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Progress Towards Omanization: Implications From A Psychological ContractingPerspective

Refereed paper

Swailes, Stephen; Al Said, Loay; Al Fahdi, Saleh

Abstract

Replacement of foreign labour with local labour is central to national HRD strategies found in the GulfStates and elsewhere. This paper presents the findings of discussions with senior Omani governmentofficials and private sector managers looking at progress towards localisation and at the further actionsneeded. The main findings are that the employability of locals remains a key supply side problem andemployers preferences for expatriates remains a key demand side problem. Psychological contracttheory is used to position a discussion of employability development.

Key words: Oman, localization, psychological contract, private sector, employability.

Introduction

Localization policies - the replacement of foreign workers with skilled and qualified local labour - are afeature of economic development in the Gulf States and this paper reviews progress towards localizationin the Sultanate of Oman. Omanization, along with diversification (away from oil revenues) andprivatisation (to reduce the role of the State and to focus the State on strategic direction and policy) hasbeen one of the three cornerstones of Omani economic policy since the launch of Vision 2020 in 1996(EIU, 2009a, MNE, 2010). Localisation strategies in the region are inevitable given the context of risingpopulation, increasing unemployment, improving general levels of health and expanded educationsystems. If high unemployment is to be avoided it is essential that qualified people leavings schools,colleges and universities are absorbed into the local labour force. The paper begins by summarisingprevious research into localization in the Gulf region before summarising economic development inOman. Findings from discussions of progress towards localization with officials and managers are thenpresented. Barriers to Omanization are identified and implications for future progress are derived frominterpretation of findings from a psychological contracting perspective.

Localization

Localization (nationalisation) strategies are now firmly embedded in Gulf Cooperation Council countries totackle present and potential unemployment problems (Forstenlechner, 2010; Girgis, 2002; Harry, 2007).

At an operational level they share a common approach of imposing quotas of local employees ontoemployers in different sectors and occupations. Specific literatures have emerged on Saudization (AlDosary and Rahman, 2005; Al Shammari, 2009; Mahdi and Barrientos, 2003; Sadi and Al Buraey, 2009),Emiratization (Al Ali, 2008; Godwin, 2006; Rees, Mamman and Braik, 2007), Kuwaitization (Al Enezi,2002; Salih, 2010) and Omanization (Al Hamadi, Budhwar and Shipton, 2007; Al Lamki, 1998, 2005).

Bahrain, Oman and Saudi Arabia have seen the most intensive efforts, ahead of Qatar, the United ArabEmirates and Kuwait, and the World Bank (2004) reports that only Oman has taken steps to control

employment in the public sector which, given national income surpluses from oil revenues, can beexpanded by the State to absorb qualified locals. This particular tactic has been seen in Kuwait (Al Enezi,2002) and the Saudi government is accused of turning its public sector into a vast social welfare systemby hiring locals for non-existent jobs to tackle unemployment problems (Al Dosary and Rahman, 2005).However, if left to market forces (and thus heavily influenced by employers) progress towards Saudizationis likely to be much slower given employers preferences for expatriate labour and strong localpreferences for public sector jobs (Al Shammari, 2009). Furthermore, attempts to push Saudizationforcibly rather than through reasoning and persuasion has led to low motivation among governmenttrained local employees (Sadi and Al Buraey, 2009, p.83).


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Omanization

Economic and social development have advanced rapidly in recent years. The total population grew to2.9 million in 2008 with 31% expatriates. Of the 2.0 million Omanis in 2008, 35% were under 15 and 38%were aged 16-29 demonstrating the youthful composition of the population and emphasising theimperative to provide jobs and to develop the employability of young Omanis.

Although foreign labour has been essential to build national infrastructure the need to integrate qualifiedand skilled local labour into the economy has been long recognised (Sultanate of Oman, 1991). In the1990s the government supported this policy by compensating employers for up to 18 months foremploying and training locals and employment law introduced in 1991 protected Omanis working in theprivate sector. That same year a Vocational Training Authority was created and linked to theimplementation of National Vocational Qualifications. Although abolished in 1997 and its remit wastransferred to a new Ministry for Social Affairs, Labour and Vocational Training (Wilkins, 2002). TheMinistry of Manpower was created in 2001 to support Omans social and economic objectives. Keyfunctions include; policy making, framing laws and regulations, licensing expatriate, providing training,matching market needs and maintaining a labour market information system.

