Understanding Emiratization: The Future of the UAE Workforce

Navigating Emiratization: Transforming the Workforce Landscape in the UAE

In the vibrant economic landscape of the United Arab Emirates, a transformative initiative is taking shape: Emiratization. With a strong commitment to integrating local Emirati talent into public and private sectors, the UAE government is reshaping workforce dynamics nationwide.

Read the article below to discover key information about Emiratization in 2024 and whether your company is required to comply with the program’s guidelines.

What is Emiratization?

Emiratisation is an initiative by the UAE government to increase Emirati employment in the private sector. Traditionally, public sector jobs have been more desirable, but the focus is now on encouraging Emiratis to build skills across various industries.

Compliance Rules and Fines

Starting in 2024, companies with 20 to 49 employees must hire at least one UAE national, and by 2025, at least two. This requirement previously applied only to larger firms. Companies that fail to meet Emiratisation targets will face significant fines. Those missing the July 7 deadline could incur penalties of up to AED 500,000 and AED 42,000 for each unfilled Emirati position. For businesses with 20 to 49 employees, the fines are AED 96,000 for not hiring at least one Emirati in 2024, increasing to AED 192000 if two are not hired by 2025. Misrepresenting Emiratisation figures may lead to even higher penalties.

This requirement applies to companies operating in the following 14 sectors:

1. Information and communications
2. Financial and insurance activities
3. Real estate activities
4. Professional, scientific and technical activities
5. Administrative and support services
6. Education
7. Healthcare and social work activities
8. Arts and Entertainment
9. Mining and quarrying industry
10. Manufacturing
11. Construction
12. Wholesale and retail trade
13. Transportation and warehousing
14. Hospitality services.

The Importance of Emiratization

1. Economic Diversification: Emiratisation ensures local talent leads the UAE’s shift towards technology, tourism, and renewable energy.
2. Social Stability: Creating job opportunities for Emiratis promotes social cohesion and reduces reliance on foreign labour.
3. Skill Development: It encourages educational institutions to align programs with labour market needs, equipping Emiratis with relevant skills.
4. Cultural Preservation: Employing Emiratis helps maintain local culture and values, fostering a work environment that reflects the nation’s heritage.

Key Initiatives Supporting Emiratization

1. National Development Programs: Various government initiatives, such as the Emirati Talent Competitiveness Council (ETCC), focus on creating programs to attract and retain Emirati talent in high-demand sectors.
2. Private Sector Incentives: The government provides incentives for private companies that meet Emiratization targets, such as reduced fees or access to funding.
3. Educational Reforms: Collaborations between educational institutions and industries ensure Emirati students receive training and internships relevant to their future careers.
4. Mentorship Programs: Initiatives that connect young Emiratis with experienced professionals in their fields foster a culture of mentorship, guiding them through their career paths.

Challenges and Solutions

Despite the progress, Emiratization faces several challenges:

• Cultural Barriers: There can be a reluctance among Emiratis to work in certain sectors perceived as less prestigious. Raising awareness about the value of diverse job roles is essential.
• Skill Gaps: While there is a push for Emirati employment, some sectors struggle to find candidates with the necessary qualifications. Continuous investment in education and vocational training can bridge this gap.
• Private Sector Resistance: Some companies may hesitate to hire Emiratis due to misconceptions about productivity and performance. Transparent success stories and statistics showcasing the benefits of a diverse workforce can help change these perceptions.

The Way Forward

For Emiratization to succeed, collaboration among government entities, educational institutions, and the private sector is crucial. By fostering a supportive ecosystem, the UAE can empower its citizens to take their place as leaders in the nation’s economic future.

Please refer to the Tawteen report

Federal Pension Scheme

Mandatory Registration for Emiratis

All public and private entities in the UAE must register their Emirati employees with the General Pension and Social Security Authority (GPSSA) from their first month of employment. Timely contributions provide pension benefits, end-of-service gratuity, and compensation for work-related issues. This registration is required under Federal Law No. 7 of 1999.

Scope of the Pension Law

The pension law applies to federal and local government entities (except in Abu Dhabi and Sharjah), public companies, and private sector employers in all emirates except Abu Dhabi.

Conditions for Registration

To be eligible for pension contributions, employees must:

• Be UAE nationals
• Be between 18 and 60 years old
• Be medically fit, as verified by a GPSSA-approved medical report

Pension Eligibility

Emiratis are entitled to a pension upon reaching 60 and completing 15 years of insured service.

Early Retirement Pension

Emiratis can qualify for early retirement if:

• Men reach 55 years and complete 20 years of service
• Women reach 50 years and complete 20 years of service

Nafis: Enhancing Emirati Competitiveness in the Private Sector

Nafis is a federal program designed to enhance the competitiveness of Emiratis and support their success in various roles within the private sector. It offers a range of financial and non-financial initiatives, along with training and development programs to promote Emiratisation. For more information about Nafis and the benefits it provides to both Emiratis and private-sector companies, please visit nafis.gov.ae.

Conclusion

In conclusion, Emiratisation is a crucial initiative aimed at enhancing the participation of UAE nationals in the workforce, fostering economic growth, and promoting social stability. By understanding the regulations and requirements surrounding this initiative, companies can contribute to the UAE’s vision for a sustainable future. For more details on Emiratisation and how it can impact your business, visit  Arabian Business Centre. Our team is ready to provide expert guidance and support.