Demand for short-term and temporary workers has risen in the UAE after the government asked companies to shift from unlimited to limited contracts.

The recruitment and human resources consultants say that freelancers demand has also grown due to limited contract introduction as hiring freelancers reduces costs for the companies.

The Ministry of Human Resources and Emiratisation (MoHRE) asked private sector companies to rectify unlimited-term employment contracts of their employees to fixed-term ones. The ministry moved the deadline to comply with the law from February 2023 to January 2024 to provide enough time for companies to change their contracts.

“The decision stems from our belief in enhancing flexibility, competitiveness and ease of business for private sector companies and safeguarding all parties’ rights,” the ministry said earlier.

The UAE has amended other laws as well to regulate the local labour market to make it more competitive, allowing residents to take up part-time work in addition to their main jobs and also allowing teenagers above 15 to opt for part-time jobs or internships in private companies after obtaining a permit from MoHRE.

Joseph Nwudu, CEO, JustPro Jobs, said many companies these days are looking for freelancers and contract workers as companies are moving to limited contracts.

“A lot of employers are literally going for contract workers because it saves them money, and time and the workers are more efficient, too. Once that person has reached his capacity in terms of delivering the project, firms bring on board another freelancer or temporary worker. This trend is growing since the Covid-19 pandemic. Hence, permanent employment is reducing and firms are using freelancers a whole lot more than before,” he said.

Nwudu further added that the firms are mainly hiring temporary workers for three and six months and then they move on to the next short-term and freelancer workers.

He said a freelance visa is a very smart move and a game changer for the employees because people had to leave the country after losing their job earlier but this newly-introduced visa allows professionals to create their own job.”

“Cost of hiring workers such as visas and insurance is humungous before starting the business. But when a firm hires a freelancer or temporary worker, it doesn’t have these extra costs. Hiring freelancers is economical and both parties achieve their objectives,” said Nwudu.

Aaron Portero, managing director of Connect Group, said limited-term contracts are beneficial and highly sought-after by companies working on special projects with a limited timeframe as they engage employees for a specific duration.

“Both contracts are advantageous in their own way and aim to protect the employee as well as the employer in a balanced way which is of utmost importance to advance the labour market’s growth and stability.

“Given that the UAE is already an attractive market for expats, owing to its economic stability and tax-free environment, we believe that the flexibility allowed by the MoHRE, will help create further opportunities that will only be an added advantage for expats relocating to the UAE from across the world,” said Portero.

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