Schooling in Oman begins at age six and, although there is some drop-out, most young people persistwith their education and sit examinations for a General Education Diploma at 18. Sixty one thousand

students took the Diploma in 2008 of whom 83.6% passed. Higher education is served by one stateuniversity (Sultan Qaboos) and 24 private universities and colleges. In addition there are colleges ofapplied science, banking, health studies and five vocational training centres. The numbers of students atthese institutions is around 100,000 (see Appendix I. Assuming courses are on average of two or threeyears duration then the annual output of graduates from higher education is around 40,000 (see also EIU2009b).

However, despite having one of the fastest growing post-secondary education systems in the world thenumber of college and university graduates each year already exceeds the numbers of jobs availablethrough economic expansion and natural labour turnover (Al Barwani, Chapman and Ameen, 2009). TheWorld Bank (2004) reported that governments in the Middle East have acute challenges in creating andproviding jobs for those who have benefitted from intermediate and higher education for whom the threatof unemployment is high. Conversely, unemployment is lower among those people without higher levels

of education and who are not qualified to work in the public sector although the wage levels andconditions that they experience may be poor. Given the youthful nature of the Omani population, thissituation is tightening and pointing-up the importance of local employment strategies. A confoundingfactor is concern about declining future oil revenues and the ability of the State to fund further and highereducation as generously as it has done (Chapman, Al Barwani and Ameen, 2009).

Omanization targets are published by the Ministry of Manpower and different targets are set for a widerange of occupations and occupational levels (see Appendix 2). Targets are adjusted, sometimesdownwards, to fit the prevailing economic situation and outlook. Since early 1998, organizations that meettheir Omanzation targets have been awarded a Green Card which gives them preferential treatment fromthe Ministry. Such treatment involves, for example, faster approval of applications for expatriate labourpermits. The government also operates a Sanad programme aimed at supporting Omanis aged 18-40who want to start their own business with loans of up to 5,000 OR.

The two most notable examples of successful Omanizaton are found in banking and in the nationalairline. Al Lamki (2005) reported 90% Omanization in the banking sector and this was linked to the factthat financial institutions have existed for longer, the nature of much of the work suits female employmentand there have been clear strategies by banks and the airline to employ local labour. The two sectors arealso important parts of the national infrastructure and it seems likely that they were prioritised for reasonsof national security and symbolism.

Omanization levels for 2008 in the Civil Service and Public Corporations reached 85.5%. Althoughtechnology-oriented public departments such as aviation and health continue to rely on expatriates to fill


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some posts the public sector is approaching saturation in terms of local employment and it is unlikely toget any bigger. Overall levels of local employment in 2008 in the main private sectors were; banking 91%,oil and gas 75%, insurance 58% and hotels 43% (Ministry of Economy, 2009). Of the 147,000 Omanisworking in the private sector, 76% earned less than 200 OR per month with an overall average of 217 ORper month (about $560). Existence on such low wages often necessitates close family structures withfamily groups living under one roof to spread accommodation costs and to ease the burden of care forchildren and the elderly.

The picture thus painted is one where expatriates vastly outnumber locals in the private sector and ofrelatively low wages for locals. Given the economic and social background to localization and therelatively low levels of research into localisation strategies in individual countries (Rees et al, 2007),further research into the progress of Omanization is needed. The main questions guiding this researchwere 1) how do senior government officials and private sector managers see progress towardsOmanization, and 2) what further actions are needed to assist Omanization processes?

Method

The focal informants for this study were drawn from the government departments responsible forOmanization policy and leading private sector employers. High level access was negotiated and aninterview protocol was developed to cover issues surrounding Omanization with participants. Interviews

were conducted with representatives from the Ministry of Manpower, Ministry of Social Affairs, Labour andVocational Training, Ministry of National Economy and the Ministry of the Civil Service. All intervieweeswere with senior officials with responsibility for vocational training and human resource development up toand including the rank of Minister. In total, eleven interviews were conducted in the four ministries. Toobtain private sector perspectives, interviews were conducted with managers responsible for humanresource development in 14 private sector organizations chosen for their active involvement in theOmanization process. Sectors included banking and finance, petrochemicals, air transport, retailing,automotive supplies, consumer electronics, engineering, shipping, and hotel management.

