Labour Market Structure
The UAE’s labour market is characterised by a distinctive demographic composition in which expatriate workers constitute approximately 88% of the total workforce. This structure, a product of rapid economic development outpacing domestic population growth, creates both competitive advantages and policy challenges. The total labour force exceeded 7.5 million in 2024, with participation rates among the highest globally when accounting for the working-age expatriate population.
The government’s dual mandate of expanding Emirati private-sector employment while maintaining the skilled migration flows essential to economic growth defines the central tension of labour policy.
Workforce Composition by Nationality and Sector
| Sector | Emirati Share (%) | Expat Share (%) | Total Employment (thousands) |
|---|---|---|---|
| Government & Public Administration | 68.4 | 31.6 | 482 |
| Financial Services | 12.8 | 87.2 | 214 |
| Oil & Gas | 31.2 | 68.8 | 87 |
| Technology | 4.6 | 95.4 | 198 |
| Construction | 0.8 | 99.2 | 1,640 |
| Retail & Wholesale Trade | 2.1 | 97.9 | 1,120 |
| Hospitality & Tourism | 1.4 | 98.6 | 680 |
| Manufacturing | 1.9 | 98.1 | 540 |
| Education | 14.7 | 85.3 | 312 |
| Healthcare | 6.3 | 93.7 | 276 |
Emiratisation Policy Framework
The Nafis programme, launched in 2021 and subsequently expanded, establishes mandatory Emiratisation targets for private-sector firms with 50 or more employees. The policy requires a 2% annual increase in Emirati headcount, with non-compliance attracting financial penalties.
| Metric | 2022 | 2023 | 2024 | 2025 Target |
|---|---|---|---|---|
| Emiratis in private sector (thousands) | 62.4 | 78.1 | 95.3 | 110.0 |
| Companies meeting Nafis targets (%) | 41.2 | 58.7 | 71.4 | 80.0 |
| Average Emirati private-sector salary (AED/month) | 16,800 | 17,400 | 18,200 | – |
| Nafis salary subsidies disbursed (AED mn) | 1,240 | 1,680 | 2,140 | – |
| Emirati private-sector retention rate (%) | 72.1 | 76.8 | 79.4 | 85.0 |
The programme has delivered measurable results. Private-sector Emirati employment grew by approximately 52% between 2022 and 2024, driven by a combination of regulatory mandates, salary subsidies, and training support. However, retention rates remain a challenge, with some Emiratis transitioning back to public-sector roles within 18-24 months of initial private-sector placement.
Productivity Analysis
Labour productivity, measured as GDP per worker, varies significantly across sectors. The technology and financial services sectors demonstrate the highest productivity levels, while construction and hospitality lag due to their labour-intensive operational models.
| Sector | GDP per Worker (AED thousands, 2024) | YoY Change (%) |
|---|---|---|
| Oil & Gas | 1,840 | -2.1 |
| Financial Services | 612 | 6.4 |
| Technology & Digital | 587 | 11.2 |
| Transport & Logistics | 324 | 3.8 |
| Manufacturing | 278 | 5.1 |
| Real Estate | 264 | 2.7 |
| Retail & Wholesale | 187 | 1.9 |
| Hospitality | 142 | 4.3 |
| Construction | 118 | 0.8 |
Aggregate labour productivity growth has averaged 2.8% annually over the 2022-2024 period, driven primarily by sectoral reallocation toward higher-value activities and technology adoption within traditional sectors.
Labour Mobility and Visa Reforms
Recent visa reforms, including the Golden Visa programme, green visa, and freelancer visa categories, have enhanced the UAE’s attractiveness to high-skilled workers. The Golden Visa programme, which grants 10-year residency to investors, entrepreneurs, scientists, and exceptional talents, had issued over 200,000 visas by mid-2025. These reforms reduce workforce turnover costs and support knowledge retention within the economy.
Assessment
The UAE labour market is undergoing a managed transformation. Emiratisation is producing tangible gains in national employment, but the economy’s growth model remains fundamentally dependent on expatriate talent. The policy challenge is calibrating nationalisation mandates to avoid deterring the foreign investment and skilled migration that drive non-oil GDP expansion. The current approach, combining targeted mandates with generous subsidies and an increasingly flexible visa architecture, appears to be striking a workable balance.