UAE expands the scope of nationalisation of workforce

financialexpress.com:

By Irfan Ahmed Nazir

On 11 July 2023, the United Arab Emirates (UAE) government announced significant changes to the rules on the nationalisation (Emiratisation) of the workforce, aiming at employing UAE citizens in the vast majority of companies in the country. Under the new rules, private companies with 20 to 49 employees must hire one UAE citizen by the end of 2024 and two by the end of 2025. The new rules will allow fresh Emirati graduates to explore options in start-ups and small-and-medium enterprises (SMEs) to start their careers.

In recent years, the UAE, like other Gulf countries, has been prioritising the employment of its citizens in the private sector through its Emiratisation drive. Traditionally, UAE citizens prefer employment in the public sector, which ensures job security and high wages. As the country moves towards a post-oil era, the UAE government needs its citizens to acquire skills and expertise to diversify its economy. Besides, the public sector cannot accommodate the growing number of fresh Emirati graduates every year. The only option for the government is to encourage UAE citizens to look for opportunities in the private sector.

In 2022, the UAE Ministry of Human Resources and Emiratisation (MHRE), for the first time, set quotas for private companies with over 50 employees to hire UAE citizens annually and gave a deadline to achieve them. As per this Emiratisation rate, companies must increase their Emirati employees by two per cent annually, with an anticipated target of 10 per cent by the end of 2026. However, it applies only to high-skilled jobs and exempts free-zone companies. In February 2023, MHRE fixed the rates to a one per cent increase every six months to attain the desired target.