UAE Steps Up Enforcement of Preferential Hiring for Nationals

 

By Katie Nadworny September 17, 2019
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​The United Arab Emirates (UAE) Ministry of Human Resources and Emiratisation (MOHRE) has begun implementing a more stringent application of its existing UAE Labor Law market testing process, with the goal of prioritizing the hiring of nationals. Now the program has expanded to encompass all companies in the UAE, which means businesses need to adjust their hiring practices.

Sinan Yurtsever came to work for a global consulting company in Dubai, UAE, in 2018, arriving from Istanbul as a highly qualified foreign consultant. He's thriving in the company's international environment. 

"In my company, [the makeup is] 50 percent Indian, Pakistani [and] Bengali, [plus there are] some Emiratis and the rest is mostly Europeans," Yurtsever said. "Compared to other companies, my company is more diverse. In other companies, there are lots of people from the Middle East: Lebanese, Jordanian, Egyptian." He is enjoying his job and his company and finds that his overall quality of life has improved over his time in Istanbul. "My work/life balance is good and the work culture is a little more international, and the main language is English. It's an international environment." 

This kind of international composition of the workforce isn't unusual in a city where Emiratis make up only 15 percent of the population. However, with the nationwide push for preferential hiring of UAE nationals, a consultant like Yurtsever now could be hired only if a qualified Emirati wasn't vying for the position.

Stringent Application of Existing Law

A longstanding UAE labor-law test prioritizes the hiring of UAE nationals, similar to other Arab countries with preferential hiring rules.

However, "This test was not actively enforced by the Ministry of Human Resources and Emiratisation until fairly recently, and so it was common practice to see expatriate employees dominate the private sector," said Anirban Chatterji, director of Middle East Immigration and Employment Leader at PwC in Dubai. Policies, programs and incentives were established over the years to give preference to UAE nationals, but these initiatives alone weren't enough. 

"The 'teeth' attached to enforcing such labor-market testing was not particularly strong," Chatterji said. "Now, however, the MOHRE is more stringently applying the UAE Labor Law market testing process, requiring all companies ... to actively recruit UAE nationals for new skilled roles through its online Tawteen Gate program, thereby building such labor-market testing as an integral feature of the overall employment sponsorship application process."

Tawteen Gate is an online platform designed to incentivize and streamline the prioritization of Emiratis in the private-sector labor force. Emiratis wishing to work in the private sector can register to be listed on Tawteen Gate. They must be between the ages of 18 and 60 and must have a certain number of basic qualifications, including a valid passport and a certificate of good conduct. Employers must tap into the pool of applicants registered with Tawteen Gate before they can reach out to foreign workers.

Expats working in the UAE are typically on defined-work contracts. "If you're an expat, your company is the reason why you are here," Yurtsever said. "Your [resident] ID is linked with the company itself. My company applies for my resident ID." 

The foreign labor force is made up mostly of migrant workers engaged in the construction sector and other blue-collar industries, though many—especially in Dubai and Abu Dhabi—are highly qualified professionals in white-collar positions. Despite the push for labor-market testing, the UAE has a shortage of high-skilled workers, according to Korn Ferry Institute. The UAE is home to less than 2 million Emirati citizens and approximately 8 million expatriates.

But according to the Dubai Statistics Center, though Dubai has one of the lowest unemployment rates in the world at 0.5 percent, the unemployment rate for Emiratis has been steadily increasing. Unemployment rates for foreign workers have remained steady.

Another vetting process from MOHRE requires employers to attend an "Open-Day Appointment" and interview UAE nationals for open positions, Chatterji said. "If a suitable candidate is found, the employer is expected to hire the candidate within five days of the interview." Only after that process has played out and no viable candidate is found can a job offer be extended to a qualified foreign national. "But," Chatterji pointed out, "the company must justify its rejection of the UAE national candidates."

Delays in Getting Work Permits

The expansion of the market testing process to all sectors by MOHRE has begun to lead to delays in acquiring work permits for expat employees. 

"A number of companies, particularly international companies, were unaware of the widened application of this labor-market testing program and consequently did not factor this in as part of their overall recruitment process," Chatterji said. Companies will have to adapt to the more strictly enforced law. "As this labor-market testing now forms an integral and mandatory part of the overall employment sponsorship application process, companies will need to factor such delays into their overall recruitment processes."

[SHRM members-only toolkit: Introduction to the Global Human Resources Discipline]

Larger Trend

Other countries in the Gulf Cooperation Council—including Saudi Arabia, Kuwait and Oman—are moving away from a historical dependency on expat labor in the private sector and refocusing the workforce to be primarily local. Various methods are in use, but the results are the same: Employers are made to look at the local pool of applicants before tapping foreign applicants. 

Chatterji said this is good for the labor market of the UAE overall. "The benefits are, of course, ensuring fair and appropriate UAE national representation across various industry sectors in the private sector and a more balanced, culturally diverse workforce, which ultimately benefits companies in the long term."

Yurtsever said he understands the need for labor-market testing but is unsure about its impact. "I don't know how strong it can be in the UAE," he pointed out, "because the majority of people here [in Dubai] aren't Emirati." 

Chatterji believes that after an adjustment period, the integration of the Tawteen Gate labor-market testing system will become a natural part of the hiring process. "Over time," Chatterji said, "the impact will fade as companies build the requirement to undergo this new labor-market testing program into their internal planning." 

Katie Nadworny is a freelance writer in Istanbul. 

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