Saudi Arabia’s 70% Local Purchase Push Reshapes Jobs

Factories aren’t the sole contributors to economic activity; buying offices, supplier contracts, and choices between imports or local products also play significant roles. The decision to raise the Saudization requirement to 70% for job purchases transcends mere employment policy.

It aims to position Saudis critically within the supply chain, facilitating the identification of suppliers, the calculation of business expenses, and the demonstration of the value retained within the economy.

In this context, the choice influences not only the individual employee but also the labour market, local content, and the resilience of supply chains with the home market. It raises a critical question: will businesses see the new quota as an added compliance burden, or will they leverage it to enhance knowledge and skills?

Saudizing Procurement: From Percentages to Professions

According to the Ministry of Human Resources and Social Development, the decision to increase the Saudization rate in private sector procurement professions to 70% went into effect on May 31, 2026.

Twelve positions, including contract manager, tender specialist, e-commerce specialist, market research specialist, logistics and warehousing specialist, private label supplier, procurement manager and procurement representative, are included in the decision, which covers businesses with three or more workers in the targeted professions.

The growth of the targeted professions reflects the nature of the choice. Procurement is no longer only a back-office operation that issues orders and compares pricing. It is a role that sits between management, finance, and operations, impacting supplier selection, risk assessment, product quality, and supply chain stability. As a result, Saudization involves more than just hiring more people. It assigns qualified Saudi citizens to decision-making roles within businesses.

However, this does not remove the difficulties. Big businesses can often reorganise their staff, start training initiatives, and draw in seasoned experts. However, the shift can be more challenging for small and medium-sized businesses (SMEs). It’s not that Saudization is inappropriate for some occupations; rather, contemporary procurement calls for a variety of abilities, including the ability to read contracts, negotiate, comprehend the market, assess suppliers, use online platforms, and compute overall expenses rather than simply the out-of-pocket price.

This is where the difference between productive and superficial Saudization starts. While the latter develops a profession, the former only fulfils a quota. The quality of contracts and the Saudi employee’s capacity to oversee suppliers rather than merely handle orders will soon show the difference between the two.

Supply Chains: When Knowledge Turns Local

This choice is part of a larger plan to improve local content. The local content ratio in government procurement increased from 28% in 2018 to over 51% by the end of 2025, according to the Local Content and Government Procurement Authority. According to the Authority’s 2024 report, strategic partners in the private sector spent SAR 114 billion on operations, with a local content ratio of 44.33%, or roughly SAR 50 billion. Local content coverage in government tenders reached 94.07% in terms of value.

These numbers show that the government does not consider procurement to be a simple expense. It considers it an instrument for economic direction. It is possible for a government or corporate contract to buy a final product while also developing a local resource, transferring technology, creating jobs, or increasing the nation’s capacity for production.

An obvious illustration of this reasoning is Aramco’s experience. The corporation said in February 2026 that its In-Kingdom Total Value Add (IKTVA) initiative had reached its target of 70% local content in procurement, with plans to increase this to 75% by 2030. According to the corporation, the initiative generated over 200,000 direct and indirect jobs, drew $9 billion in investments, and increased GDP by $280 billion.

Aramco’s experience highlights that procurement localisation should not be treated as an isolated human resources decision. Instead, it is most effective when integrated into a broader strategy encompassing talent development, quality enhancement, supplier development, and alignment of local spending with production objectives. While Aramco’s unique strengths may not be universally applicable, the core principle remains clear.

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Upfront Costs vs. Long‑Term Returns

Some businesses may face transition costs due to changes in talent recruiting, requiring reorganisations in procurement, contracts, and warehousing, along with potential training and wage increases. Businesses that depend on outside suppliers or speciality goods may find knowledge gaps that are difficult to fill.

Evaluating strategic decisions solely on initial costs is insufficient, as global supply chains have faced significant disruptions recently. The pandemic, shipping challenges, and energy pressures have highlighted that distant suppliers, while cheaper, can lead to higher costs in emergencies.

However, evaluating the strategy just based on its initial cost is inadequate. Global supply chains have been rapidly disrupted in recent years. Companies have been reminded by the pandemic, shipping issues, and energy pressures that a supplier who is farther away may be less expensive overall but more costly in an emergency.

Consequently, having a local workforce that is knowledgeable about the local market, familiar with suppliers, and capable of creating alternatives is not only necessary for Saudization but also contributes to the economy’s resiliency.

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Saudization: Skill Building or Just Quotas?

The policy concerning Saudization faces the risk of becoming merely a quota system, leading to superficial compliance, irrelevant job titles, and minimal training that fails to produce meaningful experience. However, if the initiative is associated with defined career paths, specialised certifications, and comprehensive training in areas such as negotiation, contract management, and supply chain management, Saudization could effectively enhance job development.

Local content should not compromise quality or raise costs indefinitely. While local suppliers require support and development, they must also face testing and competition. The ultimate aim is not simply to increase domestic spending at any expense, but to foster a competitive local market. The combination of three policies can accomplish this goal: localisation of the profession, supplier development, and enhancement of performance standards.

In conclusion, localising procurement to 70% is significant but does not ensure immediate success. This strategy positions Saudis in a pivotal role, enhances local content, and compels companies to reevaluate supplier relationships. The upcoming years will see an evaluation of this initiative’s true effects, determining whether it leads to more resilient procurement professionals and supply chains or merely stands as a statistic without substantial influence on market structure.

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