New Mandate for Companies to Hire Nationals: How This Job Market Shift Impacts Your Business in Oman
Muscat: In response to social media reports, the Ministry of Labour (MoL) has announced new initiatives aimed at striking a balance between business sustainability and job localization. The ministry has introduced incentives for businesses to hire at least one Omani citizen if they have been established for over a year.
These incentives include training programs linked to employment, on-the-job training, and wage support. The decision stems from data revealing significant disparities in Omanization rates across various establishments.
Currently, around 1,000 large companies employ approximately 200,000 Omanis alongside 245,000 expatriates, achieving an Omanization rate of about 44%—averaging two Omanis for every three expatriates per company. In contrast, approximately 19,000 smaller establishments employ only around 60,000 Omanis compared to 300,000 expatriates, resulting in an Omanization rate of 17% (three Omanis for every 15 expatriates).
Furthermore, over 245,000 establishments employ no Omani citizens, relying instead on more than 1.1 million expatriates, thus recording an Omanization rate of 0%. This pronounced imbalance has necessitated corrective action to promote fair distribution of opportunities and enhance competitiveness sustainably.
Flexible Alternatives
To address Omanization requirements effectively, the MoL has introduced flexible alternatives, including the inclusion of self-employed and part-time workers in the calculation. Acknowledging the diverse capabilities and activities of various institutions, the Ministry has established a flexible mechanism tailored to the economic realities faced by organizations of all sizes.
Establishments that have not employed any Omanis within a year are now mandated to submit an employment plan within one month of notification. Companies with ten or more employees must implement this hiring within three months, while those with fewer than ten workers are granted a six-month grace period.
Additionally, full-time employees will benefit from a one-year grace period from the date of notification to comply with these new mandates.
To ensure the fair application of this policy and to consider the unique circumstances of certain industries, the Ministry will form a committee to address grievances and assess exceptional cases. This committee will monitor the effects of the policy’s implementation and make recommendations based on actual conditions in the field.
Special Analysis by Omanet | Navigate Oman’s Market
The Ministry of Labour’s new Omanization incentives represent both a challenge and an opportunity for businesses in Oman. Companies must adapt quickly to the mandate to hire Omani citizens, which could incur short-term costs but ultimately fosters a more sustainable workforce. Smart investors and entrepreneurs should now focus on developing robust training and employment plans to align with these regulations, positioning themselves competitively in a market poised for growth through localized labor.
