Saudi Arabia labour market reforms bring change at the checkouts

http://www.theguardian.com/world/2014/oct/17/saudi-supermarket-saudisation-women-workers

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Welcome to what seems to be an ordinary supermarket, with carts and aisles occupying 10,000 sq metres. But it is also a laboratory, the site of innovation where a clever manager is shaking up the habits of rich, but very conservative Saudi Arabia. Since the south Asian staff on 30 checkouts were replaced by Saudi men and women, the store on the outskirts of Riyadh has become a showcase for change in the kingdom.

We cannot give its name, nor that of its expatriate manager. The company set this condition for fear of causing unwanted attention. Almost anywhere else in the world, hiring local people in the place of immigrants would pass unnoticed. But in a country where women are often housebound and many men prefer to do nothing rather than accept a low-grade job, the changes at the store are significant. They reveal trends that are gradually modernising the country.

“Saudisation” of the labour market has been a feature of the regime’s rhetoric for the past 20 years, but for a long time it was not put into practice. What was the point in reforming an economy earning almost $1bn a day from oil? Private sector jobs were filled by foreigners, and positions in the administration and the upper echelons of the services were reserved for Saudi citizens. But the Arab revolutions of 2011 came as a wake-up call to the Saudi elite.

The public sector can no longer absorb the 200,000 young people leaving university every year, witness their 11.5% unemployment rate. “Welfare systems can work in very small countries such as Qatar,” says a western diplomat serving in Riyadh, “but it’s tricky in a country with a population of 20 million, three-quarters of whom are under 30.” If the price of oil drops, the cost would rocket. “The Saudis know they are sitting on a timebomb,” says an economist.

After raising wages to defuse any inkling of revolt, the regime took several radical measures. During 2013 undocumented immigrants, numbered at more than two million, were deported, resulting in a downturn in the sectors most dependent on foreign labour, such as construction.

At the same time the minister of labour, Adel Fakeih, speeded up the process of Saudisation. Companies are now required to employ a minimum quota of local workers: 7% in building, 50% in insurance and 90% in banking, for example. Those who fail to comply risk a range of penalties, from a ban on recruiting foreign workers to a freeze on bank transactions. On the other hand good performers are rewarded with financial and administrative support, designed to compensate for the extra cost of employing Saudis, who earn twice as much as their foreign counterparts.

The supermarket has done particularly well. Saudi citizens now account for a third of the workforce, substantially better than the 24% target for retail. “We’re the only company in our line of business to have largely exceeded our quota,” says the manager. A dynamic man, with experience launching stores in various parts of the world, he was quick to grasp the potential benefit of meeting the ministry guidelines. Here was an opportunity to promote the image of a socially responsible business, committed to the country’s development.

But even he could not “Saudise” his workforce immediately. In 2011, the first year Saudi checkout staff were hired, the rate of staff turnover soared to 100%. Entering the world of work was such a shock that almost all the new recruits gave up within a few months. “A lot of young people are used to being served, not serving,” the manager explains. “For many of them it’s unthinkable to take orders from a Pakistani or an Indian. Some of them even refused to obey someone belonging to a tribe lower down in the social pecking order.”

Saudis enforce harsh divisions among themselves. The most striking one is the distinction between people of tribal or non-tribal origin, commonly referred to as 220 or 110 volts. Those with tribal roots can supposedly trace their families back to the “original” Saudis. “We are dealing with a tribal society which has difficulty accepting the idea of merit,” says Jacques Bourgeois, a consultant in foreign trade who has being living here since 2000.

The manager, however, was not put off. “If you take the trouble to spend time on a difficult workforce it can be rewarding,” he asserts. His company’s reputation, and wages almost on a par with the public sector, helped to improve staff loyalty. By March 2013 all the checkouts were staffed by Saudis wearing the traditional immaculate white robes. But productivity suffered. Per minute the new workers were much slower than their Asian predecessors.

But change was under way on another front. For several years King Abdullah had been struggling with the Wahhabite clergy – the second power base in the kingdom – to bring women into the labour market. For years they were only allowed to work in offices, but in 2012 the dispensation was extended to include shops selling underwear and cosmetics.

Though they were very strict about men and women mixing in public places the mutawa (religious police) had, until then, seen nothing untoward about women buying underwear from men. “The king may be a 90-year old Bedouin, but he is a great deal more open-minded than most of his subjects,” says one foreign diplomat.

The supermarket manager saw this as an opportunity and negotiated permission to recruit women as checkout operators. As a gesture towards the mutawa, he had panels placed behind their seats, supposedly to keep them out of sight of the men, despite the fact that they were already veiled from head to foot. Only women shoppers and couples were allowed to use their checkouts. “The women are curious, persevering and more committed than the men,” the manager says. “They see work as a space for freedom, not as a constraint.”

One day, during a training session, he showed two productivity charts to male checkout staff, their own and one with much better results. The staff were convinced that the other chart was a record of their Asian predecessors. When the manager explained that it showed the productivity of women checkout operators, the men began to work much harder.

In another large supermarket, in Jeddah on the Red Sea, the most liberal city in the kingdom, most of the checkouts are now staffed by women. However in the capital, they are still in the minority. One employee, Hind Abdelaziz, 35, agreed to answer our questions. Despite the negative comments from some shoppers, this mother of seven enjoys her job. “It’s a breath of fresh air,” she says. “My fellow workers and the management are like a second family. And my wages mean we can help our eldest children, who are both studying medicine in the United States. I got married when I was 17 but I want my daughter to get her degree before finding a husband.”

The HR department would like to promote the most promising women recruits. But the mutawa will only let women operate the checkouts and its rulings are not open to question. When the religious police caught workers smoking during prayers they arrested the then manager in his office. Locks have since been fitted on the management floor.

Ministry of Labour figures show that real progress has been achieved on Saudisation and jobs for women. The share of private sector jobs held by Saudis has risen from 7% to 16% since 2011, with a tenfold increase in the number of women working, up from 50,000 to 500,000. “It won’t just change the labour market; it will transform attitudes and society as a whole,” says one Saudi businessman. “A revolution is under way.”

The supermarket manager is also convinced these changes will herald others. With more women in work, the current ban on them driving cars is bound to be questioned. Husbands, fed up with taking them to work every day, will end up letting their wives take the wheel.

This article appeared in Guardian Weekly, which incorporates material from Le Monde