What is Emiratisation?
Emiratisation is an initiative by the government of the United Arab Emirates to ensure that Emiratis are given a chance to indulge in meaningful work, especially in the private sector. As part of Emiratisation, companies, especially in the private sector, must employ a certain number of Emiratis in their workforce.
However, the rules around Emiratisation vary according to the size and industry of the company in question. According to the Ministry of Human Resources and Emiratisation, companies with at least 20 expatriate employees are required to hit a quota for the first time, hiring at least one UAE citizen in 2024 and another by 2025. This rule applies to privately-owned companies across 14 different sectors, including real estate, education, construction, and health care.
Emiratisation focuses on enabling the local population to advance professionally, learn meaningful skills, build relevant experience, and understand the dynamics of the corporate world to ensure they are just as skilled as any expatriate for a specific role. The UAE government is encouraging the Emirati youth to challenge themselves and emerge as resourceful talent that can excel globally. Moreover, Emiratisation also focuses heavily on ensuring that Emiratis contribute to the national income and social sustainability.
What is the Goal of Emiratisation?
Emiratisation is a well-thought-out initiative by the UAE government aiming to ensure professional growth and recognition for the Emiratis in the UAE. This initiative was first launched in the 1990s when the region experienced a massive influx of expatriate population to fill various professional roles.
Blue-collar jobs were not considered a problem, as most jobs in the service industry, for example, jobs like drivers, cleaners, and builders, were expected to be occupied by expatriates from third-world countries. However, the point of concern for the government was that even for white-collar jobs such as engineers, doctors, bankers, etc., there was a need for the international population to fill out these roles.
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The government worried with many businesses establishing themselves in the country and creating opportunities, the Emirati population is unable to benefit from them. Many expatriates who established their own private companies in the UAE have hired even more expatriates to run their businesses. This also led to cultural monopolies across many industries. Emiratisation was the solution, and it has various long-term and short-term goals, which include:
- Increase the number of Emiratis in the national workforce to ensure that the local population is not isolated from the private sector in the country.
- Decrease the labor dependency on expatriates to ensure that the local population is not any less resourceful in comparison.
- Enable Emiratis to have a fair chance at meaningful work to ensure that they build the right skills that make them just as impactful as any other candidate for a specific role.
- Ensure that Emiratis make a significant contribution to the national economy to minimize the dependency on expatriates for sustaining the private sector
- Create more opportunities for Emiratis to learn new skills, gain experience, and be recognized globally.
- Ensure that there is a balanced workforce in the private sector and that no industry is taken over by a particular nationality of expatriates completely.
- Finally, and most importantly, to ensure that the Emirati youth can utilize their full potential to grow, feel acknowledged, and foster social sustainability.
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Why is Emiratisation a Priority for the UAE government?
With expatriates flowing in from different parts of the world, setting up their businesses in UAE and making it a commercial hub resulted in the creation of many jobs. However, most jobs were filled out by more expatriates instead of the Emirati population.
The general notion amongst the expatriates was that the local population was relatively less resourceful and unmotivated, which resulted in the Emiratis, especially the youth, starting to be increasingly unemployed. Specific industries were becoming saturated with a particular ethnicity, for example, Europeans, South Asians, etc. This motivated the UAE government to initiate Emiratisation, making it essential for private companies to employ Emiratis.
Emiratisation became an utmost priority for the UAE government to ensure that the local population is also involved in impactful work, businesses, and the private sector. The idea was to ensure that Emiratis acquire the talent and skills to navigate their career challenges successfully and are recognized internationally for their professional achievements. The government felt an urgent need to ensure that the private sector is not completely dominated by expatriates, which could isolate the Emiratis from businesses within their own country. Furthermore, it was essential to ensure that Emiratis contribute to the national income, decreasing the reliance on expatriates for a prosperous private sector.
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Challenges in the UAE workforce
Emiratisation has been revolutionary for the private sector in the UAE. The government-led initiative has not only challenged the private sector but also Emirati nationals in many ways. Emiratisation's main objective was always to ensure the inclusion and empowerment of the UAE nationals, for which companies began to focus more on rapidly hiring nationals. For many, it was a first-ever experience.
Some of the challenges faced by the private sector include;
UAE is a relatively small country where only 12% of its 11 million population is Emirati. It was often a struggle for companies to find the right Emirati talent with the required skills to fill a role.
Lack of motivation
Private organizations may struggle with hiring and managing Emiratis because there may be a lack of motivation to perform better, as the locals are aware of the Emiratisation policies implemented by the government.
Lack of experience
When a private organization can find the right person for a job, they may not have enough experience; hence, training them can be costly and time-consuming.
Some Emiratis struggle with the English language, and when working with people from different countries, a language barrier could hinder smooth communication and collaboration.
