Emiratisation deadline passes, but retention emerges as the harder challenge for UAE firms

Companies in the UAE are now facing a new question on Emiratisation requirements — beyond hitting the quota, they’re now looking at whether they can retain the Emiratis they hire. The UAE had set a 30 June deadline requiring all private sector companies in the country with 50 or more employees to ensure Emiratis account for at least 9% of their workforce (from 1% previously). With that deadline now in the rearview mirror, it’s becoming clearer that retaining local talent, integrating them meaningfully, and moving beyond compliance to genuine value creation is where the real divide is opening up. That divide is also wider for small and medium-sized enterprises, which are falling behind larger firms.

Companies met the deadline with varying degrees of readiness. “We are seeing a mix of preparedness and last-minute activity. Many larger organizations have been planning for these requirements for months, but there are still a number of companies, particularly within the mid-market segment, that are working to finalise hiring and contract amendments before the deadline,” Pedro Lacerda, senior vice president at TASC Outsourcing, tells EnterpriseAM.

Some procrastinated, leaving hiring until the last minute, which inevitably adds to the constraints of finding the right candidates. “Those that invest in graduate programs, internships, mentorship initiatives, and long-term talent pipelines are generally better positioned to attract and retain skilled professionals,” Lacerda tells us.

The workforce localization scheme known as Nafis has clear timelines and targets, making compliance easier for companies as they set out their annual plans. “You have to be ahead of time; you have to plan your hiring over a year, six months, or three months in advance,” Cooper Fitch CEO Trefor Murphy tells EnterpriseAM.

The now-extended localization mandate addresses the challenge of a large number of companies competing over a much more limited pool of Emiratis seeking employment in the private sector. Some sectors and roles are harder than others — for example, new technologies such as AI require specific training that may not be as developed yet in the UAE.

But if hiring is the visible test, retention is the one that actually separates the leaders from the laggards. “We work with a lot of consulting firms, and they would say they need to hire 100 or 200 nationals every year. I would ask, ‘Out of those 200 graduates you hire every year, how many of those are in place 12 months in?’ Small numbers — 10 or 20 left,” Murphy tells us.

The UAE extended the Nafis Emiratisation program to 2040 and expanded financial support under it for women and children, which Lacerda says “provides businesses with greater certainty and reinforces the UAE’s long-term commitment to workforce participation and skills development.” Since its launch in 2021, the program has been implemented in 2% increments towards a target of 10% by the end of this year. Smaller companies (20 to 49 employees) in fast-growing sectors are also included in the Emiratisation targets, which require them to hire at least one Emirati employee each year from 2024.

By the numbers: About 176k Emiratis are now employed in the private sector, with 112k women participating through the program. Since its launch, the number of Emiratis in the workforce is up almost 400%, we previously reported. The current figures surpass the program’s initial target of employing 75k Emiratis in the private sector.

Signing up has its benefits for Emiratis seeking employment, including a salary support scheme that depends on education level. The government recently raised the monthly minimum wage to AED 6k for private sector employees in January.

And non-compliance is costly: Companies that miss the target face penalties from 1 July of up to AED 120k annually for every Emirati they didn’t hire. A fine for failing to implement the minimum wage hike was to be enforced at the same time, adding to the list of criteria companies had to meet by the end of June.

“Non-compliance can create operational challenges that directly impact a company’s ability to hire, grow, and respond to business demands. Restrictions on work permits and changes in company classification can affect workforce planning and create additional administrative burdens,” Lacerda tells us.

From box-ticking to value creation

The penalties explain why companies comply. They don’t explain why the smart ones are going further — and that gap is becoming the real story of Emiratisation. Fake Emiratisation schemes exist but are not seen as prevalent. Some reported cases were detected by the ministry in the first half of 2025 through field inspections and digital monitoring. Analysts we spoke with played down their prevalence, including cases of keeping an employee on the books who doesn’t actually do the work.

“While there might have been a few cases, the UAE has made it clear that it expects businesses to create real opportunities for Emirati talent, and recent enforcement measures reflect that. After an era of treating talent localization as a box-ticking exercise, the conversation has now shifted from whether companies should embrace Emiratisation to how they can do it in a way that creates lasting value. Businesses that invest in developing Emirati talent are building stronger teams today while positioning themselves for long-term success,” Lacerda tells us.

Murphy makes the same point from the other direction: “The bottom line is having people on your books, employing them and paying them, but not expecting them to do a day’s work is counter-intuitive to what nationalization is supposed to stand for, which is to help level up nationals to expat levels,” he explains. Whistleblowing by other employees or self-reporting by affected staff may deter such attempts at “defrauding the system.”

AI once again fills the gap

The rush to hire Emiratis has also created openings for other sectors, such as an AI-powered recruitment platform called Rabet. The pre-seed startup launched around eight months ago, aiming to fill a perceived gap created by rising demand for Emirati nationals that traditional recruitment methods fail to capture.

The platform vets candidates by sector and matches them with companies with open positions, typically within 48 hours, founders Aymane Najib and Hajar Najib told us. “We’re basically the middleman,” Aymane says, describing a process that scans CVs, then interviews hundreds of candidates to produce ranked results based on their skills. Rabet is also programmed to run interviews in both Arabic and English to cater to a market where some roles require standard Arabic.

Even so, the hardest roles remain hard to fill. “For example, we had a situation where they asked for AI senior Emirati people that have more than 12 years in AI and data plus other stuff. We didn’t find anyone. There was no one. And we told them there was no one and we gave them the other list of the non-Emiratis, and there were a lot,” the founders say.

State policy meets cultural factors

“The government agenda is to reduce that number [workers in the public sector] because it’s a very heavy, not-for-profit payroll. The private sector is expected to do some of the heavy lifting there. The banks have led the charge in that for a long time,” Murphy explains, adding that likely around 80% of nationals work in the public sector, and an even higher proportion in the federal government.

While government policy is clear on expanding local participation in the private sector, cultural factors slow the process. “If you’re going into an organization in your home country to be one, two, three, or four of a couple of hundred people, it is genuinely very difficult to assimilate into a culture that’s not your culture,” Murphy says. Proper onboarding and specific programs for nationals are needed, but he notes that “whilst they [Emiratis] understand why they’re there, they also don’t want to be given special treatment.”

These factors feed straight back into the retention problem — and, ironically, better employers pay the highest price for solving it. As companies improve onboarding and training, a pattern emerges of higher turnover among graduates who switch employers within the year. “When organizations have got better L&D, better programs, and better infrastructure to hire nationals, they’re being targeted by other private sector companies to take those people,” Murphy says.

The deadline has come and gone, and localization mandates are here to stay, with Saudi Arabia and the UAE leading the push as part of their economic diversification strategies. But the deadline was only ever the floor. The companies that pull ahead will be the ones that treat Emiratisation not as a quota to clear but, in Lacerda’s words, as a way “to create lasting value.”