The first step was to negotiate access to interview a Minister to clarify official policy on Omanizationbefore conducting the main body of the research with other officials and the private sector. The finalinterview was with a Director General in another Ministry and was used to explore issues raised in themain phase of the research. Although generic lists of barriers to localization are available (eg,

Bhanugopan and Fish, 2007), the approach taken here was to let the factors specific to Oman emergefrom the data rather than impose an analytical framework at the outset (Miles and Huberman, 1984).Transcripts were produced immediately after each interview and analytical notes were produced as theresearch progressed. Provisional coding was continually revised as new material was generated and bythe 24th interview no further revisions were emerging from the data. At this point interviews with managersstopped and a final interview with a Director General was arranged to review findings.

Interviews took place on the basis that they remain confidential to protect identities. Research of this kindin the Gulf region remains sensitive as it is socially undesirable to appear to be critical of government orits representatives. This is particularly important for government employees and, in respect of thisconvention, direct quotations from government officials are not shown here nor do we imply any criticismof government policy or organizations in this paper. Rather, our guiding philosophy is to report researchinto a strategically important area as a contribution to assisting national policy and the development of

people.

Progress towards Omanization

Progress towards Omanization is discussed below and is structured around the four main themes toemerge from the data; public sector attractiveness, scepticism, remuneration and employability.


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Public sector attractiveness

The high level of Omanization found in the public sector is attributed to the general preference of Omanisto seek jobs in administrative or managerial positions and in government (see Al Lamki, 1998). Shorterworking hours, longer vacations and perceptions that public management carries sought after statuscontinue to add to its attraction. There is a strong social norm around commitment to family more so thanan organization hence shorter hours and longer vacations develop a strong psychological attraction. Itwas also suggested that there is a general dislike of jobs involving manual labour but this, we suggest,stems from its historical association with low pay. Where pay levels are higher, for example in oil and gasproduction, local labour is not so averse to taking manual work.

Scepticism among private sector managers

As noted above, two sectors in particular employ high proportions of locals; the national airline Oman Airand banking (Al Lamki, 2005). The banking sector in the Gulf has existed for longer than other sectorsand is relatively well placed to recruit talented Omanis. Banking and the national airline also have astrategic importance to the country that calls for high levels of localisation for reasons of security andindependence. However, some negative attitudes towards Omanization were found as illustrated by thiscomment:

The officials behind Omanization are not fully aware of the actual conditions of trade,economy, company management systems and operation of private sector enterprises.Their interference into the nuances of work may cause a lot of harm for the wholeenterprise, especially if it operates internationally. It creates some chaos which theseofficials might not appreciate. They tend to think that Omanization is simply the forcingof Omani personnel into a company or just the employment of Omani staff into avacant position, though they know that there are no qualified Omani individuals tooccupy that post. In other words, in the process of Omanization they simply care fornumbers only. (Private sector manager)

This sentiment suggests that some employers see the drive behind Omanization as a numbers gamefirst and skill development second. At this stage of its development, Omanization is still focussing on filling

junior positions much more than senior positions. This can be explained in terms of risk avoidance as

businesses cannot put themselves at risk by putting inexperience into positions where it can do harm. Toperpetuate the situation, managers in senior positions can use their position power to withhold informationand opportunities from juniors to protect their positions or to favour other expatriates. The reference tointerfering with the nuances of work connects to complexity theory explanations of change which seedifferent organizations as presenting different levels of receptiveness to it (Houchin and MacLean, 2005).If organizations are seen as an outcome of interactions among sets of complex processes then the levelof success of localization in an organization is influenced by practices that are already present andoperating.

Remuneration

There was a high level of agreement that remuneration levels in the private sector presented difficultiesfor localization particularly in small and medium sized enterprises where salaries can be much lower than

in public or large private organizations. Aggravating this is the situation under which, even at low wages,SMEs can easily hire expatriates as the local wage levels may be higher than found in the expatriateshome countries (in Omans case typically India, Bangladesh and Pakistan). Given that wages for mostoutside the oil and gas sectors are generally low there is a tendency for employees to switch employers togain small wage increases. However, this effect is not solely confined to low paid workers,

The Company's policy is always based on supporting the citizen based on his/herpresent situation. For example, some employees are paid less than OR200 per month.This minimum wage class has served the country well, and they keep working for thecompany despite the attraction from other companies. As for high- or middle-ranked


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key positions, the policy did not serve the country well. Some of these workers, forexample, work for about 3 months or so and then move to another employer. Thisseriously affects the flow of work in the company. Hence, I wish that a strong policy isput in place to stop these violations. (Private sector manager).

