Saudi Arabia is planning to offer cash incentives to encourage public sector employees who meet certain criteria to resign.
To be administered by Saudi Ministry of Finance and the Ministry of Human Resources and Social Development, the ‘Golden Handshake’ program plans to commit 12.7 billion riyals ($3.38 billion) over a three-year period in a bid to shed unproductive employees and increase efficiency.
In the recently announced budget for 2025, government employee wages accounted for nearly 44% of government spending as compared to 14% for capital spending.
Public sector jobs have traditionally been preferred due to higher wages, better incentives and end-of-service benefits, and fewer hours.
According to the Saudi Gazette, the program is designed to motivate public sector employees who want to resign from service and includes provision of financial incentive to the resigning employee, specifying the age groups of the targeted employees, years of service, approval of the targeted entity and employee. The Golden Handshake Law is related to reducing costs and that anyone who benefits from the program will not be accepted in any other government agency.
“The Golden Handshake programme has numerous goals but the two main targets are upgrading public sector performance and rationalising expenditure.” Alaa Dibsi, a manpower consultant at a private company.
Ihsan Buhlaiga, a former Shura (appointed parliament) member added that, “Saudi Arabia no longer cares for how long the employees stay in office but how much they produce. This plan will no doubt encourage civil servants to take up jobs in the private sector… it will also ease the financial burden on the government.”
Writing for The Capitol Institute, AbdAziz Suneid comments that:
“The implications of the Golden Handshake go beyond just retirement. It’s about reshaping the job market in Saudi Arabia, making it more dynamic and inclusive for young Saudis. By opening up positions in the civil service, the program aims to create a ripple effect, encouraging entrepreneurship, innovation, and new employment opportunities. This isn’t just about filling vacancies; it’s about changing the culture of work in the public sector, making it more appealing to the younger demographic who bring with them modern skills and perspectives.”
