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ServiceNow in Saudi Arabia: Navigating Saudisation and Workforce Localisation
The Kingdom of Saudi Arabia presents tremendous opportunities for ServiceNow partners and end users looking to establish operations in the Middle East. However, success in this market requires careful navigation of the country’s comprehensive nationalisation programme for its workforce, known as Saudisation or the Nitaqat system. Understanding these requirements is crucial for any organisation planning to build a ServiceNow practice in the region.
Understanding Saudisation and the Nitaqat Programme
Saudisation is Saudi Arabia’s strategic initiative to increase employment opportunities for Saudi nationals whilst reducing dependence on foreign workers. The programme, formally known as Nitaqat, mandates that private sector companies employ specific percentages of Saudi nationals based on their industry sector and company size.
The system has evolved significantly since its inception, with the Ministry of Human Resources and Social Development recently announcing expanded Saudisation requirements across 269 professions in 2025. This expansion demonstrates the government’s commitment to its Vision 2030 objectives, which aim to reduce unemployment to 7% by 2030.
The Current Regulatory Landscape for Technology Consulting
For ServiceNow partners and end users, the regulatory environment has become increasingly complex. The sector now faces a phased Saudisation requirement of 40%, up from the previous 35%. This increase affects consulting specialists, business consulting specialists, and project management roles – all critical positions within ServiceNow implementations.
Companies operating in the technology consulting space must also contend with the new 2025 amendments to the KSA Labour Law, which introduce enhanced worker rights protections and modernised employment practices. These changes reflect Saudi Arabia’s commitment to aligning with international employment standards whilst supporting its economic diversification goals.
The Classification System and Its Implications
The Nitaqat programme operates through a colour-coded classification system that directly impacts a company’s ability to operate effectively. Companies are categorised as Platinum, Green (High, Medium, Low), or Red based on their Saudisation compliance rates.
Benefits and Restrictions by Classification
Platinum and Green Companies enjoy preferential treatment, including:
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Rapid visa processing capabilities
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Unrestricted hiring from global talent pools
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Priority access to government tenders
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Ability to recruit from lower-tier companies
Red Zone Companies face significant operational restrictions:
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Prohibition on issuing new work visas
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Inability to renew work permits for expatriate staff
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Exclusion from government contract bidding
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Potential business closure for persistent non-compliance.
The consequences of non-compliance extend beyond administrative inconvenience. Companies in the Red zone may experience blockages on Ministry of Human Resources services, inability to renew critical documents such as commercial registrations, and restrictions on issuing Saudisation certificates.
Sector-Specific Requirements for Technology Firms
The technology sector, including ServiceNow consulting, faces unique challenges under the current Saudisation framework. Saudi Arabia’s IT consulting sector, valued at $24.5 billion in 2023, continues to experience rapid growth driven by demand for AI, cloud services, and cybersecurity solutions.
ServiceNow’s own expansion in the region exemplifies the opportunities available. The company announced a $500 million investment in Saudi Arabia, including plans for regional headquarters in Riyadh and two dedicated data centres. This investment aligns with the Kingdom’s Vision 2030 objectives and demonstrates the potential for technology firms willing to navigate the regulatory requirements.
Compliance Costs and Administrative Burden
Operating within the Saudisation framework involves substantial administrative overhead and compliance costs. Companies must maintain detailed records of their workforce composition, regularly report to the Ministry of Human Resources and Social Development, and ensure adherence to minimum wage requirements for Saudi employees.
The minimum wage for Saudi nationals included in Saudisation calculations has been increased to SAR 4,000 (approximately £800) monthly. Additionally, companies must factor in the costs of training programmes, as new labour regulations require employers to create skills development initiatives for Saudi employees.
Recent regulatory changes have introduced updated fees for visa services and residency permits, with exit and re-entry visa extensions now costing 103.5 Saudi riyals and Iqama renewals priced at 51.75 Saudi riyals. These costs accumulate quickly for firms managing substantial expatriate workforces.
The Parallel Saudisation Programme: An Alternative Compliance Route
For companies struggling to meet Saudisation quotas directly, the Parallel Saudisation Programme offers an alternative compliance pathway. This scheme allows companies to pay monthly fees for each Saudi national they fail to employ, whilst maintaining their Nitaqat ranking and accessing ministry services.
