Abstract—Employee turnover as a term and its sources have been introduced and conducted in several studies in the past few decades. The lost knowledge as a result of this turnover on a large scale as a” country scale” is the topic that will be discussed and presented in this paper. Nitaqat as a localization program that have been forced by the Saudi ministry of Labour has caused a huge cases of employees turnover. Due that turnover, the knowledge retention has been affected. This paper examines the employee turnover sources, its effects and forwards a suggested strategy that linked to HRM on how to minimize the lost knowledge that caused by the localization program Nitaqat. Index Terms—Employee turnover, Localization, Nitaqat, Saudia Arabia, Human Resource Management, Knowledge Management. I. INTRODUCTION Around two years ago, the Kingdom of Saudi Arabia introduced a new program, called Nitaqat for supporting the Saudization initiative that has been discussed since the beginning of the millennium. Saudization means replacing foreign employees in the Kingdom of Saudi Arabia with locals [1]. The aim of this initiative is to ensure that a certain proportion of jobs in Saudi Arabia are occupied by locals in order to place limitation on foreign workers. One of the biggest problems in Saudi Arabia is the unemployment rate of local residents. In 2004, according to Looney, the percentage of non-working Saudis was 8.2% [2]. This increased in 2010 to 10.8%. Moreover, these figures are for male citizens only; other estimates for both male and female citizens range as high as 30% [3]. “Nitaqat” is an Arabic word that means “ranges” or “limits”. The primary goal of this program is to assist the Saudization initiative and to absorb Saudi job seekers. Theoretically, this should reduce the unemployment rate in the country by forcing companies and firms to hire Saudis. The Saudi Ministry of Labour announced the program on June 2011. The program sets penalties for non-compliance with the rules. One of the decisions that accompanied this program was the restriction of foreign workers who had lived in Saudi Arabia for less than 6 years for both red zone companies (companies having less than 10% local workers) and yellow zone companies (from 10-20% local workers). Companies in Saudi Arabia that were not employing enough local workers under the new rules were notified they may Manuscript received May 6, 2014; revised July 10, 2014. The authors are with the School of Property, Construction and Project Management, RMIT University, Melbourne, Australia (email: nalshanbri@hotmail.com, malik.khalfan@rmit.edu.au, m.ali.noor@hotmail.com, debopriyadutta2@gmail.com, kevin.zhang@rmit.edu.au, tayyab.maqsood@rmit.edu.au ). have their foreign workers taken away through the non-renewal of visas resulting into the inability to obtain renewed working visas for existing workers. The Saudi Labour Minister mentioned that it was the right time to begin to force companies in the Saudi private sector to hire locals [4]. Nitaqat divided the Saudi private sector enterprises to four zones, currently some of them are situated in the green and excellent ranges which have achieved reasonable and acceptable rates of localization. The enterprises that are located in the yellow and red zones, they did not employ Saudis, or that the Saudization rate is less than acceptable and they are given sufficient time to correct their positions in order to move to the green and the excellent zones by the Saudi ministry of Labour. The aim of the ministry through Nitiqat program is to use Saudization rates as a competitive feature among the private sector firms. The firms that engaged with Nitiqat and within the excellent and the green zones will be provided with a package of facilities and motivations, making it easier for dealings with their employees and worker unions and gives them sufficient flexibility to achieve the levels of growth. The program also aims to create a much better balance between the advantages of hiring a foreign worker and the Saudi worker by raising the cost of maintaining foreign workers in the red and yellow ranges. Also, Nitiqat can be considered as a monitoring tool for the Saudi labour market that aims to achieve a growth in jobs for local residents in the private sector and to move the unemployment rate in the country to lower levels. Nitaqat, as the Saudi ministry claims, came into place to meet the directives of the country with regards to finding opportunities for Saudi Arabia’s citizens, and to achieve growth and stability in both social and economic areas as it meets the needs of two important stakeholders; businessmen with their needs in expanding their businesses and improving the development of the national economy. The second stakeholders are the Saudis, in terms of these creations of jobs are for them aiming to absorb and integrate them into the work force in order to improve the development of the national economy. Nitaqat program provides an integrated set of incentives for those companies that are working to increase their Saudi employees, which also clearly defines the consequences faced by those companies that are unable to achieve the needed percentage of Saudi employees or have less than required. As it was mentioned before, Nitaqat classify the private sector enterprises to (4) ranges (platinum, green, yellow and red) as well as enterprises that have less than 9 employees. The Saudi ministry of Labour take in Employees’ Turnover, Knowledge Management and Human Recourse Management: A Case of Nitaqat Program Nawaf Alshanbri, Malik Khalfan, M. Ali Noor, Debopriya Dutta, Kevin Zhang, and Tayyab Maqsood International Journal of Social Science and Humanity, Vol. 5, No. 8, August 2015 701 DOI: 10.7763/IJSSH.2015.V5.543