Emiratisation isn’t just about integrating Emiratis into the workforce if you’re a business, job seeker, or policymaker in the UAE. It’s a comprehensive government strategy designed to foster economic development. But what’s involved? What laws and policies are in place? How can your business comply with these policies, and how does it influence the public and private sectors?
This guide offers a detailed discussion of Emiratisation, its objectives, its impact, and the strategies for successful implementation. You’ll gain insights on government initiatives, challenges, and the prospects of Emiratisation, helping to clarify the policy and its significance in the UAE’s socio-economic landscape.
Understanding the Concept of Emiratisation
Introduction to Emiratisation
Emiratisation is a government initiative in the United Arab Emirates (UAE) that has been around for over a decade. It aims to increase the employment of Emirati citizens in both the public and private sectors.
While it has seen considerable success in the public sector, the private sector still needs to catch up, with Emiratis representing a mere 0.34% of the workforce.
The government has been working hard to boost this number through its Emiratisation drive, hoping to reduce the country’s reliance on expatriate workers and promote Emiratis’ economic participation and development.
The Objectives of Emiratisation
The main goal of Emiratisation is to get more Emirati nationals into the workforce, especially in the private sector. This policy has led to a significant shift in employment patterns, with organisations striving to create an inclusive workplace that values Emirati nationals’ diverse talents and skills. The government has set specific targets for Emiratisation in various sectors, including banking and finance, telecommunications, human resources, and hospitality.
The UAE government has also launched several initiatives to support Emirati job seekers, like the Emirati Youth Empowerment Program, which provides training and employment opportunities for Emirati youth. They have also introduced programs to support Emirati entrepreneurs, such as the Mohammed Bin Rashid Establishment for SME Development, which provides funding and administrative support services for Emirati-owned small and medium-sized enterprises.
The Impact of Emiratisation on UAE Society
Emiratisation has sparked a strategic shift towards a more balanced workforce, encouraging the inclusion of UAE nationals in various sectors and creating a sustainable future for the country’s economy. It has also positively impacted UAE society, increasing the appreciation of Emirati nationals’ diverse talents and skills.
However, implementing Emiratisation has been challenging. According to a survey conducted by PwC Middle East, retaining Emirati talent in the private sector is a challenge. Many Emirati employees leave their jobs due to limited career growth opportunities, lack of work-life balance, and a preference for government sector jobs over skilled positions. This highlights the need to create a supportive work environment, provide training and development opportunities, and offer attractive benefits and compensation to retain and attract Emirati talent.
Emiratisation Law & Policies
The Emiratisation law is a new Ministerial Decision (No. 279 of 2022). It was implemented by the Ministry of Human Resources and Emiratisation (MoHRE) to regulate the employment quota in private sector companies and increase the participation of UAE nationals in the workforce.
Private sector companies in the UAE must enlist and employ a minimum of 2% Emirati employees of the total skilled workers per annum.
The law also classifies companies into three categories based on their compliance with the rules, with different incentives and penalties associated with each type. Companies that do not meet the Emiratisation targets may face fines and penalties, including a minimum fine of USD 1,634 monthly for each Emirati employee not hired and potential suspension of applications by the company.
The NAFIS program, part of the Emiratisation law, offers benefits to registered employers only private companies who support the program, including a reduction of employer pension contribution for UAE nationals and salary contributions for each UAE national employed under the NAFIS scheme.
Private companies with 20 sector organisations are also eligible for the NAFIS Award, which recognises establishments that excel in hiring UAE nationals and honours talented Emiratis in the private sector.
The Emiratisation law has been updated to include expanded targets for small businesses operating in specific sectors. It requires them to hire at least one Emirati employee in 2024 and an additional hire of one Emirati in 2024 and 2025, with penalties for non-compliance. The updated Emiratisation rules apply to companies in sectors such as information and communications, financial and insurance activities, real estate, professional and technical activities, and more.
The UAE government has made stringent announcements and companies can expect financial and reputational implications for consistent non-compliance with Emiratisation targets.
Emiratisation in the Private Sector
Present State of Emiratisation in the Private Sector
NAFIS (also known as The Emirati Human Resources Competitiveness Council) is spearheading efforts to enhance Emiratisation in the private sector. They’ve set a bold target to incorporate 75,000 citizens into this private sector workforce within the next five years.
