Saudi Arabia is reshaping its expat pay model for the long term

For decades, Saudi Arabia has drawn talent with global expertise through attractive compensation packages. Getty Images

Saudi Arabia is entering a new phase of workforce evolution – one where compensation structures are being recalibrated to support long-term sustainability, national development and a competitive labour market. Expatriate compensation is not diminishing, it is being reshaped to align with the kingdom’s economic vision and a maturing talent ecosystem.

For decades, the kingdom attracted global expertise through attractive compensation. Today, as part of Vision 2030, Saudi Arabia is strengthening domestic capability while continuing to welcome global talent that fuels sectoral growth. This shift reflects strategic planning, not short-term cost optimisation.

Why the premium model is evolving

Over the past 18 months, compensation differences between foreign residents and local talent have narrowed in some sectors. This change is driven by policy modernisation, local talent empowerment initiatives and an increasing focus form employers on sustainable workforce structures.

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Industries such as construction, engineering, logistics and manufacturing – historically reliant on international expertise – are transitioning into more skills-based, performance-driven compensation models. Leadership roles, specialised capabilities and high-impact expertise continue to command strong premiums.

Regional alignment in progress

Saudi Arabia’s evolution is influencing wider workforce strategies across the Gulf. Countries including the UAE, Bahrain and Oman are adopting more structured, future-focused compensation frameworks, particularly in high-priority sectors such as artificial intelligence, advanced manufacturing, logistics, tourism, mining, health care and financial services.

This signals a shift in how foreign residents are viewed – not as short-term specialists, but as long-term contributors to transformation. Both employers and professionals are responding with a more strategic mindset.

Beyond salary: The new value proposition

Salary alone is no longer the defining magnet for foreign talent. Four non-monetary value propositions are becoming equally, if not more, influential:

Meaningful roles: Professionals seek positions where they can see real impact and have space to contribute to decisions.

Leadership pathways: Clear progression and visibility on future opportunities carry weight similar to compensation.

Stability and residency clarity: The ability to plan long term influences the decisions of employees more than yearly pay adjustments.

Vision 2030 alignment: Being part of national transformation initiatives is viewed as a strong career advantage.

Organisations that can clearly communicate these levers, alongside fair compensation, will retain their competitive edge. Employers who rely solely on salary-based recruitment may risk becoming irrelevant in a rapidly maturing labour market.

Opportunity is real, but different

Saudi Arabia continues to create opportunities for global professionals. The expectation is evolving, not retreating. Three strategies stand out for foreign residents aiming to thrive:

• Reframe negotiations: Expect packages that are structured differently, where benefits, performance bonuses, residency incentives and education allowances may carry more weight than base salaries.
• Explore growth sectors: While traditional industries are normalising salaries, emerging sectors such as AI, sustainability, logistics, tourism and financial technology are still attracting premium pay for specialised skills.
• Understand local hiring dynamics: Companies increasingly seek foreign talent who can lead localisation efforts, transfer know-how and help build teams, which requires presence, mentorship and commitment.

This shift rewards those who contribute to the kingdom’s long-term, capability-building efforts.

As part of Vision 2030, Saudi Arabia is strengthening domestic capability while continuing to welcome global talent. Bloomberg

What employers must do now

Companies entering or expanding in Saudi Arabia cannot rely on outdated talent strategies. Those succeeding today share a common approach – they are designing workforce strategies built on sustainability rather than short-term compensation spikes. Four strategic shifts stand out:

• Structured career pathways instead of salary escalation
• Stronger integration of domestic talent
• Roles designed for measurable impact and capability growth
• Positioning expatriates as long-term contributors and mentors

Government initiatives, from localisation programmes to sector-based talent incentives, reinforce a holistic approach to workforce development. Companies that adapt early will remain competitive.

New balance

Saudi Arabia’s workforce transformation is not about reducing expatriate competitiveness. It is about aligning compensation with skills, impact and future needs. This is a structured rebalancing aligned with long-term national goals. These changes intersect economic reform, productivity, talent mobility and sectoral growth.

Expatriate compensation is not fading, it is being reshaped to support a more resilient, capable and future-ready labour market – one where opportunity continues to grow for those aligned with the kingdom’s direction.

Mahesh Shahdadpuri is founder and chief executive of TASC Outsourcing