factsheet. London: CIPD

Davis, N., & Hayashi, C. (2007). The Gulf Cooperation Council (GCC) Countries and the World: Scenarios to 2025: Implications for Competitiveness. Retrieved 12 June, 2015, from Global_Competitiveness.../3_1.pdf.

de Vaus, D. A. (2002). Surveys in Social Research (5th ed.). Crow's Nest, Australia: Allen and Unwin.

DLA Piper (2012). Be Aware: Focus on Kingdom of Saudi Arabia. Retrieved 1 December, 2015, from PublicationAttachment/c8a4d367-e2f0-4df4-83c4-8b94cf0e0e88/Be_Aware_Middle_East_June_2012.pdf

Du Plessis, A.J. (2007). Change, organizational development and culture: human resource management's role in a future South Africa. International Review of Business Research Papers. 3(1), 1-10.

Eagle, L. (2011). Making Their Mark: Women Working in the Middle Eastern Financial Industry. Retrieved 29 December, 2015, from

Fakeeh, M. S. (2009). Saudization as a Solution for Unemployment: The Case of Jeddah Western Region. PhD thesis submitted to the University of Glasgow, UK.

Forstenlechner, I. (2009). Workforce localization in emerging Gulf economies: the need to fine-tune HRM. Personnel Review, 39(1), 135 – 152.

Gerhart, B., & Fang, M. (2005). National culture and human resource management: assumptions and evidence. The International Journal of Human Resource Management, 16(6), 971-986. 09585190500120772

Global Investment House (2006). Saudi Arabia Banking Sector. Kuwait: Global Investment House.

Guest, G., MacQueen, K. M., & Namey, E. E. (2011). Applied thematic analysis. Thousand Oaks: Sage.

Günsoy, C., Cross, S. E., Uskul, A. K., Adams, G., & Gercek-Swing, B. (2015). Avoid or fight back? Cultural differences in responses to conflict and the role of collectivism, honor, and enemy perception. Journal of Cross-Cultural Psychology, 46(8), 1081-1102.

Harkness, J. A., & Schoua-Glusberg, A. (1998). Questionnaires in translation. ZUMA-Nachrichten Spezial, 3(1), 87-127.

Hines, C. (2003). Time to replace globalization with localization. Global Environmental Politics, 3(3), 1-7.

Hofstede, G. (1984). Culture's Consequences: International Differences in Work-related Values (2nd ed.). Beverly Hills, CA: Sage.

Hofstede, G. (2002). Dimensions do not exist: a reply to Brendan McSweeney. Human Relations, 55(11), 1355-1361.

Hofstede, G. (2015). National Culture - Countries. Retrieved 20 November, 2015, from

Hofstede, G., & Hofstede, G. J. (2005). Cultures and organizations: software of the mind (2nd ed.). New York: McGraw-Hill.

Hofstede, G., Hofstede, G. J., & Minkov, M. (2010). Cultures and Organizations: Software of the Mind, 3rd ed. New York: McGraw-Hill.

Hofstede, G. (2015). National Culture - Countries. Retrieved 21 November, 2015, from

Howitt, D., & Cramer, D. (2007). Introduction to research methods in psychology. Harlow: Pearson Education.

Huang, X. & Van de Vliert, E. (2004). Job level and national culture as joint roots of job satisfaction. Applied Psychology, 53, 329-48.

Idris, A. (2007). Cultural barriers to improved organizational performance in Saudi Arabia. SAM Advanced Management Journal, 72(2), 36-54.

Jadwa Investment (2015). Saudi Labour Market Outlook. Retrieved 2nd December, 2015, from

Jones, M. (2007). Hofstede – Culturally questionable? Paper presented at the Oxford Business and Economics Conference Oxford, UK, 24-26 June, 2007.

Kumar, R., & Uzkurt, C. (2010). Investigating the effects of self-efficacy on innovativeness and the moderating impact of cultural dimensions. Journal of International Business and Cultural Studies, 4(1), 1-15.

Leeth, J. (2014). Integrating Saudi Women into the Workforce Brings Challenges. Virginia, USA: Society for Human Resource Management.

Looney, R. (2004). Saudization and Sound Economic Reforms: Are the Two Compatible? Strategic Insights, 3(2). Retrieved 2nd November, 2015, from

McDowell, A. (2012). More that 1 million Saudis on unemployment benefit. Retrieved 16 November, 2015, from

McEnhill, D., Perry, N., & Sherlock, D. (2007). New Skills for Saudi Arabia: A review of provision for improving workskills. Coventry: British Council.

McSweeney, B. (2002). Hofstede's model of national cultural differences and their consequences: A triumph of faith - a failure of analysis. Human Relations, 55(1), 89-118. 5001602

Mellahi, K. &Wood, G.T. (2010). Human resource management in Saudi Arabia. In P. S. Budhwar & Y.A. Debrah (Eds.), Human Resource Management in Developing Countries (pp. 135-153). London: Routledge.

