UAE: New classification system for the private sector will create new job opportunities

The UAE is a place where many companies from almost all types of industries operate and thus, they need to hire employees to carry out essential tasks for them. For this reason, it has a very dynamic job marketplace where you can find job openings. However, there is too much competition among job seekers, and sometimes people can take a long time to find a good position for them. In this regard, the new classification system for the private sector aims to accomplish a change.

In this article, you are going to learn more about this recent change that can boost the creation of diverse job opportunities. Consequently, local and expat talent can take advantage of it. Considering all of these aspects, the UAE has made efforts to encourage foreign investment and job creation. By implementing new initiatives and making changes to the current legislation, the UAE can achieve this. Let us observe:

  1. What is the new classification system for companies?
  2. How will the companies be categorized regarding the new system?
  3. What are the criteria for the new classification of companies?
  4. How can this new classification system improve job opportunities?
  5. How can The Talent Point help you with your job search?

What is the new classification system for companies?

new classification system for the private sector

Recently, the UAE has announced a new classification system for the private sector. This will start on June 1, 2022. According to the UAE’s Ministry of Human Resources and Emiratisation (MOHRE), companies belonging to the private sector will be categorized based on their compliance with directives.

The news was released on Tuesday, and this new classification system for the private sector will divide companies into three different categories.

Therefore, companies need to have a solid HR and legal team that helps them understand this new modification. Employers need to comply with the requirements established by the UAE Authority if they want to continue performing their tasks without any trouble.

Classification system

Private sector companies in the UAE need to comply with the series of regulations established by the Authority to determine the category in which they will be placed.

Thus, this new classification system will depend on the extent of the company’s commitment to the following:

  • UAE Labor Law.
  • Wage Protection System (WPS).
  • Policies for promoting cultural and demographic diversity.
  • Compliance with the resolutions of the labor market.

Therefore, companies that adhere the most to the previous regulations, will classify in the top category.

What is the reason behind the new classification system?

The UAE Government has realized that many local and expat professionals are unemployed. Given that the UAE is a highly diverse country, with a high percentage of its population composed of foreigners, the Authority wants to achieve the following:

  • Improve job alternatives for both local and foreigners.
  • Boost cultural variety in the country’s workforce.
  • Help job seekers when it comes to finding a company that has a higher rating when it comes to adhering to principles and regulations.

In the UAE, there are small businesses but there are also large corporations and conglomerates. The goal is to encourage fairness, variety, and inclusion in all of them. This is with the purpose to create diverse and new job opportunities for everyone in the UAE.

How will the companies be categorized regarding the new system?

The new classification system for the private sector established that companies will be categorized through an automated system. This will ensure transparency when a company changes its classification, as well as it will facilitate the process.

Each corporation should carry out the respective procedures or transactions that will help them change to the new category.

Moreover, the new classification system for the private sector also benefits companies. Companies that are under the national economic priorities and adhere to Emiratization programs efficiently, will receive incentives and exemptions. This is because they are boosting priority sectors, and this is one of the main goals of the UAE Government.

Consequently, what do companies need to do to ensure they have the Tier 1 classification? Let us observe:

  • Provide equal employment openings for professionals.
  • Do the hiring process with justice.
  • Establish policies that promote inclusiveness and tolerance.
  • Build a diverse workforce.
  • Supply profession alternatives to Emiratis and UAE residents.

What are the criteria for the new classification of companies?

new classification system for the private sector

As we have mentioned before, the new classification system for the private sector will divide companies into three categories. These are known as Tier 1, Tier 2, and Tier 3 classifications.

According to the criteria, most companies in the UAE will belong in the Tier 2 category. Some companies will receive the promotion to the Tier 1 category, and they will be entitled to exemptions regarding compliance with the criteria.

But those companies that drop to the third category, will not have it easy. First of all, they will be known as a corporation that is incurring non-compliance with the policies. As a job seeker, you have to look for a job in those companies that are always in compliance with the law.

The Cabinet Resolution No. 18 of 2022 states the new classification system for the private sector.

Tier 1 Companies

Companies that want to be categorized under the Tier 1 classification must have a 100% commitment to the WPS, worker’s rights protection, and comply with policies that promote diversity in the country. Moreover, they have to comply with the regulations of the labour market set forth by the UAE.

Furthermore, they have to meet the additional criteria:

  • Promote cultural diversity by being one of the training and employment centers that engage in this action.
  • Cooperate with the Nafis program to train at least 500 individuals per year.
  • Have an Emiratisation rate of at least three times above the target.
  • Being a company owned by a young citizen (as per the approved standards).
  • Being active in specified sectors and activities as per the Council of Ministers.

