Dubai’s economic pull creates ‘employer’s market’ as talent floods to city

The result is “a perfect storm” for employers, who are seeing a surge in applications from both Western and Asian markets, according to Justin McGuire, a Dubai-based recruitment expert with 15 years of experience in the market.

The shift is most pronounced in sectors where regional experience isn’t critical. Communications and advertising roles that were significant revenue generators for recruiters a decade ago now attract surplus candidates, driving down compensation packages.

“We haven’t had to work on an advertising Client Services role for like two years,” said McGuire. “That used to be one of my big money makers.”

Singapore’s minimum salary threshold of approximately AED 60,000 ($16,300) per month for foreign workers has redirected talent flows toward Dubai. Hong Kong’s diminishing appeal as a financial hub has further accelerated the trend.

According to McGuire, the market is splitting into three distinct tiers. These include technical specialists with regional experience who are still commanding premium salaries, generic roles that face downward pressure due to international competition, and local talent that remains highly compensated due to Emiratisation quotas.

Remote work has also altered employment demand, with several employers opting to recruit talent in other countries, with many increasingly hiring in Egypt, Jordan, the Philippines, and India for Dubai-focused roles. According to McGuire, this pattern seems to be mirroring what he observed in Singapore between 2018 and 2021.

“I’ve hired five or six people this year in Sri Lanka and the Philippines to service Dubai,” McGuire said. The trend helps businesses cope with the UAE’s rising living costs while maintaining service levels.

Corporate migration

Despite salary pressures, Dubai continues to attract major corporations. Hedge funds, international communications firms, and FMCG companies are establishing regional hubs, though hiring remains selective and focused on senior positions.

The influx peaked in September 2023, with recruitment firms reporting a “windfall of applications” from international candidates.

The trend shows no signs of slowing into 2025, with Robert Half’s latest UAE salary guide revealing that 63 per cent of business leaders expect their overall headcount to increase in the next 12 months. Half of the surveyed companies cite growth as the primary driver for hiring.

Throughout 2023, the Dubai Multi Commodities Centre (DMCC) attracted over 2,600 new companies and the Dubai Chamber of Commerce saw 30,146 new companies join in the first half of the year.

The UAE, including Dubai, has been ranked first globally in attracting skilled workers in 2024. However, this surplus of talent has shifted market dynamics significantly in employers’ favour. According to Robert Half’s research, 75 per cent of employees report increased difficulty in negotiating pay rises compared to a year ago, while 52 per cent believe they could be easily replaced by their employer.

The broader economic picture remains mixed. While real estate prices continue to surge, recruitment firms aren’t reporting record years, and retail sector activity has slowed considerably.

“I don’t think any recruitment company has had a record year this year,” McGuire said. “Things are okay, but are they great? I don’t think they are.”

This assessment aligns with Robert Half’s findings that employers are increasingly cautious about hiring decisions. A third of business leaders reported waiting for international election outcomes before making hiring decisions.

Despite the influx of talent, finding the right skills remains a challenge. The report indicates that 47 per cent of business leaders struggle to find candidates with the right skills, even though workers are more readily available. Notably, 19 per cent report particular difficulty in finding candidates with previous UAE experience.

The salary dynamics highlight Dubai’s evolution from a high-paying expat hub to a more competitive global business centre. For job seekers, the shift suggests a need to recalibrate expectations in what has become an employer’s market.

Contrasting market signals

However, Mercer’s latest Total Remuneration Survey, published in November, presented a more optimistic outlook for 2025. Based on data from over 700 UAE companies, the consultancy projects a 4 per cent salary increase across industries, with consumer goods companies forecasting the highest rise at 4.5 per cent.

“It is very encouraging to see a large segment of UAE employers planning to increase base salaries in 2025, reflecting a resilient and optimistic economic outlook,” said Andrew El Zein, Mercer’s UAE Career Products Leader.

The contrasting market analyses highlight the complex dynamics at play. While Robert Half’s data points to an employer’s market with downward pressure on salaries, Mercer’s research suggests that companies are preparing to invest in retention through compensation increases. The consumer goods, life sciences, and technology sectors are leading this trend, with projected increases of 4.5, 4.2, and 4.1 per cent respectively.

The divergence may be explained by the growing impact of artificial intelligence and automation on workforce demands. According to Mercer, the UAE has the highest AI adoption rates in the Middle East, with 74 per cent of people using AI weekly. This technological shift is creating upward pressure on salaries for skilled positions while potentially contributing to the oversupply in more generic roles that McGuire identified.

The trend could affect Dubai’s ability to attract top talent long-term, particularly as competing markets like Saudi Arabia increase efforts to lure skilled professionals with premium packages. However, the market dynamics might shift dramatically in 2025. Robert Half’s analysis suggests that with 65 per cent of employees ready for a new role, the market could become more fluid once global economic conditions stabilise.

Companies are likely to accelerate offshoring strategies, potentially creating a two-tier employment market: premium compensation for strategic roles requiring physical presence, and lower salaries for positions that can be performed remotely, McGuire believes. This aligns with his current hiring practices in Sri Lanka and the Philippines, a trend that helps businesses navigate the UAE’s rising living costs while maintaining service levels.