This post was originally published by Karla Dorsch, Founder and Managing Partner Evrima / AltoPartners Abu Dhabi, on LinkedIn. To view the original post, click here.

Across the MENA region, three forces are reshaping how we lead people and organisations: tightening labour markets, rising expectations, and fast-moving HR regulations. These aren’t challenges for any one company but realities for all.

Let’s start with regulation. In the UAE, Emiratisation now reaches even smaller employers, with quotas applying to firms of just twenty staff in some sectors. In Saudi Arabia, Saudization rules continue to tighten, especially in tourism and healthcare. Oman has introduced shorter working weeks and expanded leave entitlements. Qatar enforces a statutory minimum wage with mandatory allowances. Egypt has raised its private-sector minimum wage to seven thousand pounds this year. The message is that the regulatory floor across MENA is rising, and rising fast.

Next, compensation. Inflation, currency shifts, and fierce competition for scarce skills are pushing wages upward. But broad salary increases are not sustainable. Many organisations are finding a smarter balance: linking pay reviews to inflation data, separating base salary from temporary market premiums, and investing in benefits that matter most to employees, healthcare, education, mobility support, and future savings.

At the same time, localisation is transforming the talent equation. Compliance with quotas in the UAE and Saudi Arabia is mandatory. The companies getting ahead are those with role-by-role localisation roadmaps, graduate intakes, and internal academies that build national talent pipelines. Leaving localisation to the last minute only drives up costs and is disruptive.

Recruitment and retention are also shifting. On the recruitment side, multi-track sourcing, from university partnerships, to returning expats, to contract-to-permanent models, helps reduce both the time to hire and wage inflation. On the retention side, many organisations are learning that small moves can be as powerful as big pay rises: lateral career opportunities, project-based bonuses, and regular stay interviews with employees at risk of leaving.

And then there is compliance. Across the region, regulators are becoming more active and more digital. To stay ahead, organisations are embedding compliance into daily operations.

So what does this mean? Three things.

• First, sharing intelligence on regulations, compensation trends, and localisation practices rather than reinvent the wheel.

• Second, investing in national talent, because today’s graduates are tomorrow’s shared workforce.

• And third, set a higher bar for both compliance and employee experience, so that the region is not just competitive, but also a place where talent wants to stay and grow.

The pressures of labour shortages, rising pay, and shifting rules will not ease soon but addressing them will ensure continued success.