UAE Recruitment Challenges: High Wages & Worker Shortage

UAE Labor Market: High Wage Expectations and Skilled Worker Shortage Hinder Recruitment

Recruitment in the United Arab Emirates and the wider Gulf region has never been an easy task, but recent surveys indicate that new challenges have emerged, posing significant obstacles for companies in hiring new employees. According to research conducted by Naukrigulf, the biggest difficulties currently lie in high wage demands and the lack of workers with the right skills.

Impact of Wage Demands and Living Costs

The survey shows that 38 percent of employers in the UAE and other GCC countries cited unrealistic wage demands as the biggest recruitment barrier. Candidates increasingly expect higher salaries due to rising living costs: rents, school tuition fees, transportation costs, and everyday consumer goods prices have all significantly increased in recent years.

As a result, companies are forced to raise their compensation packages to remain attractive to talented workers—especially those with specialized, marketable skills. However, official salary frameworks often do not rise at the same pace, leaving companies with tough decisions: should they raise key position salaries, or continue searching, risking a labor shortage?

Skilled Worker Shortage and Localization Quotas

The second biggest problem is a skilled worker shortage. In certain areas—such as IT, engineering, healthcare, or hospitality—it is almost impossible to find workers with the appropriate experience and knowledge, especially from the local labor market.

The governments of GCC countries—including the UAE—are increasingly emphasizing 'Emiratization' and localization goals, which mandate companies employ a certain percentage of local citizens. This adds further pressure on employers, as it is difficult to find qualified local workers, and they also need to meet quotas, while foreign workers often show more flexibility and quicker integration.

Recruitment Times are Shortened

According to the survey, time has also become a crucial factor in recruitment: 52 percent of surveyed employers wish to fill vacant positions within less than a month. Another 35 percent aim to close recruitment within a maximum of two months. This means companies are trying to make decisions more quickly—which becomes even harder when the sought candidate asks too much or there are not enough qualified alternatives available.

Experts suggest that this speed is driven by competition. Market players want to be the first to snatch up the best candidates, which is why they operate with shortened internal processes, accelerated interview schedules, and pre-prepared offer packages.

Who Are the Most Sought-After Nationalities?

The research also highlighted that the most sought-after nationalities in the region are Arab, Indian, and Filipino workers. This trend is not accidental: these nationalities have been present in the Gulf labor market for decades, and employers claim they excellently combine professional competence, cultural adaptability, and service-oriented attitudes.

Indian and Filipino workers are especially popular in hospitality, customer service, administrative, and technical fields, while employing Arab citizens helps meet localization requirements and can improve connections with the local market.

Stable Market but Selective Wage Increases

The region’s economic outlook remains favorable. The UAE and other GCC countries continue to invest in infrastructural, real estate, tourism, and technological projects. This results in the emergence of new job opportunities and necessitates replenishing losses from existing workforce fluctuation.

According to the survey, the layoff rate is currently just 1 percent, indicating that the market is stable, and mass layoffs are not typical. This further increases workers' bargaining positions, particularly in sectors with a tight labor supply.

While wages are unlikely to rise across the board, significant salary increases are possible in certain highly sought-after positions—such as IT, engineering, and project management. More general, easily replaceable positions are expected to see more moderate salary growth.

Summary

The recruitment environment in the UAE and the broader Gulf region is undergoing significant changes. High wage demands, the shortage of experienced professionals, and localization requirements present complex challenges for employers. Market players must adapt more flexibly: this means quicker decision-making, more precise demand assessment, and more targeted wage policy strategies.

Over the coming months, demand for skilled labor is expected to remain strong, particularly in areas that represent the economic engines of the future—such as technology, tourism, healthcare, and the green industry. Those who can recruit quickly and effectively in this new, dynamic environment can gain significant competitive advantages in the market.

(Source based on the Naukrigulf report)