The Cabinet has endorsed a decision to elevate Emiratisation rates to 2% per annum for skilled jobs in private sector establishments with 50-plus employees, aiming to achieve a 10% increase by 2026. To ensure adherence, companies that fall 1% short of these employment targets will be subject to a monthly fine of USD 1,634 for every citizen not employed, starting from January 2023.
Challenges Faced by Emiratisation in the Private Sector
Despite these efforts, there are hurdles to overcome. A survey revealed that two-thirds of Emiratis currently employed in private companies are contemplating a return to the public sector. This indicates that while initiatives to draw Emiratis into the private sector are successful, companies need to enhance their retention strategies for national talent.
The perception of the private sector as an unstable employment environment, cultural fit issues, and a preference for administrative jobs are some obstacles to Emiratisation. Strategies such as introducing a nominal personal income tax, enhancing the education system, promoting health care and improvement programs, and equalising salary, benefits, and working conditions between the public and private sectors can surmount these challenges.
The Role of Private Companies in Emiratisation
Private companies are instrumental in the Emiratisation process. They’re mandated to meet specific Emiratisation quotas, which dictate the percentage of Emirati employees they must incorporate into their workforce.
For instance, starting in 2024, private sector companies with a workforce of 20 to 49 workers will be mandated every 20 to 49 employees to employ at least one UAE citizen, and from 2025, they’ll be required every 20 to 49 employees to employ at least two Emirati citizens.
Companies are also urged to invest in future skills to equip young Emiratis for the future of work and cultivate the next generation of leaders. By addressing the preferences and preconceptions of Emirati employees, barriers can be dismantled and long-term appointments secured.
Future Prospects of Emiratisation in the Private Sector
The government has set specific targets for Emiratisation in various sectors. The updated rules of Emiratisation include:
- Stricter enforcement of quotas.
- Penalties for non-compliance with required targets.
- The introduction of new initiatives to support Emirati job seekers.
The government continues to monitor and evaluate the effectiveness of Emiratisation policies and make necessary adjustments to ensure their success. With the various sectors affected, the UAE’s economy is projected to grow and diversify, and the over-reliance on the government as the main employer of nationals could be more sustainable in the long term. Therefore, the private sector must play its own proactive part in creating complementary opportunities in the workplace.
Emiratisation is a crucial component of the UAE’s long-term economic development strategy. It aims to create a skilled and diverse workforce that can contribute to the country’s growth and sustainability. The success of Emiratisation relies on collaboration between the government, private sector, and educational institutions to provide Emiratis with the necessary skills and opportunities for employment.
Emiratisation in the Public Sector
Current Status of Emiratisation in the Public Sector
While the focus of Emiratisation has been on the private sector, it’s essential to acknowledge the role of the public sector in this initiative. The allure of public sector jobs for Emiratis is undeniable, with attractive remuneration, comprehensive benefits, and job stability. This has resulted in a low representation of Emiratis in the private sector.
Public Sector’s Contribution to Emiratisation
The public sector plays a significant role in promoting Emiratisation. The government has launched various initiatives, such as the Emirati Talent Competitiveness Council and the National Program for Emiratisation, to enhance the representation of Emirati nationals in the private sector. These initiatives focus on comprehensive policies, workforce upskilling, youth development, incentives for employers and nationals, and dedicated investments in job opportunities.
Public Sector Challenges in Emiratisation
Despite these efforts, there are obstacles to achieving Emiratisation in the private sector. Many Emirati graduates find securing employment in the private sector more challenging than in the public sector. Furthermore, Emiratis in the private sector often express dissatisfaction with their compensation and benefits packages compared to their counterparts in the public sector. Work-life balance issues also pose a significant challenge, which can deter them from seeking employment in the private sector.
Predictions for Emiratisation in the Public Sector
The government has set ambitious targets for Emiratisation. The aim is to have 10% of private sector roles filled with nationals by 2026 and to employ 75,000 Emiratis in the private sector by the same year.
To achieve these targets, the government has expanded the Emiratisation initiative to include smaller companies and has introduced new rules requiring companies to meet Emiratisation quotas.
The government’s commitment to Emiratisation is part of the country’s broader strategy, “We the UAE 2031,” which outlines the development path for the next decade. This strategy includes the expansion of Emiratisation targets to create more opportunities for UAE graduates and help them develop their talent in diverse industries.
While there are challenges to overcome, the UAE’s commitment to Emiratisation is clear, and the future looks promising for Emirati employment in the private sector.
Strategies for Successful Implementation of Emiratisation
Emiratisation is about integrating UAE nationals into the workforce and nurturing and retaining them, thus forming a comprehensive employee management cycle.
