Women's employment in Saudi Arabia: A major challenge
Source: BI-ME , Author: BI-ME staff
Posted: Tue March 30, 2010 11:41 am

SAUDI ARABIA. From international legislative commitments to NGOs dedicated to women’s welfare, Saudi Arabia’s policies and programmes are promising steps on the road to women’s full participation in its labour market.

However, with less than 15% of its national workforce made up of women, the Kingdom has still an enormous source of untapped potential for its labour force, which currently relies heavily on expatriates.

Legislative, social, educational and occupational constraints prevent women from fully participating in the Saudi labour market.

Overcoming these constraints will be essential if the kingdom is to create a dynamic market economy.

Sweeping reforms will have to be introduced to the national educational system as a major step in preparing Saudi women for competitive jobs.

Labour market reforms and labour law reforms should be implemented; with the creation of a supportive environment encouraging the design of programmes that emphasise the positive role of Saudi women in the labour market and introduce women to senior labour market positions, according to a new report by Booz & Company.

Since 1992, women’s participation rate in the Saudi national labour force has nearly tripled, from 5.4% to 14.4%.

However, this represents one of the lowest levels of national female participation in the labour force in the region: the UAE’s national female participation rate is 59%; Kuwait’s is 42.49%, Qatar’s is 36.4%, Bahrain’s is 34.3% and Malaysia’s is 46.1%. In addition, the 26.9% unemployment rate for Saudi females in the labour force in 2008 was nearly four times higher than that for Saudi males.

Although over 90% of Saudi women actively participating in the workforce hold a secondary qualification or a university degree, this does not guarantee employment: 78.3% of unemployed women are university graduates, and more than 1,000 have a doctorate degree. By contrast, 76% of unemployed men have only a secondary education or less.

“In 2007, 93% of all female university graduates specialised in education and humanities, while a shortage of jobs in those fields has resulted in Saudis seeking work abroad. More than 300 Saudi female graduates have already accepted teaching jobs in Kuwait, Qatar, and Bahrain,” said Dr Mona AlMunajjed, senior advisor with Booz & Company’s Ideation Centre in Riyadh.

Uneducated women are even more challenged, especially in rural areas. In 2007, UNESCO estimated that 20.6% of Saudi women over the age of 15 were illiterate.

With only three per cent of female illiterates finding an active role in the labour market, over one million Saudi women find themselves unable to enter the labour market due to lack of education or appropriate skills.

Unemployment is highest in the region of Hael where it reached 35%, followed by the Eastern Region at 32 per cent, Makkah al Mukarramah at 29%, Al Madinah al Munawwarah at 28%, the region of Asir at 23% and the lowest, Al Qassim, at 17%.

Although Al Qassim is a conservative region, it has a number of educated women who are working as teachers in schools and at the university, mainly in the public sector.

Saudi laws based on the Shari’a guarantee a woman’s right to work, but stipulate that she should work in an appropriate environment – i.e., not mixing with men or being exposed to harassment.

“Occupation gender segregation in professional jobs is therefore prevalent. Women are concentrated in professions that are seen as feminine and remain in less distinguished positions than men,” explained AlMunajjed.

The public sector is the largest employer of Saudi women, and women currently make up around 30% of government employees. Around 95% of working Saudi women are in the public sector: 85% in education – in both teaching and administrative positions, six per cent in public health, and four per cent in administration.

Only five per cent of working Saudi women are employed by the private sector, and the majority work in a narrow range of jobs such as private business and banking. However, the number of Saudi women working in the private sector increased by 27% over two years, from 40,000 at the beginning of 2006 to 51,000 at the end of 2007.

The number of Saudi women working in the banking sector has increased dramatically by 280%, from 972 in 2000 to 3,700 in 2008.

The majority of Saudi women working in the private sector are concentrated in urban areas, including 39% in the Riyadh region, 25% in the region of Makkah al Mukarramah, 24% in the Eastern Region, five per cent in the region of Al Madinah al Munawwarah, and only two per cent in the regions of Al Qassim and Assir.

