Text Mining Job Descriptions in Saudi Arabia to explore Firm-Hiring Preferences: Gender, Nationality, and Education-Levels

In prior articles, I proposed the case for utilizing high-frequency data sources as a proxy measure for labor demand. Specifically, I argue that the need for timely measures to monitor labor markets is even more pertinent across Arab countries where countries mainly still publish quarterly or annual labor force surveys (LFSs), compared to other regions where monthly LFSs are the norm. In this article, however, I employ basic text-mining methods to learn about employer hiring preferences in terms of gender, nationality, and educational qualifications. Furthermore, to answer my question, I use thousands of online job postings in Saudi Arabia between November 2020 through March 2021.

Gender Hiring Preferences

First, I looked for specific words or phrases within the scraped job descriptions data that may tell us about whether a given firm is strictly looking to hire a male or female, or whether they prefer a particular gender.[1] Several economic and legal reforms were implemented in the past four years in Saudi Arabia, which were aimed at both increasing female participation in the workforce and reducing employment barriers faced by women. These reforms have largely contributed to a significant increase of 33% in the female labor force participation rate since 2017, reaching 31.3% in Q3 2020, relative to 21.2% in 2017.

Additionally, while substantial progress has been made in inducing more women to join the labor force, little to no improvements with female unemployment rates. Indeed, the unemployment rate for Saudi women stands at 30.2%, which is approximately three times higher than that of Saudi men. Therefore, again one objective that I have, is to find words or phrases in job postings that may indicate that certain employers or sectors prefer hiring women as opposed to men or vice versa.

• Across the roughly 6,300 job postings that I explored, 5.4% of which specify a gender that the firm prefers to hire or in numerous cases, a firm would strictly state that they are looking for females or males.
• Approximately 5% of total job postings indicate explicitly that they are looking to hire females only. In other words, most job ads that state a preference to one gender, clearly mention that they want to only employ women.
• I then checked how gender hiring preferences vary by sector, and table 1 below shows a sample of sectors with and without strong hiring preferences.
• One can immediately notice that private consulting firms classified under the, “Business Services” sector mostly have merit-based hiring based on one’s qualifications and experience, rather than their gender. For instance, only 6% of job postings indicated a preference to hire females and 2% preferred male candidates.
• Another plausible explanation for the low preference for a particular gender amongst firms in the “Business Services” or “Information Technology” sectors is that such firms have mostly shifted to a mixed-gender working environment and thus would primarily hire women and men who are open to work with the other gender.
• On the other hand, the situation is the opposite with the job descriptions listed by employers in the Government or Retail sectors, where a gender hiring preference is evinced. In the former, 90% of job ads explicitly mention that they are targeting female candidates only. This high rate is likely due to many government entities still operating in a gender-segregated office environment and the government’s efforts to absorb the rising number of females in the workforce.

Table 1. Share of job postings by sector where a specific gender is preferred for hiring.

[1] Job descriptions with a preference to a specific gender included words and/or phrases such as “male candidates only”, “males only” ,”female”, “females only”, “بائعة”, “preference given to females”, “females only”, “للنساء”).

Nationality Hiring Preferences

The J. Peck (2017) paper documents well the empirical impact of nationalization quotas through Nitaqat program, on firms’ survival rates, employment gains for Saudis, and overall employment in the workforce. I instead focus here on how nationalization quotas imposed by the Ministry of Human Resources and Social Development might shape labor demand in Saudi Arabia.

Specifically, using a dataset of 6300 scraped job descriptions, I find that roughly 11% of firms explicitly mention that they will only recruit nationals.[2]

Ironically, there is also a small share of job postings that only target non-nationals and prefer a specific nationality such as, “preference given to Indian candidates.” Furthermore, it is important to mention that the 11% proportion of firms strictly recruiting nationals is a very conservative estimate to employers’ actual hiring preferences. This is because one can reasonably argue that many firms do have a preference, albeit not explicit in their job ads, to only hire Saudis to satisfy their nationalization quotas, or only foreign labor given their weaker bargaining power and limited labor market options.

• In table 2, I explore variation in nationality hiring preferences by sector.
• Again, one can notice considerable differences by the selected sectors below. For instance, consistent with the pattern we observe with gender hiring preferences, private firms in the “Business Services” and “Information Technology” sectors hire mostly based on merit and qualifications and are generally less likely to restrict job applications to citizens. On the other hand, firms operating in sectors related to national security or that may require access to sensitive information such as “Biotech & Pharmaceuticals” are more likely to restrict job applications to Saudis.

[2] English and Arabic words and/or phrases indicating employer preferences for a specific nationality: “Saudi national”, “be Saudi”, “only Saudi”, “للسعوديين”, “Saudi nationals”. Other job descriptions that strictly target non-Saudis include “preference given to Indian candidates.”

Table 2. Share of job postings by sector where a specific nationality is preferred for hiring.

Skills and Educational Attainment Hiring Preferences

Third, I wrote in an earlier article on the obvious selection-bias issues that exist with this data, and how employers searching for candidates online are likely targeting skilled labor with specialized educational qualifications. Indeed, there is strong evidence that online job postings are tilted towards more educated and skilled labor. [3]

• Only 7.6% of job ads that mention a specific educational level, are looking to hire candidates with a High School degree. The figure is even lower if we account for all job postings whether they mention a required education level at 3% of total jobs.
• While job openings demanding candidates with a Bachelor’s degree or higher represented approximately 92.5% of postings that specify an educational requirement, and 36.8% of total job ads.
• This low demand for individuals with a HS degree may partially explain why the unemployment rate for Saudis with a HS degree in Q3, 2020 stood at 14.3%, and 33.8% for females with a HS degree.
• Furthermore, individuals with a HS degree represented approximately one-third of jobless Saudis in the same quarter of 2020.

Demand of Education-level by Sector

• In figure 1, I visualize which sectors demand a particular education-level, and several patterns emerge.
• First, most job postings by firms in the “Education” sector require a PhD degree, and those employers include STEM research centers and four-year universities. Furthermore, it appears that these firms rarely recruit candidates with less than a PhD online and likely use other recruitment techniques to hire such workers.
• On the contrary, no job postings in the “Retail” sector are looking to hire PhD candidates, and the majority of employers are searching for individuals with a Bachelor’s degree, followed by those with a Master’s or HS degrees.
• The “Health Care” and “IT” sectors offer an interesting case where there is variation or diversity in the demand for specific educational qualifications within the sector itself. In other words, firms in those sectors tend to be job creators for workers with different educational backgrounds.
• If this finding generalizes to the overall labor market, policymakers should where applicable, thoroughly study the barriers that firms in such sectors may encounter and promote their future growth.

Figure 1. Employer demand of worker-educational attainment by sector

[3] It is very likely that I do not fully capture how often employers mention a specific education-level. This is because I searched for over 23 words and phrases, but there is likely more job postings requiring a specific education level that I have missed:
“high school”, “Bachelor or above”, “master”, “phd only”, “Bachelor’s”, “HS”, “BS”, “BA”, “جامعي”, ” دكتوراه”)