Human Resources in Small and Medium Enterprises

# Human Resources in Small and Medium Enterprises in Saudi Arabia: Your Comprehensive Guide

**Are you managing a small or medium enterprise in Saudi Arabia and facing challenges in human resource management?** You are not alone. Small and medium enterprises represent **99% of the total establishments** in the Kingdom and employ a large proportion of the workforce, but human resource management in them is often the biggest challenge.

In this guide, we review the most important services of the Ministry of Human Resources and Social Development dedicated to small and medium enterprises, and how to benefit from them in practical steps.

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## What are Small and Medium Enterprises in Saudi Arabia?

According to the definition of the **General Authority for Small and Medium Enterprises (Monsha’at)**:
– **Small Enterprises:** Number of employees 5-49 employees, and annual revenues 3-40 million riyals
– **Medium Enterprises:** Number of employees 50-249 employees, and annual revenues 40-200 million riyals

These enterprises form **the backbone of the Saudi economy** and contribute more than **30% of the Gross Domestic Product**.

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## Ministry of Human Resources Services for Small and Medium Enterprises

### 1. **Qiwa Platform** – Unified Portal
The unified platform for Ministry of Human Resources services, which offers to small enterprises:
– **Issuance and renewal of work licenses** electronically
– **Management of employment contracts** (issuance, modification, termination)
– **Request for work visas** and follow-up on their status
– **Wage Protection** service – mandatory for all establishments
– **Leave and absence management system**
– **Saudization service** – follow-up on Saudization ratios and ranges

**How to start?** Register on [qiwa.sa](https://qiwa.sa) using your Absher establishment account.

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### 2. **Nitaqat Program** – Simplified Saudization
The Saudization program classifies establishments into ranges (red, yellow, green, platinum) based on the Saudization ratio.

**For small enterprises (less than 10 employees):**
– **Reduced Saudization rate** – starts from 1% only
– **Exemption from Saudization fines** for the first year
– **Saudization support** through the “Taqat” program and the Human Resources Development Fund (Hadaf)

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### 3. **Human Resources Development Fund (Hadaf) – Support Programs**

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### 4. **Wage Protection** – Mandatory for All
Since **2021**, mandatory for **all establishments** regardless of size:
– Payment of salaries through accredited banks
– Through the “Wage Protection” system on the Qiwa platform
– Non-compliance: fines up to 10,000 riyals and suspension of establishment services

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### 5. **Maharat Platform** – Electronic Training
An electronic training platform that offers:
– Courses in **job skills** (communication, leadership, digital)
– Certificates accredited by the **Technical and Vocational Training Corporation**
– Free for Saudis and employees in establishments registered on Qiwa

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## Practical Steps to Establish Human Resource Management in Your Small Enterprise

### Step 1: Registration on Basic Platforms (Week 1)
☐ Register the establishment on “Qiwa” (Qiwa)
☐ Register the establishment on “Nitaqat” (Nitaqat)
☐ Register on “Taqat” (Taqat) to post jobs
☐ Open an establishment file on “Social Insurance” (GOSI)
### Step 2: Building the Basic Organizational Structure (Week 2-3)
☐ Determine the organizational structure (manager, departments, roles)
☐ Write clear job descriptions for each role
☐ Determine the salary scale and benefits (according to the labor system)
☐ Prepare basic human resources policies
### Step 3: Recruitment and Employment (Week 3-6)
☐ Post jobs on “Taqat” (free for registered establishments)
☐ Benefit from Hadaf programs for supported employment
☐ Sign contracts through”Qawwa” Platform
☐ Register employees in “Social Insurance” within 30 days
### Step 4: Operation and Compliance (Monthly/Annually)
☐ Operate wage protection monthly (mandatory)
☐ Follow up on localization ratios quarterly
☐ Renew work licenses annually
☐ Manage vacations and absences through “Qawwa”
☐ Evaluate annual performance
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## Financial Support Programs for Small Enterprises in Human Resources

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## Common Challenges and Practical Solutions

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## Frequently Asked Questions (FAQ)

**Q: Is wage protection mandatory for an establishment with only 5 employees?**
**A:** Yes, it is mandatory for **all establishments** registered in Social Insurance since 2021, regardless of the number.

**Q: What is the required localization percentage for an establishment with 8 employees?**
**A:** For small establishments (less than 10 employees), the required localization percentage is **1% only** (at least one Saudi employee).

**Q: Is publishing job vacancies in “Taqat” free for small establishments?**
**A:** Yes, publishing job vacancies in “Taqat” is **completely free** for registered establishments.

**Q: How much is the support of the “Employment Support Program” for a Saudi employee with a salary of 6000 riyals?**
**A:** Support = 50% of salary = 3000 riyals/month (maximum), for up to 24 months.

**Q: Can I employ a Saudi with a flexible work contract?**
**A:** Yes, the “Flexible Work” program allows for contracts with flexible hours (less than 95 hours/month) with relative localization calculation.

**Q: What happens if I don’t comply with wage protection?**
**A:** A fine of **3000 riyals per employee** who was not paid through the system, and freezing of establishment services in “Qawwa” until regularization.

**Q: Is “Tammehir” available only for small establishments?**
**A:** No, it is available for all establishments registered in “Qawwa” and “Social Insurance”, but small establishments have priority in acceptance.

**Q: How do I calculate the localization percentage in “Nitaqat”?**
**A:** (Number of Saudis ÷ total employees) × 100. It is calculated monthly based on Social Insurance data.

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## Useful Official Sources

– **Qawwa Platform:** [qiwa.sa](https://qiwa.sa)
– **Nitaqat Program:** [nitaqat.sa](https://nitaqat.sa)
– **Human Resources Development Fund (Hadaf):** [hrdf.org.sa](https://hrdf.org.sa)
– **Taqat Platform:** [taqat.sa](https://taqat.sa)
– **Maharat Platform:** [maharat.sa](https://maharat.sa)
– **General Authority for Small and Medium Enterprises (Monshaat):** [monshaat.gov.sa](https://monshaat.gov.sa)
– **Social Insurance:** [gosi.gov.sa](https://gosi.gov.sa)

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## Summary

Managing human resources in small establishments is no longer an impossible burden. **The Ministry of Human Resources, Hadaf, and Monshaat** offer an integrated system of supportive platforms and programs — **free or financially supported** — for employing Saudis, training them, and managing their affairs with ease.

**First Step:** Register your establishment in **Qawwa Platform (Qiwa)** today, and start building your Saudi team with confidence.

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*Explanatory article for awareness purposes, does not replace consulting a specialist or referring to official regulations in the Ministry of Human Resources and Social Development.*

Human Resources in Small and Medium Enterprises in Saudi Arabia: Your Comprehensive Guide

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