Enhancing Education and Training for Emiratis
One of the key strategies for successful Emiratisation is the enhancement of education and training for Emiratis. This is reflected in the “National Strategy for Higher Education 2030”, designed to fortify the labour market and equip future generations with technical and practical skills.
Several initiatives have been launched to provide training and development opportunities for Emiratis. For example, the Federal Authority for Government Human Resources (FAHR) has introduced the Federal Government’s eLearning Portal (Al Mawrid) to offer expert training and development to federal government employees. Similarly, the ‘Maharati’ system, initiated by the Ministry of Health and Prevention, provides eLearning modules developed in collaboration with international academic and training partners.
Promoting an Inclusive Work Environment
Creating an inclusive work environment is another crucial strategy. Companies need to ensure their workplace policies and practices align with Emirati values and culture. They should also ensure that all employees, regardless of their race, gender, or religion, have equal opportunities to progress in their careers.
Companies such as Schneider Electric and KPMG Lower Gulf have implemented initiatives to promote diversity and inclusion. These include revising recruitment strategies, celebrating diversity, creating inclusive spaces, and ensuring inclusive policies.
Attracting Emiratis to the Private Sector
Attracting Emiratis from the private sector can be a significant challenge due to the gap between education outcomes and corporate life requirements. However, the UAE government has implemented various initiatives and regulations to support Emiratisation in the private sector, including setting quotas for local hire and requiring organisations to achieve Emiratisation ratios.
Building a strong employer brand is crucial for attracting and retaining Emirati talent. Companies should promote their values, mission, and culture to attract Emirati talent through targeted marketing campaigns, social media engagement, and networking events.
Government Initiatives to Support Emiratisation
The UAE government has implemented various initiatives and programs to promote Emiratisation. For instance, the council ‘Nafis’ implements national initiatives to increase Emiratisation in the private sector.
The government has also introduced incentives for companies that hire Emiratis, such as financial support and preferential treatment in government contracts. Companies that don’t meet the Emiratisation targets face hefty fines, providing a strong incentive for compliance.
The Future of Emiratisation
As we look ahead, the UAE government’s proactive approach to Emiratisation is set to continue shaping the nation’s economic and societal landscape.
Expected Impacts on UAE’s Economy and Society
The future of Emiratisation is expected to enhance national identity and pride further, foster a more inclusive society, and bring about economic benefits such as reducing unemployment rates for Emiratis and keeping national wealth within the country.
Implementing Technology in Emiratisation
The role of technology in Emiratisation is becoming increasingly significant. The government has launched various digital platforms to connect Emirati job seekers with potential employers and provide online training. The UAE’s heavy investment in the ICT sector and adoption of new technologies like AI, blockchain, and the metaverse are expected to support Emirati job seekers and employers and contribute to the overall goals of the Emiratisation policy.
The Role of Foreign Companies in Emiratisation’s Future
Foreign companies are encouraged to participate in Emiratisation by hiring Emiratis and providing training opportunities. This collaboration between the public and private sectors is key to enhancing Emiratisation efforts and developing the skills of Emirati nationals to meet the demands of the firms and the evolving job market.
Predictions for Emiratisation in the Next Decade
In the next decade, technological advancements are expected to further support Emirati job seekers and employers. Increased collaboration between the public and private sectors will continue to enhance Emiratisation efforts.
The UAE government aims to achieve 50% Emiratisation in the full private sector workforce by 2030.
This signals a clear commitment to building a more inclusive and sustainable economy. This expansion of Emiratisation targets will require private sector firms to adapt their hiring and recruitment practices. Still, it also presents an opportunity to tap into a pool of talented and motivated workers and create a more diverse and inclusive workplace.
Reflecting on Emiratisation
Emiratisation is a core strategic policy that’s all about ensuring the growth and prosperity of the UAE by empowering its citizens. It’s geared towards including, empowering, and elevating the Emirati workforce in key sectors. Both collective effort and individual commitment are needed to steer the UAE towards a prosperous, inclusive future.
When you look at the shifts in employment patterns and the emphasis on diverse talents, you can see they’re fundamental to the goals of Emiratisation. Despite the challenges, the government’s determination, along with the private sector’s strategic efforts, paints an optimistic picture of the success of Emiratisation. This success isn’t just about the program itself. It’s also about contributing to the societal and economic development of the UAE.
The journey of Emiratisation may be challenging, but it’s also a catalyst for growth, significant change and a future filled with opportunities for Emiratis.
