UAE’s newly announced unemployment scheme will benefit the startup ecosystem by widening the country’s existing talent pool, stakeholders told Arabian Business.
Although many startup employees are still working remotely, blue-collars workers in the ecosystem will have “breathing room” to remain in the UAE while looking for another job, explained Sallyann Della Casa, founder of Gleac.com.
“Most tech startups in the region and globally are still operating on a remote work talent model. Our workforces are sitting everywhere and as such the Unemployment Initiative has little impact on our population. I am also not sure if this law by itself attracts that “remote ” startup workforce to the region or widens our white-collar pool of talent,” said Della Casa.
“I think the true net beneficiary of this law are the most vulnerable levels of the workforce from developing countries already here in more blue-collar roles within startups. Take for example the drivers of Deliveroo or Talabat. They would benefit immensely from this law. It will give them the breathing room to stay in the region to bridge to their next job. It’s a basic humanitarian move and a good for business,” she continued.
Blue-collar workers are not the only ones who will be incentivised to stay in the UAE because of the unemployment insurance programme as seasoned talent within the startup ecosystem will also be more comfortable staying in the country.
“Funding for MENA startups more than doubled on an annual basis in Q1 to about $864million according to a recent report, indicating a buoyant sector. These new businesses must have instant access to talent when opportunity strikes, which means there must be boots on the ground. And so far we have seen a raft of visa initiatives designed to attract people to the UAE in the first place to fill these spots,” said Ramesh Jagannathan is NYU Abu Dhabi Associate Dean of Engineering, and startAD managing director.
“However, another statistic worth noting is that 90 percent of startups fail within ten years. As any seasoned Silicon Valley entrepreneur will say, there is no reward without risk. And they will also note that there is no such thing as failures, only lessons learned.
“Unemployment pay will therefore help ensure that the UAE market is able to not just attract new talent, but also retain the seasoned individuals who have learned valuable lessons, skills, and localised expertise that are put to good use in their next venture. Their knowledge will be key to the next phase of the sector’s development,” continued Jagannathan.
The new unemployment insurance programme will go into effect January 2023 and is applicable to all UAE residents and citizens. It offers residents the option to pay a minimum of AED40 and a maximum of AED100 per year into an insurance scheme.
In the event that UAE workers lose their jobs, they will be eligible to receive 60 percent of their basic salary each month, or up to AED20,000.
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