Analysis: Cure or Cause

Is Omanisation working for either employers or employees in Oman?

Oman is trying to solve a growing unemployment problem through Omanisation policies.
Oman is trying to solve a growing unemployment problem through Omanisation policies.

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Affirmative action is a topic that always tends to stir people’s emotions, much in the same way as a talk on tax.

In the GCC, labour polices such as Omanisation, Saudisation and Emiratisation are basically affirmative action by another name – and they will be familiar to all private sector firms that are required to implement certain quotas depending on their categorisation. But there is still a debate raging about how effective they have been thus far.

The basic premise of these policies that the indigenous population needs greater representation in the private sector is not one that many people would argue is wrong or does not need addressing.

Oman has been one of the GCC countries grappling with how to get its citizens working in non-governmental organisations ever since it introduced Omanisation back in 1992.

Alex Brown, Hill International’s business development manager in Oman, told delegates at the CW Leaders in Construction Oman summit in Muscat that there are around 200,000-300,000 nationals claiming unemployment benefit.

“Looking at the broader economic problem, I saw an article, I think it was a statement from the Ministry of Manpower, that there were 40,000 or so white collar jobs, middle management executive jobs that could be Omanised over the foreseeable future. And that’s probably true,” said Brown.

“But there are about 200,000-300,000 people claiming unemployment benefit right now and it’s not those qualified people who are finding it hard to get jobs.

“On the contrary, the employers are fighting over them – those people who are graduates and those people who are skilled. The people who are not finding jobs are the ones who probably left school early, or who have never had a job, and we can’t Omanise all those people into middle management.”

From a contractor’s point of view, David Skinner, operations director at Al Turki Enterprises, said that because Omanisation has been sold as purely a figure that must be adhered to, it is simply seen as a “cost of doing business” rather than an opportunity to diversify the workforce.

But he said the industry had to take its fair share of blame for not training Omanis to carry out the tasks required on today’s construction sites.

“Largely, this is because we have a very large pool of expatriate labour primarily from India that can do the job much more easily and with less hassle because you’ve got the culture from the Indian middle management that can communicate up and down,” said Skinner.

“Bringing in Omanis into that situation, you need to bring in Omani management and supervisors as well and in that we’ve basically failed.”

Brown said that in theory it should be cheaper to employ an Omani in their own country rather than to hire a migrant worker.

“You can’t pay Omanis less to make the Omani workforce more competitive with the migrant labour force. You either pay that migrant labour force more to make it more competitive and have a freer labour market where migrant workers can transfer easily between one place and another, at which point they become more expensive.”

He said that Hill International has boosted the number of Omanis working on its airport projects at Muscat and Salalah by 50-60% “because we pay”.

“There’s still a way to go but that means we are more expensive,” he added. “Again, we’re looking at these cost-only contracts and tender processes and sometimes we will lose because we want to pay the rates to get the best people – and that doesn’t help Omanisation.”

It was suggested at the summit by one delegate that to encourage private firms to hire Omanis they should be required to work with that same firm for a set period of time before they are allowed to move on. Brown doesn’t think this is practical or indeed fair.

“If you say to someone you can come and work for us for, say OR1,200 ($3,117) if you stay with us for four years, they’ll go and work for somebody else. Who wants to be tied for four years in a job that they’ve not tried when there is an alternative?

“The Ministry of Manpower gets a hard time here because they are the ones dealing with the consequences of the problem. Adding more rules is not the answer.”

Omani national Khalid Al Mahrooqi, chief operations officer of local contractor Arkan Majan, has taken a unique approach to galvanising his Omani employees - the personal touch.

“I have sent a message to all my Oman colleagues that you have an opportunity in the company if you do well. And I sent another message to those that have performed well, that they are in a succession plan to replace an expat. I also sent another message before I went on holiday to an Omani who is just three levels below me to say that if you keep performing, you can be an acting CEO or general manager,” said Al Mahrooqi.

“I can either see Omanisation as an opportunity, or I have to consider them as a number and pay them for doing nothing.”

He also dismissed the notion that it is difficult to fire underperforming Omanis.

“I’ve heard people say it is difficult to fire Omanis but I was able to fire Omanis and let them go without any problems. There are ways and means to get rid of Omanis but we need to look at them not as the enemy, not as a challenge,” he said.

However, Al Mahrooqi, 40, is scathing of the education system which he said has changed the mindset of a generation of Omanis from one that should value hard work to one that believes it is entitled to employment.

“I came through when the system was about striving to get an opportunity, striving to get into a college. The new generation has unfortunately been taught not to work,” he said. “The problem with the education system is the schools and the universities guaranteeing [pupils] they will pass a stage and go onto the next class.

“You have young people coming to us and they think they have the right to get a salary,” he added. “We need engineers and we can’t find good engineers. There are some senior positions and we can’t fill them. If we ask the Ministry of Manpower to send us an engineer, they send us an IT engineer.”

Al Mahrooqi said that through his role as a board member of the Omani Society of Contractors, he is engaged with various stakeholders in government to try and overhaul the labour and education system.

“They [the government] do have the intelligence and they listen even though they don’t have an immediate answer,” he said.

“From an industry level, we have to do something. We can’t sit back and do nothing. As I say, we have to see Omanisation as an opportunity and not a threat.”

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