Labor Market Tracker: Monitoring Saudi Arabia’s Labor Market Through Job Postings Data
In an earlier article, I explained how job postings can be used as a proxy measure to monitor the labor market’s health, particularly in terms of labor demand. I further proposed that this approach can be used as a low-cost method and supplemental measure to conventional labor force surveys (LFSs), and especially across the Arab world where LFSs are published quarterly and often take months before being published. In this article, I have added job postings data for Saudi Arabia for December 2020, and will be comparing it to November’s data, to track labor demand during the 4th quarter of 2020.
First, it is important to note that data from job postings is susceptible to selection bias issues and that the firms that post for jobs online are likely not representative of the entire population of firms in Saudi Arabia. For instance, it is reasonable to assume that larger companies are overrepresented in this dataset because many small firms likely rely on other means to hire their workers, and thus are not captured in the following graphs. For instance, 63% of companies in my dataset have over 1000 workers, according to Glassdoor’s estimates of firm size.
In figure 1, I visualize job postings for November and December combined by industry. One apparent pattern emerges in that technology-related companies lead other industries in terms of job openings. We can further notice that service-based industries such as construction, food services, and hotels still fall behind other industries in terms of hiring. However, this might be also driven by the self-selection bias issues discussed in the earlier paragraph, where technology firms are likely overrepresented in this dataset.
In figure 2, I visualize data by sector, and we can see that the IT sector leads other sectors in terms of labor demand with a large margin, followed by the Business Services and Education sectors. This likely highlights the ability of such sectors to continue operating normally despite the pandemic, as workers in such sectors may not need to work from the office five days a week. This compares to the Retail, Restaurants, and Tourism sectors where job postings remain low, as firms cannot operate virtually and workers need to complete their job tasks in person.
In figure 3, I compare job postings by sector for November and December, respectively. One interesting pattern is that across most sectors, labor demand in November was higher than in December. While it is difficult to make conclusive statements on this, one plausible explanation for the relatively lower labor demand in December was the increase in Covid cases during December, which may have raised concerns over a lockdown amongst businesses. Indeed, in the first week of February, the government suspended indoor dining and entertainment, while schools continued to operate virtually. In an upcoming article, I will be looking at job postings through February to assess whether rising concerns over a lockdown (measured in terms of increasing Covid cases) are correlated with less job openings.
In figure 4, I look at job postings for November-December combined, to see which companies had the highest job postings. For instance, we can see that Amazon had 26 job postings, and two of the top three firms were government funded research centers. Specifically, the King Abdullah University for Science and Technology (KAUST) had the highest job openings at 36 postings, in the November-December period.
Finally, based on the most common job titles in November and December combined, there appears to be high labor demand for individuals with managerial and business-oriented skills. However, again this may reflect the type of firms that post jobs online and the skill level and qualifications they are searching for, rather than the qualification that other firms in the market may demand.
1- Account Manager, with 12 openings.
2- Project Manager, with 9 openings
3- Business Analyst, with 5 openings.
