Two economists told Okaz: The decline in Saudi unemployment is leading the market to the "era of skills"

They explained that the market is moving towards reshaping the relationship between skills and opportunities, or what is called the skills age, away from traditional employment patterns, noting that the growth in women’s participation during the past years confirms the success of the policies as it represents one of the most important strategic transformations, due to its direct impact on increasing the gross domestic product and diversifying the economic base.

Higher efficiency

Economic expert Professor Mohammed bin Dalim Al-Qahtani confirmed that the decrease in the unemployment rate among Saudis to 7.2%, and the decline in women’s unemployment to 10.3%, do not represent a mere numerical improvement, but rather reflect a real structural transformation in the labor market.

He said, “More important than the decline in unemployment is the rise in economic participation and the diversification of job search methods, reflecting a growing maturity in the behavior of job seekers, their shift from waiting to taking initiative, and their increasing readiness to work more efficiently.” He pointed out that the growth in women’s participation over the past years confirms the success of policies in expanding the national production base.

He explained that the next challenge will not be limited to reducing unemployment, but will be improving the quality and sustainability of jobs, especially in light of the accelerating digital transformation, which is driving demand for advanced skills, in contrast to the decline of traditional jobs. He predicted that unemployment will continue to fall below 6% within 3 to 5 years, with the rising demand for technical and analytical skills, in a market now governed by competence, not certificates.

Increased productivity

For his part, economic advisor Abdulaziz bin Faris Al-Ahmari said: “The decline in unemployment reflects an improvement in the efficiency of the labor market, especially with regard to matching skills with opportunities, which is known economically as allocation efficiency. This improvement intersects with global indicators that measure the quality of markets, as in the reports of the International Labor Organization.”.

He explained that the decline in unemployment, coupled with the expansion of opportunities, reflects an improvement in the Beveridge curve, an economic indicator that shows increased efficiency in job transitions and a narrowing of the skills gap, which enhances market flexibility and its ability to absorb changes.

He noted that one of the most prominent drivers of this transformation is the increase in worker productivity, as a result of investment in human capital, training programs and localization, pointing out that World Bank reports confirm that increased productivity is a fundamental pillar of sustainable growth.

He stated that the increased participation of women in the labor market represents one of the most important strategic shifts, due to its direct impact on increasing the gross domestic product and diversifying the economic base.

He noted that the labor market is moving towards an employability model instead of traditional employment, as skills and continuous learning become the decisive factor in professional stability, in light of the World Economic Forum’s expectations of a significant change in skills over the coming years.

Two economic experts confirmed to “Okaz” that the decline in the unemployment rate among Saudis to 7.2%, and the decrease in women’s unemployment to 10.3%, reflect a real structural transformation and an improvement in the efficiency of the labor market, especially regarding the alignment of skills with opportunities, which is economically known as allocative efficiency.

They explained that the market is moving towards reshaping the relationship between skills and opportunities, or what is called the era of skills, away from traditional employment patterns, noting that the growth in women's participation over the past years confirms the success of policies as it represents one of the most important strategic transformations, due to its direct impact on increasing GDP and diversifying the economic base.

Higher Efficiency

The economic expert Professor Mohammed bin Dulaim Al-Qahtani confirmed that the decline in the unemployment rate among Saudis to 7.2%, and the decrease in women’s unemployment to 10.3% do not represent just a numerical improvement, but reflect a real structural transformation in the labor market.

He said: “More important than the decline in unemployment is the rise in economic participation and the diversity of job search methods, which reflects an increasing maturity in the behavior of job seekers, transitioning from waiting to take initiative, in addition to their growing readiness to work more efficiently.” He pointed out that the growth in women's participation over the past years confirms the success of policies in expanding the national production base.

He indicated that the upcoming challenge will not be limited to reducing unemployment, but will involve improving the quality and sustainability of jobs, especially in light of the accelerating digital transformation, which drives demand for advanced skills, against the backdrop of declining traditional jobs. He expects unemployment to continue to decrease to below 6% within 3 to 5 years, with rising demand for technical and analytical skills in an increasingly market governed by efficiency rather than degrees.

Increased Productivity

For his part, economic advisor Abdulaziz bin Faris Al-Ahmari said: “The decline in unemployment reflects an improvement in the efficiency of the labor market, especially regarding the alignment of skills with opportunities, which is economically known as allocative efficiency. This improvement intersects with global indicators measuring market quality, as seen in reports from the International Labor Organization.”

He explained that the decline in unemployment alongside the expansion of opportunities reflects an improvement in the Beveridge curve, which is an economic indicator that indicates an increase in the efficiency of job transitions and a reduction in the skills gap, enhancing the market's flexibility and its ability to absorb changes.

He noted that one of the main drivers of this transformation is the increase in worker productivity, resulting from investment in human capital, training programs, and localization, pointing out that World Bank reports confirm that increasing productivity is a fundamental pillar for sustainable growth.

He stated that the rise in women's participation in the labor market represents one of the most important strategic transformations, due to its direct impact on increasing GDP and diversifying the economic base.

He mentioned that the labor market is moving towards a model of employability instead of traditional employment, where skill and continuous learning become the decisive factors for professional stability, amid expectations from the World Economic Forum of significant changes in the skill set over the coming years.