Saudi Arabia Reduces Salary Benefits to Attract Foreign Workers
Saudi Arabia is reducing attractive salaries and incentives for foreign workers. Once a magnet for talent from around the world in sectors including construction and manufacturing, the country is facing a tough time as it seeks to cut spending and re-align economic priorities, four Saudi recruitment agencies said.
Saudi Arabia, the world’s top oil exporter, is already halfway through its economic transformation plan, Vision 2030. The plan aims to reduce its dependence on oil, create new jobs and expand sectors such as tourism, housing, mining and financial services. As part of this long-term plan, the country has invested heavily in billions of dollars in mega projects, which have significantly increased demand for highly skilled foreign workers. But the pressure of project implementation and delays is now challenging the country.
Two sources said that even a couple of years ago, foreign workers could get up to 40 percent more pay, in many cases up to double the additional benefits, or negotiate them. Now, that opportunity is almost non-existent.
“On the one hand, the region’s largest economy is rationalizing costs, and on the other hand, there are a lot of workers who are interested in coming to the region,” said Magdi Al Zein, managing director of recruitment agency Boyden. He added that this is causing employers to rethink salary packages and this is definitely happening.
Saudi shifts to artificial intelligence and logistics
The shift reflects a broader strategic realignment of Saudi Arabia’s $925 billion Public Investment Fund (PIF). After a push in infrastructure and real estate-based megaprojects, the fund is now focusing on sectors such as artificial intelligence (AI), logistics and mining, which are expected to yield relatively better returns.
These megaprojects include the $500 billion futuristic city of Neom planned in the desert and the mountain resort of Troyana, which will host the 2029 Asian Winter Games. PIF and NEOM did not immediately respond to requests for comment.
Up to 40% salary increase no longer available
Saudi Arabia had turned to international skilled manpower to address the labor shortage in mega projects. The 40% salary increase is no longer available in Saudi Arabia. Hassan Babat, CEO of Dubai-based recruitment consultancy Tuscan Middle East, said UAE project managers used to receive salaries of around $100,000 in Saudi Arabia—a position that used to pay around $60,000 in the Emirates.
But as cost-cutting has begun, PIF-backed initiatives including NEOM are now facing delays. According to Kamco Invest, the pace of Saudi projects remained sluggish in 2025, with the number of projects awarded nearly halved in the first nine months of the year.
Low oil prices have put pressure on government finances and deepened the fiscal deficit. According to the IMF, Saudi Arabia needs oil prices to be around $100 to balance its budget.
“The pace of development in Saudi Arabia has slowed down. This has affected hiring. Employers are now haggling more than ever,” said CEO Hassan Babat.
Saudi companies with limited budgets are prioritizing “hot jobs” in sectors such as AI or digital, according to Tuscan’s October salary report.
The UAE, a business and tourism hub in the Gulf region—where 90 percent of the population is expatriate—is still an attractive destination for many skilled workers. Not only are the high salaries tax-free, but the more established international schools and healthcare networks also attract them. The country has also implemented social reforms to create more generous living conditions.
Trevor Murphy, CEO of Dubai-based Cooper Fitch, said the difference in salaries between Saudi Arabia and the UAE is now very small—only 5 to 8 percent on average.
Boyden’s Magdi Al Zein said, “It’s now a challenge to convince people from the UAE to move to Saudi Arabia. They expect high premiums.
Competition is growing in Saudi Arabia’s local job market
The Saudi economy is expected to grow by 4.4 percent this year, making the country still attractive to countries outside the region, especially where job opportunities are tight and growth is slow. The government has implemented labor market reforms and initiatives to increase Saudi participation in the private sector, which has increased competition and the number of applicants. Unemployment among Saudis is now at a historic low, and the number of Saudi workers in the private sector has increased by 31 percent in the second quarter of this year since 2016.
“Salary packages are now much more moderate, based on data, performance and real market benchmarks,” said Lewis Knutson, CEO of Dubai-based Matches Talent. “To some, this may seem like a contraction, but to me, it’s a sign of maturity.” He added, “To attract the best talent to Saudi Arabia, companies need to present a clear objective that reflects the cost of living—a predictable package, a balanced lifestyle for families, and is consistent with the scope of ongoing development.”