Faced with this situation, some large private companies have reshaped their pay practices to respondbetter to the pressures of Omanization. One of the banks reported that high turnover of Omanis with lowtenure was tackled through a redesigned reward system. The extract points to a problem for employersbrought about by the ease with which new starters can move from one employer to another. In a contextof localization there is a balance to be considered reflecting the investments that employers put intoemploying local labour and economically viable tenure. Restricting ease of movement, however, seemsan unlikely development in localization policy.

Employability

The Ministry of Manpower provides vocational training to work-ready people aged 18 or over. Companiesthen hire locals through under-training contracts with the Ministry and supplement government trainingprogrammes with organization-specific training as illustrated by the general manager of a refinery,

The Company set up well-established internal training procedures to train Omani

personnel on work sites directly. This has brought the best profit performance and alsohas motivated us to Omanize a lot of positions.

Intensive training programmes were cited as a critical factor behind Omanization and the national airline,Oman Air, was put forward as an exemplar. However, despite the training infrastructure that exists,almost all private sector interviewees considered that young Omanis in particular lacked the skills andexperience to operate successfully in private sector cultures and had a strong dislike of the longer hoursthat are often expected. One Operations Manager said,

Local workers are frequently absent, particularly during summer time, they dont payenough attention to the company's welfare, they neglect labour law, and they misswork while they are in charge of critical task assignments.

The suggestion that locals neglect labour law is interpreted as meaning that they do not pay sufficientattention to their obligations to their employer under Omani employment law such as attendance,reliability and delivering satisfactory performance. The comment about ignorance of company welfare(goodwill) and labour law points to a general mismatch between the expectations of young Omanis andemployers expectations in terms of the employees input to a job. Employers felt that young locals did notappreciate the importance of high service standards, reliability and respect to others in building andmaintaining corporate reputation and success. Standards could be compromised by an uncaring attitude.The general explanation put forward for this state of affairs connected to employees sensitivity to lowwages and long hours. Basically, it was seen as a social exchange situation in which the loyalty andcommitment levels of employees adjust (fall) to match their perceptions of under-reward consistent withequity theory predictions (Adams, 1963). The situation is aggravated by a lack of appreciation by locals ofcontractual obligations in relation to performance at work. Unsatisfactory performance was also raised inthe context of employment law which was seen as adding a layer of protection to locals.

Revision and amendments to labour law make it easy for the private sector to hireOmanis but very difficult to fire them when they fail to turn in expected performance orare persistently found to be neglecting their assigned duties. But it is much easier forthe company to terminate expatriate workers on similar grounds.

Omani employment law, however, makes no distinction between locals and expatriates yet this commentdraws attention to a level of reluctance among private sector employers to tackle poor performance bylocals. One reason for holding on to poor performing locals is that firing them does not help theorganization to achieve its localisation targets particularly in small organizations and may raise concerns


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in government departments about the actions of the company. Secondly, the employer may struggle torecruit another local who will perform any better to take their place. Responses to this have included atightening of recruitment and selection practices in relation to hiring Omanis followed by better training.Greater attention is given to communication and computing skills and the ability and willingness to work inteams. Successful new hires then undergo internal training and development programmes. A consumerelectronics company had responded as follows:

Theoretical and practical training are provided to Omani staff over a one and a halfyear period. And we are attempting to Omanize all positions in the Company byactively collaborating with the Ministry of Manpower with regard to the training andeducation programmes to achieve high Omanization percentages.

A luxury goods retailer pointed to the need to connect the expertise held by expatriates with thedevelopment needs of local labour,

The Company believes in internal training of young Omanis and the Company hasmany highly-qualified expatriate personnel. Hence, our Omani youth can be trainedwhile doing their work under the supervision and guidance of the expatriatesexpertise.

This process is not without problems, however, as noted by a petrochemicals manager,

Many expatriate workers have the tendency to bring in workers from their own countryand also are not willing to transfer their expertise to their Omani staff through trainingor mentoring.

