“A Decade of Progress” Report: An In-Depth Look at the Transformations of the Saudi Labor Market
A recent international report titled “A Decade of Progress ,” published by the International Labour Conference in collaboration with the World Bank Group and the Saudi Ministry of Human Resources and Social Development, reveals three major transformations that have fundamentally reshaped the Saudi Arabian labor market over the past decade. The report provides a comprehensive analysis of the market's trajectory, documenting the tangible achievements made since the launch of Saudi Vision 2030, which laid out an ambitious roadmap for economic diversification, strengthening the private sector, and empowering national talent.
Historical context: From dependence on oil to a diversified economy
These transformations come within the context of the Kingdom's ongoing efforts to overcome the traditional economic challenges of relying on oil as the primary source of income. Prior to the launch of Vision 2030, the Saudi economy was heavily reliant on the public sector as the main employer of citizens, while the private sector depended heavily on expatriate labor. The Vision aimed to change this dynamic through broad structural reforms, including developing regulations and legislation, stimulating investment, and, most importantly, investing in Saudi human capital to enable it to compete and drive development in the future economy.
First transformation: Revitalizing the labor market and promoting inclusivity
The report documents a significant expansion in the size of the productive workforce, with economic participation rates projected to reach 67.1% by 2025. This growth was not only quantitative but also qualitative and comprehensive, as the overall unemployment rate fell sharply to 2.8%, reflecting the success of policies in transforming large numbers of the economically inactive into a productive workforce. The participation of Saudi women is the most prominent story in this transformation, with the female employment rate jumping from 11% in 2015 to 32% in 2025, and the employment rate of single mothers rising from 8% to 45% during the same period, reflecting a profound social and economic shift.
The second transformation: The dynamics of the private sector as a key driver of employment
The report observes a structural shift in the role of the private sector, which has become the primary driver of job creation for Saudi citizens. By the second quarter of 2025, the percentage of Saudis employed in the private sector reached 52.8%. This transformation would not have been possible without improvements in the business environment and increased competitiveness within the sector. A key indicator of this is the improved alignment between educational outcomes and job requirements, rising from 41% in 2015 to 62% in 2025, thus reducing the skills gap and enhancing market efficiency. The report also highlights the significant growth in the role of micro-enterprises, whose share of total employment increased from 6% to 26%, demonstrating the dynamism of entrepreneurship.
The third transformation: profound changes in social values associated with work
The reforms were not limited to the economic sphere; they extended to fundamental shifts in societal attitudes toward work. The percentage of people unwilling to work dropped from 49% to just 12%, and the gap in preference between the public and private sectors narrowed considerably. For example, the percentage of men seeking government jobs exclusively fell from 60% to 10%, and among women from 48% to 22%. Social norms surrounding women's employment also underwent a significant transformation, with increased acceptance of women working in mixed-gender environments, thus opening up vast opportunities for them in the private sector.
Significance and Impact: A Regional Model and International Influence
These transformations are of paramount importance both domestically and internationally. Domestically, they contribute to building a more sustainable and stable economy and enhance social welfare. Regionally, the Saudi experience offers a successful model that other countries in the region can learn from in addressing similar challenges related to economic diversification and youth employment. Internationally, the World Bank underscores the significance of this experience. Cristóbal Redao Cano, the World Bank’s Director of Social Protection and Labor Market Practices, stated, “The private sector has become one of the main drivers of new job growth in the Kingdom, in line with its vision for economic diversification.” He also noted the potential for transferring the knowledge gained from the Saudi transformation model to other countries, placing the Kingdom at the heart of the global dialogue on the future of labor markets.
