Emiratisation Implications in the UAE Private Sector

The United Arab Emirates is a country that continues growing and thriving. It has been a process of more than 50 years led by an outstanding government. The strategy that the government has established receives the name of “Emiratisation”. The main purpose it has is to create growth opportunities for nationals within the country, given that they have been competing against foreign talent for job openings.

The key of the strategy lies in a particular action: the private sector must have at least 10% of Emirati nationals in their payroll.

In this article, you will learn all you need to know about Emiratisation in the UAE private sector.

1. What exactly is “Emiratisation”?

2. The Emiratisation Agenda.

3. What are the Emiratisation benefits?

4. Sponsored Incentives.

5. Why is Emiratisation important?

6. Which is the most common sector to work in: private or public?

7. Recent updates of Emiratisation in the private sector.

8. Implementing Emiratisation, which are the measures to be taken?

9. Scope of Emiratisation Laws.

10. Localization of jobs for the private sector.

11. Challenges persist.

12. Finding a job in the private sector with The Talent Point.

1. What exactly is “Emiratisation”?

Emiratisation is a fairly new concept adopted in this side of the world, and as such, it can be quite a mouthful. Its pronunciation is the same way you would say words like “Nationalization” or “Organization”.

To put it simply, Emiratisation is the government’s endeavor to have the private sector hire UAE citizens. Moreover, the idea is that they are given a meaningful role in the companies. 

By increasing Emirati presence in the private sector, their role in the economy of the country will become more important. Emiratisation aims to motivate development in general. Young and adult people will put their skills into practice with the generation of well-paid jobs. Similarly, by extension, this will increase motivation for entrepreneurship and vocational growth for workers.

The main purpose is to bring more chances to the table for UAE citizens and avoid expatriation.

2. The Emiratisation Agenda

The base that supports Emiratisation has been having the private sector include 10% of citizens within their files. However, this only represents one of the main steps the government designed to achieve the main goal. Supporting citizens so that the country’s development and economy rests on their shoulders at the same time.

Outsourcing was the main tool the UAE used to thrive and become a powerhouse. Of course, it was a gigantic success. The country became a gathering point for foreigners to work and to live even rather glamorously. Naturally, the Emirates attracts highly talented workers who desire to live abroad in a modern and dynamic atmosphere. Big organizations want them because of their knowledge and the diversity that comes along with them.

However, the government is now creating this plan to give greater opportunities to nationals in the private sector. Whilst they hold a big number of spots in the public industry, it is necessary that it reaches a more equal and inclusive distribution on both sides.

3. What are the Emiratisation benefits?

Aside from its product or the service they offer, diversity is the best competitive advantage a firm can have. The most effective teams reflect the demographics of the people they serve, and nobody knows the UAE as Emiratis do. That is why there is no reason to wait for a five years deadline. For a company to be successful, they have to start hiring national talent right away.

In addition to this, there are many advantages that employers must consider when hiring Emiratis before the deadline.

4. Sponsored Incentives

The government wants UAE nationals to find jobs, which is why they provide incentives to the companies who comply. For instance, the salary rise for graduates to 5000 AED should they take a private-sector job.

It was common for employers to hire foreigners due to their lower salary expectations for similar skill sets. However, that is a different story nowadays. Understanding this, the government provides the incentive and the companies collaborate by attracting skillful Emirati workers. Furthermore, the government offers economical support for the employee’s spouse and children as well.

There is also the initiative of paid programs oriented to train and hire. These apply to private and semi-private companies of different areas, and the amounts can vary. Companies can fill skill gaps, and also it makes it more likely for them to hire and capacitate new graduates.

Moreover, when companies fulfill the Emirati recruitment requirements, they can apply for incentives for non-national employees as well.

4.1 Strengthen your employer’s brand

Companies can build their brand and improve their image towards locals by hiring Emirati talent. They will provide their skills to the company and at the same time, it is important to give them reasons to apply for your company above others.

Making your brand stronger will make you look more attractive to the right set of applicants. As a company, reputation is of the utmost importance and you can use it as a marketing weapon. To be able to make a match with candidates is not a matter of titles only, it is fundamental to be on the same page when it comes to personal and professional ambitions.

On the other hand, if you are currently looking for a job here you have some tips for a remarkable application

4.2 Referrals reduce your recruitment costs

Depending on the strength of your brand, the costs for hiring nationals reduce thanks to the support of local advocates. Employee referrals hold a lot of weight because your present employees are familiar with your company’s vision, goal, and needs, as well as the working culture and environment.

Companies can remain competitive thanks to that diminution in hiring costs. They can break even with local quotas and give better opportunities to their work team.

4.3 Diversify your organization at every level

Employing nationals in the private sector can turn into a great chance to add more diversity to your company. Diversity is not only about gender or ethnicity, but age as well. Organizations have to consider both professionals with experience and new graduates to create a balanced and diverse environment.

5. Why is Emiratisation important?

The financial sector in the UAE continues to become more and more competitive. This is where Emiratisation becomes essential. As the private sector embraces the initiative, they will be more influential in the market.

Furthermore, Emiratisation increases the country’s options to be more competitive worldwide because it would not have to rely that much on foreign employees and investors. The private sector can design training for nationals to avoid them from asking the government for financial support.