This comment identifies some known problems of cross-border knowledge transfer and the idea ofstickiness (Szulanski, 1996). Stickiness refers to barriers to transferring knowledge which include thesocial and relational contexts that exist between expatriates and host country nationals (Riusala andSmale 2007). While this cross-national problem should diminish as Omanization increases, there remainsa longer term, supply-side issue concerning the alignment of vocational and higher education providerswith employers skills needs. There was, however, no appetite among participants for criticising thegovernments training and education infrastructure. Most participants (19) felt that it was inevitably a

gradual and slow process to create training and development programmes that matched employers skillsneeds. One human resource manager in the banking sector remarked,

With more time and with the spread of more qualified Omanis through the Ministrystraining and education programmes there must be a lot of training to be given first,second, the acquisition of experience by these qualified Omanis, and thenOmanization comes last.

This comment gives a mature perspective to localization that it is far more than numbers in posts andthat true Omanization will occur only when the skills and attitudes of locals match labour market needsand when locals can take senior posts and develop others by transfer of the their skills, experience andleadership. However, for the present, there was a high level of agreement among both public and privatesector participants that much more needs to be done to develop a different work ethic in young Omanis.

Their caution about the working conditions typically found in private organizations was seen to manifest inlow motivation which compromised their prospects for advancement. The same attitude was found in AlLamkis (1998) survey of Omani graduates where the public sectors status as the traditional employer ofOmanis was a factor in explaining cautious attitudes to private sector jobs and entrepreneurship.

Discussion

Preparing young people for a labour market and the interactions between employers and educationsystems are long standing social challenges. When the population of 2.9 million contains 0.9 millionexpatriates it is plain to see that Omanization has ample scope to make greater inroads than already


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achieved. Oman has a sound education system and through its oil revenues should be able to fundexpansion of the system as needed. While additional skills are vital, our findings suggest that the catalystfor localization in Oman is attitudinal change that will create a better fit between private employees andthe expectations of young Omanis. Seen in this way, localization strategies can draw on psychologicalcontract theory for theoretical insight.

Psychological contract theory is relevant because it captures and explains an employees unique anddistinctive beliefs about the mutual obligations existing between them and their employer (Cullinane andDundon, 2006; Rousseau and Tijoriwala, 1998). These obligations classically describe the individualemployees understanding of contributions in terms of effort, loyalty and attitudes and his/her ideas of howthe organization should respond to them in terms of pay, promotion and security. The organization,however, also has a legitimate perspective in the employer-employee relationship (Guest, 2004).

Views of young Omanis towards work appear rooted in what has been called a relational type of contractwhich reflected working life for many in the West until changes to competitive conditions gathered pace in1980s. Under a relational contract, employees give loyalty and reliable performance in return for securityand steady, even if slow, promotion (Rousseau and Parks, 1992). This model became less viable aspublic and private organisations struggled to cope with spending cuts and increasing global competitionand turned to new tactics such as downsizing, contracting-out and greater use of temporary workers togive tighter control over labour costs and labour flexibility. As relational contracts diminished, transactional

contracts emerged to fill their place (Hiltrop, 1995). These see mutual obligations in terms of a set ofrenewable transactions (such as economic rewards given for a project delivered on time) but with reducedif any expectation on both sides that work is secure in the long term. The different types of contractrepresent a shift from expectations of a paternalistic employer with obligations to provide continuingemployment to a situation where employees have a much higher obligation to enhance and demonstratetheir continuing employability in the labour market.

The challenge for localization policy makers, however, is to understand how psychological contracts areformed because they are in pole position to influence contract formation. Key questions are, how docontracts form and what actions by the State and by employers contribute to shaping them? One of thechallenges of localization that arises can be seen as engineering the social situations that areperpetuating the attitudinal states that exist. Psychological contracts begin to be formed in the pre-employment stages (Rousseau, 2001). They develop over time as expectations of mutual obligations

emerge from experience as well as observation and may in fact be continuously created andrenegotiated through processes of socialisation, feedback seeking and role creation and development(Rousseau and Parks, 1993 p.29). Hence, the actions and words of teachers, interactions with employersduring training and during selection processes all contribute to setting expectations in future employees.The first few months of employment are also instrumental in shaping an employees views of mutualobligations and performance expectations. Once formed, psychological contracts are easily broken butthey are far less easily restored to accommodate both employee and employer expectations.

