UAE Companies Continue Hiring, But With Caution Amid Corporate Tax Pressures

Business & Investments

UAE Companies Continue Hiring, But With Caution Amid Corporate Tax Pressures

As the UAE enters the second half of the year, businesses remain active in hiring, but with a more cautious and cost-conscious approach, primarily influenced by the upcoming corporate tax payment deadlines and broader global economic uncertainties.

With the first wave of corporate tax filings due in September 2025 for companies operating on a January–December fiscal year, many firms are tightening budgets and closely evaluating hiring needs. This trend reflects a strategic shift across sectors as companies strive to balance growth with compliance and cost-efficiency.

Hiring Slows, But Demand Persists

While no significant decline in overall demand for talent has been reported, recruiters and HR leaders confirm a temporary hiring freeze occurred earlier in the year amid geopolitical tensions—such as U.S. tariffs and Middle East instability. Now, hiring is returning, albeit more selectively.

“There haven’t been any major changes in demand for talent—except for the heightened caution in hiring during the U.S. tariff and Iran issues,” said Hasan Babt, Managing Director at consultancy firm Tuscan.

Sectors like transport and logistics are expected to lead the next wave of hiring in the UAE, according to a recent ManPower Group report. However, sectors such as heavy manufacturing, hospitality, and general administration are experiencing little to no salary growth, reflecting a saturated job market and stable talent supply.

Talent War in Tech, AI, and Strategic Sectors

Despite the general caution, UAE and Saudi Arabia are aggressively pursuing top-tier talent in high-demand fields—especially in AI, advanced technology, infrastructure, tourism, and renewable energy.

“This is fueling a war for talent,” Babt noted, adding that companies are offering premium incentives like sign-on bonuses, guaranteed retention packages, and phantom stock plans to attract and retain high-performing individuals.

In some cases, businesses are even buying out unvested equity from candidates’ previous employers—an uncommon but increasingly necessary tactic to secure elite tech professionals and C-suite talent.

Automation and Cost Management Reshape Workforce Strategy

Across many industries, the rise of automation and AI is prompting companies to restructure or reduce back-office roles, with many HR leaders acknowledging that job reductions in these areas are no longer a distant prospect but an imminent reality.

At the same time, finance and HR managers are already forecasting how corporate tax liabilities will impact hiring in Q4 2025 and beyond, as businesses assess long-term sustainability and plan for 2026 hiring budgets.