The fee structure is calculated based on the percentage of additional Saudi employees needed relative to the current Saudi workforce. Companies with higher existing Saudi employment ratios benefit from reduced fees, creating incentives for gradual workforce localisation.
Recruitment and Talent Acquisition Challenges
Finding qualified Saudi nationals for specialised ServiceNow roles presents significant challenges. The Kingdom’s focus on developing local talent has led to increased investment in digital skills training, with initiatives like the Saudi Digital Academy providing ServiceNow-specific education.
However, the supply of experienced Saudi ServiceNow professionals remains limited compared to demand. Companies must often invest substantially in training programmes to develop local talent, requiring both time and financial resources that many organisations struggle to provide internally.
The recruitment landscape has also become more regulated, with new guidelines introduced in 2023 requiring recruitment agencies to meet higher performance standards and transparency requirements. These changes aim to improve the quality of recruitment services but add complexity for companies seeking to build their teams.
Potential Solutions to Increase the Number of Saudis in Your Workforce
Establishing a successful ServiceNow practice in Saudi Arabia requires careful strategic planning beyond simple compliance with Saudisation quotas. Companies must consider the long-term sustainability of their operations, particularly given the increasing Saudisation rates and evolving regulatory environment.
The technology sector’s rapid growth creates opportunities, but also intensifies competition for qualified Saudi talent. Firms entering the market must develop comprehensive talent development strategies. For most organisations, achieving compliance requires a sustained, multi-layered approach that touches nearly every aspect of business operations:
- Comprehensive Training and Development: Building a pipeline of skilled Saudi professionals often means designing and delivering tailored training programmes, partnering with local universities, and investing in ongoing skills development. This process can be time-intensive, requiring careful planning, dedicated resources, and a long-term commitment to upskilling talent
- Expanding Recruitment Efforts: Attracting Saudi nationals may involve broadening recruitment strategies to include underrepresented groups such as women, students, and people with disabilities. This not only means adapting your outreach and employer branding, but also ensuring your HR processes are inclusive enough to support a diverse workforce
- Engaging with Government Schemes: Making the most of national initiatives like Hafiz and Jadarah can help connect you with Saudi job seekers, but it also requires staying updated on evolving government programmes, navigating administrative requirements, and integrating these schemes into your wider talent strategy
- Managing Compliance via the Parallel Saudisation Programme: For those finding it difficult to meet targets immediately, the Parallel Saudisation Programme allows companies to pay a monthly fee per missing Saudi employee. While this offers a degree of flexibility, it also introduces additional financial planning, regular monitoring, and ongoing engagement with government portals
- Focusing on Retention and Workplace Culture: Attracting Saudi talent is just the beginning. Creating an environment where employees are motivated to stay, through competitive salaries, clear career progression, and supportive policies, demands continuous attention and regular review of your HR practices
Each of these steps, while essential, can be resource-heavy and requires a coordinated effort across multiple teams and departments. For many organisations, the process of increasing the number of Saudis in the workforce is not just a compliance exercise but an ongoing transformation that touches recruitment, training, HR, and business strategy as a whole.
How Linking Humans Can Streamline Your Entry
Given the complexity of Saudi Arabia’s regulatory environment and the challenges of finding qualified local talent, partnering with a specialist recruitment agency can significantly reduce the administrative burden and accelerate your market entry.
At Linking Humans, we understand the intricacies of establishing ServiceNow practices in the Saudi market. Our extensive network of Saudi ServiceNow professionals, combined with our deep understanding of the Nitaqat compliance requirements, enables us to provide comprehensive solutions that save you time and effort.
We can help you navigate the complex classification system, ensure compliance with evolving regulations, and connect you with the qualified Saudi talent needed to build a successful ServiceNow practice in the Kingdom. Rather than managing the recruitment process internally whilst juggling compliance requirements, let our expertise guide your expansion into this dynamic market.
Contact us today to learn how we can support your ServiceNow practice establishment in Saudi Arabia and ensure your success in this rapidly growing market.