Merriam, S. (1988). Case Study Research in Education: A Qualitative Approach. San Francisco: Jossey-Bass, pp. 4-25.

Moser, S., Swain, M., & Alkhabbaz, M. H. (2015). King Abdullah Economic City: Engineering Saudi Arabia's post-oil future. Cities, 45, 71-80.

Naithani, P., & Jha, A.M. (2010). Challenges Faced by Expatriate Workers in Gulf Cooperation Council Countries. International Journal of Business and Management. 5(1), 98-103.

Oxford Business Group (2007). The Report: Saudi Arabia 2007. London: OUP.

Oxford Strategic Consulting (2013). Maximising the Employment of Saudi Females. Retrieved 28 November, 2015, from

Patrick, F. (2014). Making the transition to a 'knowledge economy'and 'knowledge society'. In A. W. Wiseman, N. H. Alromi, and S. Alshumrani (eds.), Education for a Knowledge Society in Arabian Gulf Countries, Bingley, UK: Emerald Group Publishing Limited, pp. 229-251. 24018

Potter, C. C. (1989). Effective Localisation of the Workforce: Transferring Technology in Developing Countries. Journal of European Industrial Training, 13(6), 25-30.

Ramady, M. A. (2010). The Saudi Arabian economy: policies, achievements and challenges (2nd ed.). New York: Springer.

Ramady, M. (2013). Gulf unemployment and government policies: Prospects for the Saudi labour quota or Nitaqat system. International Journal of Economics and Business Research, 5(4), pp. 476-498.

Randeree, K. (2009). Strategy, Policy and Practice in the Nationalisation of Human Capital: 'Project Emiratisation'. Research and Practice in Human Resource Management, 17(1), pp. 71-91.

Randeree, K. (2012). Workforce Nationalization in the Gulf Cooperation Council States. Doha: Georgetown University School of Foreign Service in Qatar.

Sadi, M. A. (2015). Labor market and the job nationalization policy: a trajectory of hospitality and tourism strategy in Saudi Arabia. European Online Journal of Natural and Social Sciences, 4(2), 414-426.

Salih, A. (2010). Localizing the Private Sector Workforce in the Gulf Cooperation Council Countries: A Study of Kuwait. International Journal of Public Administration. 33(4), 169-181. 90903304183

SAMA (Saudi Arabian Monetary Agency) (2014). Fiftieth Annual Report. Riyadh: SAMA,

SAMA (Saudi Arabian Monetary Agency) (2015b). Financial Stability Report. Retrieved 1 December, 2015, from STABILITY%20REPORT-2015.pdf

SAMA (Saudi Arabian Monetary Agency) (2015c). Quarterly Statistical Bulletin. Riyadh: SAMA Retrieved 2 December, 2015, from Monthly_Bulletin_AREN_OCT.PDF

SAMA (Saudi Arabian Monetary Agency) (2015d). Annual statistics. Retrieved 3 December, 2015, from

Saudi Central Department of Statistics (2014). Population. Retrieved 20 November, 2015, from

Saudi Ministry of Labour (2014), Guide to Nitaqat Bands, Available from (accessed 20 November 2015).

Saunders, M., & Lewis, P. (2012). Dong Research in Business and Management. Harlow: Pearson Education Ltd.

Schermerhorn, J., Hunt, J., & Osborn, R. (2004). Core Concepts of Organizational Behavior. Hoboken/Chichester: John Wiley & Sons.

Sekaran, U., & Bougie, R. (2010). Research Methods for Business: A Skill Building Approach, Hoboken/Chichester: John Wiley and Sons.

Soares, A. M., Farhangmehr, M., & Shoham, A. (2007). Hofstede's dimensions of culture in international marketing studies. Journal of Business Research, 60(3), 277–284.

Stephenson, M. L., Russell, K. A., & Edgar, D. (2010). Islamic hospitality in the UAE: indigenization of products and human capital, Journal of Islamic Marketing, 1(1), pp. 9-24. 26196

Sullivan, K. (2012, November 13). Saudi Arabia struggles to employ its most-educated women. The Independent. Retrieved 4 November, 2015, from

Whiteoak, J.W., Crawford, N.G., & Mapstone, R. H. (2006). Impact of Gender and Generational Differences in Work Values and Attitudes in an Arab Culture, Thunderbird International Business Review, 48(1), 77-91.

Yin, R.K. (2009). Case Study Research: Design and Methods (4th ed.). Thousand Oaks: Sage.

Zhang, Y., & Wildemuth, B. (2009). Unstructured interview. In B. Wildemuth (Ed.), Applications of Social Research Methods to Questions in Information and Library Science (pp. 222-231). Westport, CT: Libraries Unlimited.



  • There are currently no refbacks.

Copyright (c) 2016 Journal of Business

Creative Commons License
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License.