Saudi Arabia Reduces Salaries for Foreign Workers: Economic Shifts and New Hiring Trends Explained. Saudi Arabia has officially reduced salary packages for foreign professionals, marking a major shift in the kingdom’s economic direction, employment policies, and market trends. Recruitment agencies across the Gulf confirm that the “premium salary era” in Saudi Arabia is ending as the country adjusts its financial priorities under Vision 2030.
For years, expatriates working in construction, engineering, manufacturing, and large-scale development projects enjoyed salaries up to 40% higher than the international market. Today, companies are adopting a more cautious approach, offering compensation based on performance, project needs, and budget discipline.
Vision 2030 and Its Impact on Foreign Salaries
Saudi Arabia’s Vision 2030 is reshaping the country’s financial and employment landscape. As the kingdom moves beyond the halfway point of this ambitious roadmap, the government is becoming more selective about where major funds are spent.
Key economic changes include:
- Reduced investment in traditional construction projects
- Higher focus on profitable sectors like artificial intelligence, mining, logistics, digital infrastructure, and advanced technologies
- The Public Investment Fund (PIF) redirecting funds toward long-term strategic industries
Mega projects like NEOM, Trojena, and Red Sea Global, with a combined estimated cost of more than $500 billion, have also experienced slower progress. This reduced hiring demand has pushed companies to reconsider previously high expatriate salary packages.
Slower Recruitment and Tougher Salary Negotiations
Recruitment experts in Riyadh and Dubai report a noticeable slowdown in hiring activity. Companies are no longer rushing to offer exaggerated salary packages to attract foreign talent. Instead, they are:
- Negotiating more aggressively
- Comparing salaries with UAE and global benchmarks
- Prioritizing budget discipline
- Hiring based on exact project needs
Example: A project manager who earned $60,000/year in the UAE could previously secure a $100,000 package in Saudi Arabia. Today, this difference no longer exists due to stricter budget controls.
Additionally, the rapid increase in skilled Saudi workers has intensified competition. Between 2016 and 2024, Saudi employment in the private sector grew by 31%, reducing reliance on foreign talent.
Salary Gap Between Saudi Arabia and UAE Narrowing
One of the most notable trends is the shrinking wage gap between Saudi Arabia and the UAE. While salaries in Saudi Arabia were historically 15% to 30% higher, the difference has now narrowed to just 5% to 8%.
This shift has led to:
- Fewer UAE-based professionals relocating to Saudi Arabia
- Higher expectations from expatriates based in Dubai and Abu Dhabi
- Saudi companies needing stronger benefits to remain attractive
Foreign workers now consider factors such as lifestyle, family convenience, and career growth—not just salary—before accepting a Saudi offer.
Rise of Local Workforce and Higher Competition
Saudi Arabia’s labour market reforms have significantly boosted local hiring. With more Saudi nationals gaining qualifications in engineering, IT, finance, and management, companies are filling many roles locally instead of relying solely on foreign professionals.
Key outcomes include:
- Reduced demand for expatriates in mid-level roles
- More competitive local talent pools
- Standardized salary structures aligned with market data
This reflects a natural progression toward a more mature and self-sustaining job market.
What Saudi Companies Must Offer to Attract Global Talent
Even with reduced salary packages, Saudi Arabia still requires top-tier global talent for its long-term economic goals—especially in AI, digital transformation, mining, healthcare, fintech, and logistics.
To remain competitive, employers must provide strong non-salary benefits, such as:
- Fully furnished housing or housing allowance
- Relocation support and flight tickets
- School fee support for children
- Clear career progression and training pathways
- Transparent project expectations and job security
In today’s job market, a competitive package is more than a high salary—it is a complete lifestyle offering.
Conclusion
Saudi Arabia’s decision to reduce expatriate salaries reflects evolving economic priorities under Vision 2030. With tighter budgets, reduced construction-scale spending, and the rise of skilled Saudi nationals, companies are now adopting realistic salary structures aligned with global standards.
While the era of extremely high expatriate premiums is ending, Saudi Arabia still offers strong opportunities—especially in technology, mining, logistics, healthcare, and digital sectors. However, foreign professionals must adjust expectations and focus on long-term growth rather than short-term salary gains.
