Barriers to Omanisation: Analysis and Policy Recommendations

Rapid economic development in Oman and other Gulf States has attracted foreign workers who now constitute 87% of the workforce in the Omani private sector. Unemployment rates among Omanis are now a serious socioeconomic problem that impacts the stability of Omani society and which has compelled the government to introduce a policy of job-localisation. However, recent statistics revealed that only about 14.6% of jobs have been omanised (Ministry of Manpower, 2014) indicating limited policy success.
This study examines the challenges to the implementation and success of Omanisation in the private sector by exploring the views of officials and managers and, importantly, the often neglected views of employees. It employs a theoretical framework based on three aspects of capital theory: human capital elements, that is, education, T&D, skills, and experience; social capital factors, such as gender inequality, Wasta/nepotism and trust; and organisational capital variables, such as organisational culture, English fluency and HRM policies. A total of 496 questionnaires were completed by employees in three sectors; banking, tourism and auto retailing. Statistical analysis showed that the greatest differences emerged in the areas of gender inequality, training and development and working conditions. Overall, women employees, unmarried employees, lower-income employees, junior employees with little in-company training, and employees with lower educational levels perceived the highest barriers. More specifically, the level of in-company training was the most influential factor showing differences in twelve out of the fourteen human, social and organisational factors included in this study as barriers to the policy.
The findings replicate previous research on job-localisation in the Gulf States regarding the impact of the private sector’s stereotypical perceptions of local workers concerning lack of trust in Omanis and views that they are less productive. However, this study contradicts most previous studies as it found no evidence that the educational system or English language skills were barriers to the employment of locals. This reflects the effectiveness of recent government measures to improve the quality of education. In addition, this study found no significant impact from wasta and nepotism, unlike previous studies. This is attributed to the satisfaction of nationals with the measures taken by the government in response to the 2011 uprising.
The primary contribution of the study, however, comes from interviews with officials and managers who deal directly with Omanisation. Interviews revealed factors that perpetuate the domination of expatriates in managerial roles and unveiled some sensitive issues that people usually avoid disclosing for fear of upsetting policy makers. These include inter-faith conflict, social distance barriers, organisational silence barriers and institutional structure barriers. Participants also reported suppression of Omani employees’ rights to promotion and career-development. Barriers to Omanisation were found to be higher in the automotive sector indicating that policy implementation is sector-dependent. Policy makers are therefore advised to take this into consideration when designing Omanisation programmes to catalyse Omanisation in some sectors.