UAE Firms Continue Hiring with Caution Amid Cost Pressures and Tax Commitments

Dubai: Hiring activity in the UAE remains steady, but companies are exercising increased caution as they enter the second half of 2025, with cost-control measures—especially around the newly introduced corporate tax—heavily influencing recruitment decisions.

Similar trends are being observed in Saudi Arabia, where companies are also selective in new hiring. However, for roles demanding advanced tech skills, employers remain willing to offer higher pay packages and additional incentives.

“In general, there haven’t been major shifts in overall talent demand, except for a brief slowdown during geopolitical tensions involving US tariffs and Iran,” said Hasan Babt, Managing Director at HR consultancy Tuscan. “That temporary hiring pause has mostly passed.”

Muted Salary Growth in Key Sectors

Despite steady hiring, salary growth in traditional sectors such as heavy manufacturing, hospitality, and back-office functions remains subdued in both the UAE and Saudi Arabia—limited to a modest 0% to 3% increase in 2025. This is attributed to a stable talent supply and a saturated job market.

HR professionals highlight that competition for available roles remains intense, making higher salary demands increasingly difficult to justify. The growing adoption of AI and automation is also influencing hiring patterns, with many companies forecasting further role reductions in the near future.

Corporate Tax: A New Cost Driver

One of the biggest changes influencing hiring is the introduction of corporate tax in the UAE. Businesses operating on a January–December financial year will begin filing returns from September 2025, forcing companies to reassess expenses—hiring included.

Finance and HR leaders expect that the final quarter of 2025 will serve as a “reality check” for businesses to align hiring plans for 2026 with new financial obligations.

Talent War in Tech and Strategic Sectors

While many companies are cautious, demand for talent in AI, infrastructure, tourism, and renewable energy remains robust. “A war for talent is underway,” said Babt, noting that firms are going the extra mile to secure skilled professionals.

According to Tuscan, the use of sign-on and retention bonuses became increasingly common in 2024, especially for tech executives and high-potential candidates. Some companies even buy out unvested equity from candidates’ previous employers—a practice previously rare in the Gulf.

In the UAE, family-owned conglomerates have introduced phantom stock and profit-sharing plans to retain top talent long-term. In Saudi Arabia, firms operating in Riyadh’s financial district offer premium expat packages, with high base pay and generous housing, schooling, and travel allowances.

Salary Trends: Tech Roles in Focus

Tech roles continue to command top-tier salaries. In 2025:

• AI/Machine Learning Engineers earn Dh33,000–Dh48,000 per month in the UAE (up from Dh28,000–Dh43,000 in 2024). In Saudi Arabia, these roles pay Dh35,000–Dh50,000.
• Cybersecurity Architects now earn Dh34,000–Dh50,000, up from Dh29,000–Dh45,000 in 2024.

“Technology investment remains strong, especially from government-backed entities,” said a UAE-based tech consultant. “Unless key AI-related projects are halted—which isn’t happening currently—demand for tech talent will remain high.”