UAE hiring slows but demand for skilled workers remains strong

Four in ten companies in the UAE still expect to increase headcount in the third quarter, according to a new survey, despite a sharp deterioration in hiring sentiment caused by the Iran conflict.

The data paints a mixed picture of the labour market, with employers becoming more cautious overall but continuing to recruit in sectors such as financial services and information technology.

Trade and logistics show the steepest pullback, with more companies planning job cuts than additions.

ManpowerGroup’s quarterly Employment Outlook Survey of 546 UAE employers put the country’s Net Employment Outlook at 17 percent for the period. This is below the global average of 26 percent and the regional Middle East average of 28 percent.

While 42 percent of UAE employers plan to add headcount, 25 percent anticipate job cuts.

“What we are seeing in the UAE this quarter is a clear shift from rapid expansion to selective workforce planning. Employers are still prepared to invest in critical skills, particularly in AI, operations and customer-facing functions, but they are balancing those priorities against a more complex economic and geopolitical backdrop,” said Bryan Luro, country manager of ManpowerGroup Middle East.

Smaller businesses with up to 50 employees showed a negative outlook, expecting more cuts than hires, but larger companies appear more resilient. Those with thousands of employees showed greater confidence, with roughly a third still planning to expand their workforce.

Nearly the same proportion said they intend to enter new business areas or accelerate technology investment, driving demand for specialist talent.

“Typically this is a great environment for [workforce] acquisitions,” said Ali Haider, a partner at immigration services firm Fragomen. “There’s a lot of talent that’s available in the market as well that you may not have had access to before. You get a lot of bang for your buck that way.”

The rise in hiring among the UAE’s non-oil private sector is at its slowest pace since last October, with companies citing subdued demand, rising costs and increased automation as contributing factors, according to the latest monthly S&P Global UAE Purchasing Managers’ Index.

However, survey respondents remain positive about the long-term outlook for the UAE.

“Businesses still view these current challenges as temporary and expect growth to bounce back quickly,” said David Owen, principal economist at S&P Global Market Intelligence.

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