Emiratisation also addresses the major issue that represents foreigners taking over job positions. This way, the employment of citizens in high-standard positions becomes more regular. By extension, jobs are distributed equally.

6. Which is the most common sector to work in: private or public?

According to data, more than 80% of Emiratis employed in 2017 worked for the federal or municipal government, with less than one in ten working in the private sector. Many Emiratis also work for government-owned or semi-government companies, for instance, local banks.

Meanwhile, most of the expatriate population has increased in Dubai and most of the people are searching for jobs in Dubai and including jobs in the private sector.

Making the private sector thrive in this way and reducing oil dependence is a huge priority for the UAE.

7. Recent updates of Emiratisation in the private sector

As of now, the government announced that private companies’ payroll must contain at least 10% of Emirati nationals.

Within the next five years, they will enforce this law, starting up with 2% in the first 12 months. This according to the Minister of Cabinet Affairs Mohammad Abdullah Al-Gergawi.

Emiratisation will apply only to “skilled labor” jobs. The government will work alongside the companies of the private sector to achieve the final goal by 2026,

8. Implementing Emiratisation, which are the measures to be taken?          

To establish Emiratisation at different levels, The Ministry of Human Resources and Emiratisation advises the private sector to implement a special bureau for it, including quotes and incentives.

Also, the government will provide about US$ 6.5 billion to create 75,000 jobs for citizens in the private sector. Similarly, they will grant a number of monetary rewards for nationals. This will apply especially to areas like programming, entrepreneurship, and nursing.

  • By 2026, the government hopes to have 10,000 Emirati nurses.
  • Locals working in the private sector will get an 800 dirham monthly child allowance.
  • Emirati government employees who want to start their own business will be able to take a year-long partially paid leave of absence.
  • The government will fund training Emiratisation programs for Emiratis who want to advance their careers in the private sector.

All of these initiatives are part of a project they have named “Projects of the 50”, marking the 50th anniversary of the unification of the emirates.

9. Scope of Emiratisation Laws

According to Labour Law, foreign nationals can only be hired after receiving approval from the Ministry of Labour and only if there are no qualified UAE nationals available to fill the position. These provisions are a Constitution’s extension, which mandates that the government ensure that all citizens have access to employment.

However, Emiratis still do not have enough presence in the private sector. Moreover, recently the Ministry has established orders to grant opportunities in different areas, especially in the private sector.

Some of those orders dictate that employers have to recruit enough national workers and fill out a minimum quota, keeping them as part of the staff. These orders apply to companies with more than 100 employees. The Ministry set this in motion in 2005.

The quotas are applied in the following way:

  • Commercial entities (more than 50 employees): 2%
  • Banks: 4%
  • Insurance companies (more than 50 employees): 5%

Regardless, the Central Bank and Insurance Authority have the authority to set quotas and increase them year after year for banks and insurance businesses.

Companies with a lower rating must file mandatory financial guarantees. The amount of them is determined by the employer’s category (as set out in the relevant Order).

You can check this to get a more general outlook on UAE new labor laws

10. Localization of jobs for the private sector

In order to promote Emiratisation, the Ministry of Human Resources and Emiratisation set up a plan to find more jobs in the private sector. Since 2017, companies registered with Tas’heel’s website services and also have at least 1,000 employees have to hire nationals for data entry positions.

Also, the mandate states that every construction with 500 workers or more has to employ at least one Emirati health and safety officer.

11. Challenges persist

The hiring of UAE nationals has, on one hand, increased in the past months. Demand has risen from the private sector companies according to recent recruitment studies. Nonetheless, Emiratisation statistics also show that as of last year, Emiratis constituted 0.5% of the personnel within private sector companies. The difference is huge compared to the 60% representation they have in the public counterpart.

The study indicates that many organizations continue to fall short in the face of fierce competition for Emirati prospects. According to the survey, particularly when it comes to attraction and retention initiatives, as well as cultivating a workplace culture that appeals to them.

Experts say that locating and attracting Emirati talent of the best class is the main challenge for employers. Even though there are plenty of people looking for a job, those with the necessary expertise and skills are rare. The competition for such talent is big, and employers have to use strategies focusing on attracting and keeping those valuable workers over the competition.

12. Finding a job in the private sector with The Talent Point

Navigating among all the different rules and requirements in the private sector while looking for a job can be a headache, but do not worry, you are in the right place. In TheTalentPoint, we are one of the top-tier marketplace platforms since we keep up with all the regulations and rules so you do not have to.

Our worksite has all the tools you need to filter your search and find an excellent job according to your availability. Register, upload your resume, fill in your profile and get ready because thousands of possible employers are looking for the perfect candidate.

Would you like to contact TheTalentPoint for more information? You can call at +97143316688 or send an email to contact@thetalentpoint.com, and you will talk to one of their representatives that will gladly answer all of your questions.

Kinjal

Kinjal
Kinjal works at Connect Service Middle East as a sales assistant. She graduated from Mumbai University in India and moved to the United Arab Emirates in 2018. She specializes in UAE mainland company formation, freezone company formation, bookkeeping, VAT registration, and PRO services.

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