In addition, Saudi women manage their own business investments and enterprises, with 97% in wholesale and retail trade, finance and business services, and construction.

Saudi women also own 12% of the firms in the country and 16% of the large manufacturing firms. However, although the need for a wakil, or male guardian to enter into business transactions was officially overturned in a groundbreaking decision by the government, the implementation of this change is lagging and women still need the permission of a wakil.

“Saudi Arabia has taken many positive steps aimed at promoting women’s advancement within the labour market,” AlMunajjed noted. At the international level, the Kingdom has ratified three United Nations conventions that promote gender equality in the workforce.

At the national level, the government has taken a number of promising legislative steps. The Saudi labour code grants every citizen the right to work, and stipulates that firms must provide all workers opportunities for training.

A 2004 regulation established women’s sections within the government and employment and training initiatives. In 2006 the labour code was revised to include measures relating to maternity and medical care leave, nurseries, vacation and pension provision.

The Kingdom’s Saudisation policy has identified positions particularly suitable for women, such as receptionists, tailors, banquet-hall employees, nutritionists, governesses, photographers, beauticians, caterers, and hospitality and recreation-industry workers.

The Eighth Five-Year Development Plan (2005–2010) emphasised the need for more employment and advancement opportunities for women, stressing the importance of their participation in the economy. In 2007, plans were announced to allocate one-third of government jobs to Saudi women and to create additional job opportunities for them.

Government initiatives focusing on job creation and training include telecommuting arrangements, plans to establish 17 technical colleges for women and the opening up of the tourism industry to women.

In addition to these government initiatives, various non-governmental organisations have led efforts to create economic opportunity for poor and uneducated women in urban and rural areas through vocational training and small business loans.

While the Saudi government is making major efforts to improve the status of women in terms of employment, a number of social, legislative, educational, and occupational factors continue to hinder the full participation of Saudi women in the labour market, thereby preventing the Kingdom from reaching its full economic potential.

“Since women’s role within Saudi society has traditionally been that of wife and mother, the move toward greater female participation in the labour force has been met with scepticism, debate, and even hostility,” said AlMunajjed.

Full implementation of women’s rights to participate in the workforce lags on existing legislation at both the international and national levels. While rights exist in theory, they have largely been unenforced. Another legal constraint is the fact that women are not permitted to drive, making it difficult for them to commute to work without a male driver.

The lack of good quality basic education for females lies at the heart of labour market segmentation. The public sector educational system does not provide girls with the skills they need to compete in the labour market. It relies on rote learning, and does not sufficiently promote analysis, skills development, problem solving, communication and creativity.

There is also a shortage of education in areas vital to the development of the new knowledge-based economy, such as mathematics, science, technology and computer literacy.

Occupational segregation is strongly evident in the Saudi labour market, with women largely restricted to traditionally female-orientated fields in the public sector.

There is a lack of opportunities for women in decision-making and management positions; less than one percent of decision-making posts are held by Saudi women. Family-friendly policies including flexible working hours, parental leave, child-care facilities, and transport are not in place.

Trade unions are not permitted in Saudi Arabia, so women do not have a mechanism to fight for or protect their rights. The problem is compounded by the lack of a specialised women’s unit at the Ministry of Labour and the dearth of women appointed to positions within the Saudi legal system.

In addition, the absence of complete and updated socio-demographic and employment data on women hinders socio-economic planning and future labour-market policies.

Saudi Arabia’s women represent an untapped and important source of power for the economy. Although incorporating women fully into the labour market may not be achieved overnight, it can—and must—be achieved if the Kingdom is to transition to a knowledge-based economy.

“To this end, the Saudi government needs to ratify, enforce, and implement legislation that promotes equal participation in the labour market, implement policies that create employment opportunities for women, and establish institutional mechanisms that promote women’s wellbeing and success in the workforce,” AlMunajjed commented. Specific policy recommendations to enhance women’s employment are proposed below.