Tier 2 Companies

Companies that belong to the Tier 2 are those that do not meet the additional criteria of Tier 1. Corporations need to commit to the WPS, workers’ rights protection, and comply with policies that encourage diversity in both culture and demography in the workforce. In addition, they have to comply with the regulations of the labour market.

So, although they do not comply with the additional criteria, if they have an extent of compliance with the previous aspects, they can get the Tier 2 classification.

Tier 3 Companies

The Tier 3 of the new classification system for the private sector is not so good for the company’s reputation. This is because corporations that have this classification will be known as those that do not comply with the law.

Moreover, job seekers should look for a job in Tier 1 and 2 companies. Thus, Tier 3 Companies will find it harder to hire employees.

Corporations that will be classified under this category are the following:

  • Companies found violating the law. If companies do not follow labour and executive regulations, as well as resolutions for the labour market, will be classified as Tier 3. Moreover, those that do not protect workers’ rights will be classified too.
  • Corporations that lack the commitment to encourage cultural diversity in the workforce and the labour market.
  • Companies that incur any other violation of the Ministerial Resolution No. 209 of 2022. These can be human trafficking, having employees without respective job permits, providing incorrect data, documentation, or information to the Authority, incur in violations of obligations on wages, not complying with housing and safety standards, fake Emiratisation practices, or any other.

How can this new classification system improve job opportunities?

Job seekers across the UAE are always looking for the best opportunity since they want to find their dream job. Although the UAE is a place where there are many professionals, it is possible to find an outstanding position where you can advance in your career.

With this new classification system for the private sector, you can find many more opportunities. This is because the goal is to start creating more jobs aimed at all kinds of professionals in the UAE. Companies should achieve a diverse demographic workforce, and to do this they have to participate in the labour market creating job alternatives for locals and expats.

Here we have some of the best impacts this will have on job seekers:

More job opportunities for Emiratis

The UAE started to implement the Emiratisation program to boost the recruitment of locals. However, not all companies complied with it.

Nevertheless, with this new change, highly-skilled and proficient Emiratis will have more chances of finding a job. Since companies that want to belong to Tier 1 must increase the rate of Emiratisation, it is obvious that the employment of locals will increase.

Thus, employers will create more job opportunities for Emiratis, where they can apply and land a good position. The goal of the UAE Government is to create more than 12,000 new jobs for locals, and it is encouraging private sector companies to do this.

This will help Emiratis to select organizations that they wish to be a part of. However, companies in the third category will face challenges to hire locals. Companies will need to start showcasing their best practices and participate actively in the labour market to hire UAE nationals.

More training opportunities

Organizations that are in categories 1 and 2 will be proactively providing job and coaching opportunities to Emiratis and locals. Thus, it is great for those individuals that are looking for a job where they can grow professionally.

In this regard, job seekers will know the category of the company before they apply. The employer should create job opportunities that allow employees to flourish by offering training options.

Diverse opportunities for everyone

Although the UAE is an Arab country, not all of its population has an Arab or Muslim background. Individuals from the West and the East come to this place to make a living. Thus, you have a highly diversified labour market, with professionals from different cultures.

In this regard, the UAE is trying to eliminate discrimination, and companies that want to be in the first and second categories should aim to create a diverse workforce.

Thus, we expect to see an increase in job opportunities for all people. Moreover, an employer should create job opportunities for everybody, locals, expats, Arabs, Westerners, etc. Since companies must have a culturally diverse workforce, it will employ people with all kinds of backgrounds.

How can The Talent Point help you with your job search?

Here on The Talent Point, we want to help you with your job search. For this reason, we want to bring you always the latest news and changes in regulations so you can know what to expect in your job hunt.

We are one of the top marketplaces where you can find a job and connect with employers across the UAE. You can register in our candidates’ database, upload your resume and start applying for the best vacancies. You can filter your job options according to the specifications you want to make your search easier.

And, if you are an employer looking for top talent, we also have an outstanding solution for you. Register on our website and post a new job to start receiving applications from the best candidates in the UAE.

Do you want to find the perfect job in the UAE? We have a team of specialists ready to solve your inquiries. You just have to call us at +971 43 316 688 and we will guide you. You can also send us your CV to contact@thetalentpoint.com if you want us to help you search for a job. Do not worry, we will not store your personal information

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