Omanization- The Keyword to Oman Job Market in 2019 and Beyond
Omanization is not only a term and an objective adopted by decision makers in the Sultanate of Oman but also a way of life for recruiters. The initiative is almost 30 years old. However, the government has recently further intensified the efforts. In late November 2017, the Ministry of Manpower temporarily banned recruiting expatriates to 78 jobs. The ban was to be effective for six months. In May another ministerial decision was announced on the same matter. The new decision not only extended the ban but also added more jobs to the list. (Read more about this here)
Given our daily engagement with the private sector employers in Oman through our job portal www.jobibex.com we have the following observations:
The Ministry of Manpower is very serious about Omanization
A lot of our clients are finding it difficult to obtain work permit. Even when they apply for expat visa for technical posts they are directed to hire nationals for non-technical. Those with grace period to meet the Omanization ratio cannot appeal for extension. The Ministry of Manpower has activated several restrictions on issue of work visa. The decision is enforced uniformly across all sectors. Furthermore, it applies to companies of all sizes and natures.
Experience as a prerequisite might not hold valid
Previously, the authority was considerate to the justification of lack of experience among nationals when granting work permits. Obviously, this is not the case anymore. Private sector employers have to prove the relationship between manpower experience and performance. We appreciate the fact that this could be a debatable issue. However, in today’s economy a lot of successful enterprises are managed and ran by individuals with little or no experience. Innovation, desire to perform, intuitive, education and above all market forces are all possible alternatives to experience. If Omanization is not going to harm or, even better, going to improve performance and profitability then why not Omanize?!
Employers will hire the best only
The fall in oil prices and the struggle of GCC governments to make ends meet have introduced a new scenario to the private sector. Companies understand that they should grow totally independent from any government support. It makes no sense at all if a company lives by government projects for 50 years and then cannot live without it for one day! Therefore, employers are no longer looking for mediocres. They look for people who have made it elsewhere. Companies in Oman are only willing to go through the struggle of obtaining work permit for you if and only if you have something they cannot find elsewhere.
Certain sectors have no other choice but to Omanize
Omanization started in the banking sector in Oman in early 1990’s. Right now the ratio is above 90% and has really served its purpose. Practically, for any bank in Oman to hire one expat it has to hire 9 Omanis at the same time. Despite the initial reluctance, today Omani staff are assuming even the most sophisticated jobs in the banking sector. Similar experience was replicated in the stock market. Prior to 1997 it was believed that very few nationals could fill the position of stockbroker. This myth was proven wrong within a few months when brokerage companies started to qualify Omani staff to obtain stock brokerage license. The insurance sector is also following the same path as the Capital Market Authority the regulatory body for insurance sector in Oman is working with licensed insurers to absorb Omanis. The required Omanization ratio is expected to reach 70% soon. Other sectors especially the ones requiring special license to operate are also facing the same decision.
Several sectors can and will be Omanized
Retail, tourism and hospitality, all sorts of consultancy services, communication and marketing and many other sectors are all subject to Omanization. Other sectors such as education, healthcare, manufacturing and IT can be Omanized partially. This argument is supported by two facts; a) A lot of jobs in these sectors are not highly technical and b) Many Omanis and already qualified to take over. The regulators are already aware of this and it will not be long until further decisions are issued.
Expats should only target technical jobs
We receive a lot of inquiries from expat jobseekers for admin jobs. Our answer remains the same: unless the position you are applying for cannot be filled by an Omani, please do not bother! Even if you are the perfect candidate the employer still has to comply with regulations. Therefore, if you are an expat targeting secretarial or administrative job it is about time you looked elsewhere. Jobs currently open for expats in Oman are either technical and highly specialized such as doctors and nurses or are hard to be filled by Omanis. Some technical professions such as teaching, accounts and IT are also subject to Omanization. The massive number of Omani graduates in these fields makes it difficult for employers not to absorb nationals.
More incentives will be given to Omani jobseekers
Currently one of the biggest obstacles against hiring Omanis is the pay scale. Government salaries start at RO910 for university graduates. On the other hand, salaries for fresh graduates with some companies start as low as RO450. Pay disparity along with job security and stability pushed jobseekers to turn down private sector jobs. Some would entertain offers from the private sector until they land a government job. Obviously, this act discouraged companies from hiring Omanis. Consequently, it widened the Omanization gap. The only rational solution to absorb more Omanis is to improve pay scale for freshers. Frankly, employers will soon have no choice but to embark on this strategy.
The economy is supporting the initiative
The recession caused by falling oil prices seems to be over. Oil prices have increased more than 3 times since it fell below $30 in 2016. A large segment of local businesses survived that phase. The recovery in Oman’s economy is inevitable. Oil prices are on the rise and businesses have come out of it stronger than before. Naturally, certain sectors are likely to struggle irrespective of the market cycles. For instance, travel and tourism agencies are likely to be phased out. Travelers finding it easier and cheaper to do the booking themselves. Other sectors such as hotel and tourism, private education, public transportation and construction are likely to boom. These sectors might enjoy comfortable margin. Therefore, they might be able to contribute to the Omanization effort.
Employers have to live with it!
Employers have no choice but to meet Omanization ratio as well as their social responsibility obligations. The rules are unlikely to be relaxed given the large number of Omanis joining the workforce after every academic semester. Our observation and analysis to the employment market in Oman suggest that a large number of Omanis can be attracted to the private sector with slight improvements in pay structures. For instance, most companies pay freshers between RO600 to RO700. Omanis are unlikely to be enchanted to accept these salaries as they have to receive a pay raise anywhere between 30-50% to be in part with what their counterparts at the government receive. We believe that in order to narrow the gap and lure more nationals to the private sector the pay scale for fresh graduates should increase by 21% to 25%.
Jobseekers have to earn it
The main cause of disappointment among Omani jobseekers is lack of access to effective career counseling. A number of them are totally unaware of the great opportunities outside oil and gas, telecom or banking sectors. They also need to understand that some struggle is a must in every successful career path. They need to treat the first job offer as a paid training rather than salaried job. Besides, government jobs are limited and very much rationalized. It is unlikely to exceed a few thousands intakes every year. Eventually, jobseekers will have to understand that they need to catch the next train before the next class graduates and further populate the platform!
Nationalization of jobs is a process rather than a decision. It does not happen overnight. The Ministry of Manpower should assist companies to meet the Omanization ratio. The process should include pre-identification of manpower requirements. Educational establishments should then focus on supplying the market with these requirements. The Ministry should also encourage companies to administer knowledge transfer to nationals. They need to focus on expats who are capable of passing knowledge to Omanis. It makes little sense to be unable to nationalize basic jobs for almost half a century!
The number of Omani graduates seeking jobs is rising. The government is willing to take any measure to absorb Omanis in the private sector.