Saudi companies are reducing the lucrative salary premiums that once drew top foreign professionals, as the kingdom tightens spending and shifts its economic priorities, recruitment firms told Reuters.
Saudi Arabia, now past the halfway mark of its Vision 2030 transformation plan, has poured billions into megaprojects and diversified sectors including tourism, real estate, mining, finance, and logistics. The massive expansion had previously fueled intense demand for high-skilled foreign workers – often pushing salaries 40% higher than in neighbouring countries.
Recruiters say foreign candidates should no longer expect 40%-100% salary jumps that were common earlier in the decade. Employers are renegotiating compensation due to rationalised spending and a growing pool of applicants willing to move to the region.
Saudi Arabia’s $925 billion Public Investment Fund (PIF) has also shifted its focus away from real estate-heavy megaprojects—such as NEOM and Trojena—towards higher-return sectors like AI, logistics, and mining. Projects under PIF have faced delays, contributing to slower hiring activity.
Lower oil prices and reduced crude output have widened the kingdom’s fiscal deficit. According to the IMF, Saudi Arabia needs oil near $100 per barrel to balance its budget, adding pressure to curb spending.
Recruiters report that companies are now prioritising “hot jobs” in digital and AI rather than broad-based hiring across megaprojects.
While salaries in Saudi Arabia once far outpaced the UAE, the gap has shrunk to just 5%-8% on average, making it harder to attract talent from Dubai and Abu Dhabi. The UAE remains a strong draw due to its tax-free income, lifestyle appeal, and extensive international school and healthcare networks.
However, Saudi Arabia’s growing economy—forecast to expand 4.4% this year—continues to attract workers from outside the region, especially as labour market reforms increase private-sector opportunities for citizens. Saudi participation in the private sector has risen 31% since 2016.
Recruiters say compensation packages in Saudi Arabia are becoming more data-driven and performance-linked, signalling a market “moving toward maturity.”