Jeddah: The Saudi Arabian labor market is changing, with unemployment rates reaching record lows among the kingdom's citizens, and the nation has raised its Vision 2030 employment targets to reflect this accelerated progress.
Minister of Human Resources and Social Development Ahmed Al Raj announced at the 2024 Budget Forum that Saudi Arabia had revised its national unemployment target to 5% by 2030, falling from the 7% target.
“The unemployment rate in Saudi Arabia was 12.8% in 2018 and has now dropped to 7.1%. Vision 2030's goal was to reduce Saudi Arabia's unemployment rate to 7% by 2030.
For this reason, Crown Prince Mohammed bin Salman has directed a review of that goal and now there are new ambitions: to reduce Saudi Arabia's unemployment rate to 5% by 2030.”
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A new phase of the strategy has been submitted for approval, aimed at enhancing the Saudi Arabian labor market into a global competitiveness.
The unemployment rate among Saudi citizens fell to another 6.3% in the first quarter of 2025, according to the latest data from the Directorate of Statistics, known as Gastat. This is the lowest level on record.
Saudi Arabia's participation in the workforce has increased to 51.3%, with significant benefits among women and core working-age citizens.
Women's economic participation surpasses Vision 2030 targets
An important achievement highlighted by Al-Rajhi was the surge in the participation of Saudi women in the workforce. “Women's economic participation rate has reached 35%, exceeding the 30% Vision 2030 target by 2030.”
Gastat's 2025 quarter data support this trajectory, showing female workforce participation rate of 36.3%, while Saudi women's unemployment rate fell to 10.5%.
Among young Saudi women aged 15 to 24 years old, participation increased to 18.4%, with the population-to-population ratio rising to 14.6%.
Youssef Saidi, a researcher at the Economic Research Forum and a member of the Saudi Economic Association, told Arab News:
He added that by promoting government and private sector cooperation, we can support women entrepreneurs, address barriers, and create a robust ecosystem that promotes sustainable development.
Youth employment continues to progress and challenges remain
The unemployment rate among young people is declining, but participation rates are mixed. GASTAT data show that unemployment rates for Saudi men ages 15 to 24 have fallen to 11.6%, while labor participation has declined to 33% and employment-to-population ratio has fallen to 29.2%.
Mansoor Ahmed, an independent economic adviser, told Arab News, “Despite overall progress, the unemployment rate in young Saudi Arabia, ages 15-24, remains above the national average.”
He added that addressing this issue requires targeted policies and coordinated employment programs to integrate youth into the labour market.
Vision 2030 Reform Promotes New Opportunities
Success in lowering Saudi Arabia's unemployment rate comes from a variety of labor reform and national transformation initiatives. Ahmed said: “This achievement has been supported by robust economic policies, strategic government initiatives and sustainable labor market reform.”
He cited important enablers such as human development programs, a sharp decline in female unemployment (from 31.7% in 2018 to 10.5% in 2025), and Giga projects such as Neom, Qiddiya, Red Sea Project and Diriyah Gate.
Retail, consulting, aviation sector-specific Saudi metaplasia policy and legal services, and technology also play a role.
Looking back at the main challenges facing the country, Ahmed flagged the volatility of youth employment, saying “despite overall progress, the unemployment rate for young Saudi Arabia, ages 15-24, is higher than the national average.”
He also highlighted the wage gap between the public and private sectors, saying that many private sector positions continue to provide lower wages and benefits compared to the public sector roles, and attenuate profits among Saudi job seekers. “Closing this gap is essential to maintaining the growth of private sector employment,” he said.
Education – Laboural key to a 5% goal
The Ministry of Human Resources and Social Development has implemented 84% of its labor market strategy over the past four years, creating 300,000 jobs in professional occupations such as engineering, accounting, pharmacy and radiology.
One outstanding initiative is the WAAD National Training Program, launched in collaboration with the private sector. It offers over 1.3 million training opportunities and equips Saudi Arabia with practical skills tailored to the needs of the labour market.
The initiative illustrates how it drives targeted training and public-private collaboration employment outcomes and supports thousands of transitions into specialisation and emerging sectors.
To support these changes, the ministry is modernizing labor regulations and revising more than 38 articles to enhance flexibility and protection of the workforce. New insurance products, including domestic workers and labor market insurance, have been introduced to protect employers and employees.
“On beneficiary satisfaction: Previously, the Ministry of Labor received 60,000 visitors to the Kingdom branch each month,” Al Raj said. He added that the number has dropped to 3,000 after launching the automation service.
GASTAT data shows that 75.8% of job seekers approached their employers directly, 74.6% used the national employment platform Jadarat, and 64.5% updated their resumes on professional social media.
Al-Rajhi noted that a new phase of the strategy has been submitted for approval, with the aim of promoting Saudi Arabia's labor market to global competitiveness.
Future Workforce Focus
Ahmed emphasized that further advancement requires a holistic approach. He said a comprehensive strategy is needed to encourage greater private sector employment in Saudi Arabia beyond Saudi Arabia.
“A particularly important factor is improving alignment of educational outcomes and labor market requirements, ensuring graduates have the skills and capabilities required by the private sector,” he said.
He added that pursuing this integrated approach, “the kingdom can cultivate a noble cycle that drives more Saudi citizens to hire, develop and retain them.”
Saidi reiterated the need for stronger integration between education and labor market outcomes, highlighting the importance of incorporating new technologies into the curriculum to help students acquire relevant future skills.
He added: “Collaboration with industry leaders provides practical training opportunities, bridges the gap between education and employment, and ensures that graduates are well prepared for the demands of the modern workforce.”
The economists highlighted the need for long-term cultural change in education to promote continuous learning and adaptability. “This can be achieved by incorporating the topic of entrepreneurship education and sustainability into the curriculum and promoting the awareness and skills needed for an evolving economic situation,” he added.
Under the direction, the country recently announced that it will integrate artificial intelligence education across its public school system, starting next year.
High power sector for Saudi workers
Commenting on a sector with strong potential to quickly absorb Saudi workers, Ahmed pointed to construction and infrastructure. Healthcare – He said that by 2030, more than 30,000 new hospital beds will be needed. Tourism and hospitality, especially in its customer-facing and management roles.
Information and Communication Technology; Artificial Intelligence; and not only logistics, but retail was also highlighted. Renewable Energy; and Environmental Technology.
These sectors are being driven by Vision 2030 priorities, economic diversification efforts and aggressive government initiatives, he added. Together with this evolving landscape, Saudi Arabia said it needs to strengthen its focus on evidence-based research, innovation and targeted workforce development.
“The purpose of this transition is to address the sustained discrepancy between graduate qualifications and labor market requirements, ensuring that the national workforce has the skills and expertise necessary to thrive in a dynamic and diverse economy,” Ahmed said.
