Saudi Arabia scales back salary premiums for foreign talent, recruiters say
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At one point, foreigners could negotiate premiums of 40 per cent or more, sometimes even double their existing salaries, for a job in Saudi Arabia.
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ABU DHABI - Saudi firms are scaling back generous salary premiums that once lured top foreign talent into sectors such as construction and manufacturing as the kingdom reins in spending and reorders economic priorities, four recruiters told Reuters.
Saudi Arabia, the world’s top oil exporter, is more than halfway through its economic transformation blueprint, known as Vision 2030, aimed at reducing dependence on hydrocarbon income, creating jobs, and expanding industries such as tourism, real estate, mining and financial services.
As part of the long-term plan, the kingdom has invested massively in multibillion-dollar megaprojects, vastly increasing demand for high-skilled foreign workers, but has struggled with execution and delays.
Foreign recruits should no longer expect to negotiate premiums of 40 per cent or more, to sometimes even double their existing salaries, which were common earlier this decade, two of the sources said, with offers far more restrained now.
“On the one hand, you have the region’s biggest economy rationalising and on the other side, you have a huge supply of candidates who are very open to coming to the region,” said Mr Magdy El Zein, managing director at recruiter Boyden.
“So what you get is employers rethinking packages. That definitely has happened.”
Kingdom pivoting towards AI, logistics
The change reflects a broader pivot by Saudi Arabia’s US$925 billion (S$1.2 trillion) Public Investment Fund (PIF), which took a sizeable hit on its infrastructure and real estate-heavy megaprojects, towards sectors such as artificial intelligence (AI), logistics and mining, seen as offering better returns.
Examples include Neom, a US$500 billion planned futuristic city in the desert
PIF and Neom did not immediately respond to a request for comment.
Saudi Arabia hired heavily for the megaprojects, targeting international talent with skills scarce in the local workforce.
Project managers in the neighbouring United Arab Emirates, for example, could get offers of around US$100,000 in Saudi Arabia for roles that paid US$60,000 in the UAE, said Mr Hasan Babat, chief executive of Dubai-based Tuscan Middle East, a recruitment consultancy.
Neom and other PIF-backed ventures now face delays as the kingdom pursues a rationalisation drive.
Saudi project activity remained sluggish in 2025, with awards nearly halving in the first nine months, according to Kamco Invest.
Lower oil prices have weighed on public finances, widening the fiscal deficit, even as Saudi Arabia has curbed crude production to support the oil market.
The kingdom needs oil prices at close to US$100 to balance its budget, the International Monetary Fund says.
Mr Babat said: “The pace of development has slowed and this has led to a slowdown in recruitment.
“Now, employers are negotiating salaries more than before, when there was a shortage, and companies have implemented cost-conscious measures.”
Saudi companies may direct limited budgets towards “hot jobs” in sectors such as AI or digital, Tuscan’s October salary report said.
The UAE, the Gulf’s business and tourism hub, with a 90 per cent expatriate population, has been a more attractive choice
It has also implemented social reforms to permit a more liberal lifestyle.
There is little difference now between average salaries in Saudi Arabia and the UAE, with only a 5 per cent to 8 per cent uptick on average, said Mr Trefor Murphy, chief executive of Dubai-based Cooper Fitch.
Boyden’s Mr El Zein said: “Convincing people to move from the UAE is a challenge, they expect a high premium.”
Growing competition for jobs in Saudi Arabia
But Saudi Arabia – estimated to grow 4.4 per cent in 2025 – remains attractive for those outside the region, where the job market is tighter and growth is slower.
The Saudi government has also accelerated labour market reforms and initiatives to boost the proportion of citizens in the private sector, increasing competition and the pool of applicants.
Unemployment among Saudi citizens is at a historic low, and the number of Saudis in the private sector grew 31 per cent between 2016 and the second quarter of 2025.
Ms Louise Knutsson, chief executive of Matches Talent in Dubai, said: “Packages are now far more measured, anchored to data, performance, and real market benchmarks. For some, that feels like contraction. For me, it signals maturity.”
To attract the best talent to Saudi Arabia, companies would need to offer predictable packages reflective of living costs, a balanced lifestyle for families, and a clear purpose connected to the scale of what is being built, Ms Knutsson added. REUTERS
