GLMC And World Bank Group Release “A Decade of Progress” Report On Saudi Arabia’s Labor Market Transformation

Riyadh: The Global Labor Market Conference (GLMC), in collaboration with the World Bank Group and the Ministry of Human Resources and Social Development, announced the release of a report titled “A Decade of Progress”, offering a comprehensive analytical overview of the labor market transformation witnessed in Saudi Arabia since the launch of Saudi Vision 2030 and the Labor Market Strategy.

The report is grounded in a time-based comparison between 2015, as the baseline year prior to Vision 2030, and 2025, enabling an assessment of the tangible impact of reforms and policies led by the Ministry of Human Resources and Social Development. It also highlights how these efforts have contributed to modernising labor market institutions, strengthening participation across different groups, and enabling the private sector to serve as a key engine for job creation.

The report details three major transformations that have reshaped Saudi Arabia’s labor market:

First: Labor market activation and strengthened inclusiveness The report documents a notable expansion in the productive labor force, driven by an increase in labor force participation to 67.1% by 2025, alongside a rise in the net number of employed Saudi citizens over the decade. This reflects a measurable demographic dividend, captured through combined gains in participation and employment. Overall unemployment recorded a significant decline, reaching 2.8% by mid-2025, as increasing numbers of economically inactive individuals moved directly into employment. This is reflected in higher employment-to-population ratios and a reduction in labor supply constraints associated with inactivity.

This activation and inclusiveness is further reflected in improved outcomes across key groups. Female employment increased from 11% in 2015 to 32% in 2025, while employment among mothers rose from 8% to 45% over the same period. Youth employment (ages 18–24) increased from 10% to 33%, while the share of youth not in education, employment, or training (NEET) declined from 40% to 25%. Over the decade, the share of youth engaged in either education or employment also increased significantly.

Second: Private sector dynamism and an expanded role in employment The report highlights a structural shift in the role of the private sector, with the share of Saudi citizens employed in the private sector reaching 52.8% by Q2 2025, alongside a notable transition, particularly among women, into private sector employment. This shift reflects the growth of a more competitive private sector, as most net job creation for Saudi citizens is attributed to private sector employment. The share of employment in micro-enterprises increased from 6% to 26% of total employment, underscoring the sector’s vitality.

This improvement has been supported by a sustained decline in labor market mismatch over the decade, and an increase in education-to-job matching from 41% in 2015 to 62% in 2025, reducing skills-related barriers to employment. Labor market frictions also declined, reflected in a notable rise in job-to-job transitions and increased labor mobility towards private sector firms.

Third: Deep shifts in social values and attitudes towards work The report notes significant shifts in social norms and job search preferences. The share of individuals unwilling to work declined from 49% to 12%, while the preference gap between the public and private sectors narrowed considerably. The share of jobseekers who were exclusively seeking public sector jobs fell from 60% to 10% for men, and from 48% to 22% for women.

A large share of jobseekers now target private sector opportunities, reflecting stronger alignment between work preferences and actual job search behaviour. Social norms related to women’s employment also shifted substantially. Acceptance of women working in mixed-gender workplaces has increased, directly contributing to higher female employment in private sector companies, expanding opportunities available to women, and strengthening their integration into the labor market.

The report concludes that the progress achieved over the past decade provides a strong foundation for the next phase of labor market development. Saudi Arabia has already begun leveraging data and advanced analytics to strengthen policy quality and programme effectiveness, while continuing to invest in skills development and enhance workforce readiness for the requirements of the new economy. The report highlights the importance of sustaining public-private collaboration and strengthening labor market flexibility to support inclusive growth and economic diversification and to ensure the Saudi labor market remains responsive to the rapid changes shaping the future of work.

Cristobal Ridao-Cano, the Practice Manager for Social Protection and Labor in the Middle East and North Africa, Pakistan, and Afghanistan at the World Bank, said, “The private sector is now one of the driving forces behind new job growth in Saudi Arabia, in line with its economic diversification vision. Employment ratios increased as inactive individuals moved into jobs, driving a notable drop in Saudi unemployment and expanding the productive workforce. The Knowledge attained from Saudi Arabia’s transformation model can be transferred to other countries.”

The report, titled “A Decade of Progress: Inside Saudi Arabia’s Labor Market Transformation: Indicators and Shifts between 2015 and 2025,” forms part of GLMC’s efforts to advance evidence-based dialogue and develop practical solutions that support policymakers in navigating labor market transformations. As the third edition of the conference convenes in Riyadh, with participation from more than 200 ministers, policymakers, business leaders, experts, and representatives of international organisations, the report serves as a practical reference to support specialised discussions, knowledge exchange, and collaborative action to strengthen labor market efficiency and inclusiveness at both the regional and global levels.