At national policy level the government should:

• Develop a national plan of action and policy formulation for working women, targeting women’s participation in the labour market, upgrading their levels of literacy and education, and increasing capacity building and vocational training. The government should form partnerships with civil society, NGOs and the private sector for the implementation and follow-up of the action plan.

• Launch a national taskforce to assess the needs of women in the labour market. This taskforce would facilitate the exchange of information and raise awareness about employment issues, exploring the needs of women in urban and rural areas, a key step in diagnosing and treating existing problems and creating a comprehensive framework for action.

Once established, that framework needs to be energetically implemented across every sector of society and the government should ensure that every aspect of labour policy is strictly evaluated, monitored and modified based on feedback as well as on the evolving needs of the market.

• Work to raise public awareness about the positive role that women play within the labour market, as well as their rights, opportunities, and successes.

• Ensure that women are represented at top decision-making levels, across every sector and region. Women should be encouraged and prepared to assume highly visible positions, and selected to represent the Kingdom at regional and international meetings.

• Facilitate the development of a system of transportation services for women that enables them to commute to work without the help of a driver or a male family member.

As the entity that is most directly responsible for setting employment policy, the Ministry of Labour has the opportunity to assume a vital role in improving the role of women in the Saudi labour market. A critical first step in achieving this goal is the establishment of a Special Bureau for Women’s Affairs within the Ministry, creating a framework for policy and establishing the direction of future research.

Without a strong legal foundation, policies crumble and the Ministry of Labour should ensure that national and international labour laws are enforced and implemented, including legislation to ensure gender equality in recruitment, employment and compensation, as well as social security coverage and family-friendly policies. At the policy level, the Ministry should:

• Implement infrastructural support for working women, including flexible hours, parental leave, and child-care facilities, and expand the availability of nurseries in workplaces.

• With the Ministry of Education, create centres that offer career guidance and development services for women joining the labour market.

• Establish a timetable for implementation and a framework for monitoring progress and modifying programmes based on evaluation and feedback, ramping up data collection and employing up-to-date statistical techniques. Data collection should include household surveys in urban and rural areas, and institutions across all sectors of the labour market should be analysed in regard to the skills in demand.

The Ministry of Education has a valuable opportunity to assume a leadership role in reforming and improving the Saudi public educational system so that it produces a robust, capable labour force that prepares girls for the labour market. To accomplish this, the Ministry of Education should:

• Reform the curriculum so that learning materials emphasise the ability to identify, analyse and solve problems and to adapt to new tasks, with an eye towards gender-sensitivity by highlighting women succeeding in a variety of professions, including those traditionally associated with men.

• Prepare women to work in fields such as information technology and engineering.

• Offer open-entry/open-exit courses and distance-learning opportunities at women’s universities in major cities and provinces and revise their curriculum to portray women as a vital part of the country’s economic development.

• Encourage the creation of a culture of continuous education and training for women.
The Ministry of Commerce and Industry can play a critical role in Saudi Arabia’s economic progress by leading efforts to incorporate women into the labour market. The Ministry of Commerce should:

• Enforce and implement the 2004 decision to eliminate the wakil requirement.

• Encourage private institutions and funds to support women’s economic growth through loans and grants.

• Encourage and promote cross-sector partnerships.

• Encourage entrepreneurship for low-income women through the development of microfinance programmes and, with the Ministry of Social Affairs, support women’s traditional income-generating activities such as food processing and marketing and the production of handicrafts.

• Establish training programmes to empower women with confidence, skills, expertise and technical know-how to advance to managerial, decision-making positions.

As Saudi Arabia looks to develop a knowledge-based economy, it has to invest in the education and training of all of its citizens. “Women represent a valuable yet untapped source of energy for the new economy. Investing in women’s education, training and professional assimilation will yield enormous rewards, both today and far into the future,” said AlMunajjed.

The measures proposed above will ensure that the Saudi labour market is robust, capable and equipped to deal with tomorrow’s challenges—and reap its opportunities.

For the Ideation Center, Booz & Company’s leading think tank in the Middle East, visit www.ideationcenter.com.

Visit www.booz.com and www.booz.

 

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