Similarly, Emiratis, too, have struggled with emiratisation. Sure, it means great things like better opportunities and inclusion, but it also comes with its fair share of challenges, such as;
Emiratis found themselves competing and working with international talent. Some expatriates not only bring with them the skills and experience from the local UAE industry but also the knowledge and experience from their cultures and backgrounds. It can be challenging for the locals to compete with that, and to solve for it, there is a need to upskill.
Some Emiratis struggle with the English language for professional correspondence and will need to learn the language better for ease of communication with people from different parts of the world.
There may be a cultural saturation in a particular industry as people prefer working with people from similar backgrounds as themselves. An Emirati may struggle with adjusting to a working environment where a particular ethnicity or culture is dominant. It could also lead them to feel isolated.
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Challenges in the Private Sector in Hiring Emirati Employees
Employing Emiratis in the private sector has its challenges, especially when most Emiratis have access to public jobs that offer a better compensation package as well as retirement incentives that private jobs can not match. According to a report by Arabian Business, Emiratis in the private sector are more likely to quit their jobs or not agree to the employment terms due to lower salaries and cultural friction between the local population and expatriates.
However, the Emiratisation law by the UAE government did pressure private entities to employ locals. If a private company was lucky enough to find the ideal candidate for a role and hire them, Emirati employee retention was another big challenge. Companies in the private sector are always on the lookout for the Emirati talent their competitors have hired so they can reach out to them with a better offer. As a result, Emiratis are hopping and jumping from one opportunity to another, making it very difficult for private companies to retain them. Tools that leverage the use of AI like Iris, match talent perfectly with a role. This also plays a major role in giving the Emirati talent opportunities that are tailor made for their profile.
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Gender Diversity Challenges in Emiratisation
The region is striving to close gender gaps within the public and private sectors. The government is optimistic in its efforts to ensure that companies prioritize gender diversity as a workplace cultural agenda. Companies within the region are becoming more focused on empowering their female workforce, fostering a professional environment that facilitates gender equity.
However, one may argue that despite these efforts, the culture within the region is still archaic in many ways, and there is a long road to attaining gender diversity in the workplace. For instance, a report by Bian and Company states that within the Gulf Cooperation Council (GCC), only 7% of the board seats are occupied by women, in comparison to the 20% female occupancy globally. However, with the advent of Emiratisation, the UAE government has pioneered female inclusion and gender diversity and has set a high precedent for other countries within the region.
According to a report by the World Bank, almost 53% of Emirati women are employed in professional roles, which is even higher than the global average, which stands at approximately 48%, approximately. In 2012, the UAE government launched the Woman on Board initiative that required all private and public companies to have at least one female member on the board. This not only meant more opportunities for career advancement for the women in the region but also challenged the patriarchal status quo within the private sector and celebrated women in a position of influence. Similarly, the government launched the Gender Balance Council, which aims to build an extensive solution for gender gaps and maximize female influence in corporate leadership by 30%.
The challenges faced by the women in the region
Similarly, women in the region who are striving to grow professionally argue that gender biases remain prevalent in the area, hindering their progress, learning, and career advancement. When aiming to achieve gender diversity, the government must take adequate measures to ensure training and mentoring for female employees. Moreover, promoting healthy work-life balance would also enable women to manage multiple roles effectively.
Economic Challenges in Emiratisation
There are various economic challenges of Emiratisation, especially in the private sector. It is the solution the government deemed possible to ensure the inclusion and advancement of Emiratis. However, not all businesses can sustain it without facing economic implications. For example, Most emiratis want to be employed in senior/leadership roles and do not have the experience and skills to fulfill the responsibilities that come with them.
Hiring an Emirati in a leadership role would also mean offering a higher salary, contrary to what you would offer an expatriate. Similarly, the cost of training and upskilling an Emirati candidate would bear a monetary implication on the business.
Furthermore, as discussed previously, a solid Emirati candidate will be hunted down by competitors who may be able to make a more lucrative offer. It may become financially exhausting for a small to medium-sized private company to compete with the monetary rewards offered by others. If a private company is forced to bear the expense of hiring an Emirati employee, they also need to ensure that the return on investing in upskilling and training that individual is achieved effectively. It may hinder business growth as a large chunk of the HR budget is spent on upholding the regulations imposed by Emiratisation.
Emiratisation, despite all of its economic, social, and gender diversity challenges, is the only way forward to empower Emiratis. In the year 2023, UAE has witnessed an 11% increase in the number of Emiratis joining the private sector. The government has strategically mapped out the Emiratisatiion initiative to foster a society that empowers expatriates but also strengthens the local population in their own country. It is essential for the private sector to navigate the various challenges associated with Emiratisation and enable Emiratis to become more resourceful and have a more significant impact on the country’s economy and social development.
One may also see it as a way of giving back to the country that serves as a global village to millions of people from around the world, is a hub that hosts countless thriving businesses and feels like home. Emiratisation is a futuristic approach to creating a balance between enabled expatriates and empowered Emiratis.