Primarily driven by the growth of non-oil sectors such as hospitality, construction, education, and tourism, and foreign investments attracted by the government initiatives to make the UAE more suitable for business. Government efforts to diversify the economy and provide a favorable environment for business have instigated a spur in new business establishments.
The UAE HR Outsourcing Services Market size is valued at around USD 500 million in 2024 and is anticipated to grow at a CAGR of about 6.2% during the forecast period of 2024-30, cites MarkNtel Advisors in the recent research report. Primarily driven by the growth of non-oil sectors such as hospitality, construction, education, and tourism, and foreign investments attracted by the government initiatives to make the UAE more suitable for business. Government efforts to diversify the economy and provide a favorable environment for business have instigated a spur in new business establishments.
With more MNCs setting up shop in the UAE demand for HR outsourcing services increased owing to the many benefits it offers. These benefits include a reduction in overhead costs by eliminating the need for an in-house HR department, and ease of hiring new workforce. Moreover, outsourcing HR services eases the monitoring of the regulatory framework and its compliance as the HR service providers are experienced in compliance management and generally have a team of experts monitoring it.
Additionally, the use of digital media platforms such as LinkedIn and Glassdoor to hire new employees is growing, giving rise to the need for HR Services Outsourcing to professional HR management firms, that can screen and identify the most suitable candidates. Leading HR service providers have integrated technology into their processes to make them more streamlined making HR management more efficient. They can use AI and Machine learning to automate various processes and conduct performance evaluations and make data-driven decisions, that are more precise using data analytics, further states the research report, “UAE HR Outsourcing Services Market Analysis, 2024.”
Segmentation Analysis
Payroll Services Commands the Highest Demand in the Market
Based on the services segment, the market is further bifurcated into, Payroll, Benefits Administration, Recruitment Process, Learning Services, Multi-Process Human Resource, and others. Out of these, Payroll management holds the largest share in the market as the need for timely payment of compensations emerges. With various industries being on a growth spur, owing to the diversification effort of the UAE government, demand for a motivated workforce is rising, well-timed payrolls are crucial for the workforce to be motivated and keep working diligently. Payroll management services provider performs these tasks with precision while decreasing the administrative burdens of the organization. Moreover, letting the expert HR service providers manage the payrolls makes regulatory compliance easier as they are well-read in labor laws and regulations.
Hospitality Sector Fueling the Growth of the Market
The UAE has taken many initiatives to increase the footfall of tourists in the country to generate another revenue stream. These initiatives include the construction of many luxurious hotels and resorts and exotic tourist destinations. This gave a significant boost to the hospitality sector, a sub-segment of the non-government segment based on the end user. Consequently, the demand for personnel for many roles such as the waiting staff, front desk representative, managers, chefs, and housekeeping among others increased. This created a demand for recruitment services to be outsourced to HR service providers. It is easier for HR service providers to find a suitable candidate given they have large pools of applicant data they can analyze to find suitable individuals required for a certain role.
Competitive Landscape
With strategic initiatives such as mergers, collaborations, and acquisitions, the leading market companies, including Sovereign Group, JAMS HR Solutions, Intelligent Business Technologies LLC (IBT), HLB HAMT, Nathan & Nathan, AMS International FZ LLC., Transguard Group, Dulsco, TASC Outsourcing, Ultimate HR Solutions, Sundus Recruitment Services LLC, Al Mansoor Enterprises LLC, Axxon HR Solutions, World Star Manpower Solutions, BCC Manpower Services, Naithils General Contracting LLC, Marmoom Manpower Solutions, Abu Dhabi Manpower Supply (ADMS), Gulf Oasis Manpower Supply LLC, Spectra Force, and others are looking forward to strengthening their market positions.
Source: fastmarkets
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