Contract formation in an individual can be seen as a goal-oriented process (Shore and Tetrick, 1994)such that individuals interpret and give meaning to external events (words and actions) that impinge ontheir personal goals. This suggests that localization strategists need to be targeting the processes that areshaping the career goals of their youth. Information about the working environment released bygovernment agencies and employers should be evaluated for its likely impact on the type of contract it will

contribute to developing.

There are precedents for attempting to change the ways people think about work at societal level (seePoole and Mansfield, 1993; Shackleton, 1998). Successive Thatcher governments, for instance, sought tomove the UK workforce away from what it saw as heavily unionised and adversarial employee relationstowards a more entrepreneurial and individual culture. Following the May elections in 2010 and in light ofthe UKs national debt situation, the UK government is again insisting that public employees in particularmust reshape their expectations in terms of future pay rises, pension entitlements and retirement. Thesenarratives employed by government will play a part in reshaping attitudes to public employment amongcurrent and future employees.


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Key aspects of the contract formation process in Oman relate to anxiety about general conditions, inparticular wage levels, working hours and job (in)security. Two of these factors, wages and hours, aretangible whereas insecurity is something that people feel and believe to exist (Guest, 2000, p.141) andtheir feelings may not match the actual likelihood of job loss or of securing another job if one is lost.Beliefs about insecurity can be managed and this must now become a challenge for those in governmentand vocational and higher education who are managing localization. A second strand to changing theconditions for localization comes from strategies that are aimed at developing employability (Clarke andPatrickson, 2008; Mason, Williams and Cranmer, 2009); that education systems should develop therequisite knowledge, skills and attributes and that employees continue to develop across their workinglives. Employability, or attractiveness in the labour market, is a powerful antidote to insecurity.Furthermore, while it is very much about knowledge, skills and attributes, employability is also influencedby employer brand (Moroko and Uncles, 2008). People who can put several years experience with a topemployer on their CV see their employability enhanced by association with that employer. Issues arisetherefore relating to the employer branding strategies used by Omani organizations that relate toprojecting employer of choice attributes.

Raising employability, while reassuring the employee, poses risks to employers because, by definition,they have more marketable employees. It therefore falls to employers to create human resourcemanagement architectures (Lepak and Snell, 2002) that help to retain their most employable people

strategies that have implications for the design of reward strategies. The emphasis lies with total reward(Kaplan, 2005) which is the sum of the financial elements (salary, pensions, insurances) plus thepsychological value to the individual of non-financial elements (learning, the work itself, the employerbrand).

Changing the attitudes of young Omanis, however, requires sound evidence about working life in theprivate sector. There is a need to develop a more detailed, evidence-based understanding of the labourmarket and such a survey should include both employees and employers views of the present and futurescenarios such as wage levels and job security. A comprehensive and broad survey of working life andconditions would provide evidence to feed into intermediate and higher education policy and to shape thedesign of learning and teaching strategies. Case studies would also be valuable in this context. Whatever,the outcomes of the surveys, rosy or otherwise, they will identify policy signals to follow.

The main limitation of this paper is the modest sample size obtained but we feel this is offset by the highlevels of seniority of the government officials and managers interviewed. Indeed, the seniority of theparticipants is a distinctive feature of this paper. Furthermore, the broad range of sectors includedsupports the generalisability of the main findings in an Omani context.

Conclusions

The paper reports on current progress towards Omanization. Localisation policies are proceeding steadilyas labour markets undergo gradual adjustment. Successful localisation has required an activecollaborative participation between government and private organizations and we can identify two broadbut related conclusions. On the supply side, there is still a mismatch between the supply of skills from theeducation system and the skills needed by employers which needs to be tackled. On the basis that it iseasier to develop technical ability in employees who show good attitudinal fit with organizational cultures

and management styles (ie, where good person-organization fit exists) than it is to leverage goodtechnical ability into mismatched fit situations, then education systems in Oman need to put moreemphasis on acculturation in relation to the demands and expectations of the contemporary private sectorworkplace. The quality of teaching will need to change and pressure to do this will come from employersand we anticipate from the elected Consultative Councils (Majlis Ashshura) that advise government butalso from students in higher education who will see the private sector as their most likely destination,short of leaving Oman to work elsewhere. More emphasis needs to be placed on attitudinal employability

developing different appreciations of the on the ground reality of working life in modern Oman.


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On the demand side there is, in effect, unequal competition in the labour market as many privateemployers still favour expatriates because of their assumed higher work ethic and commitment to the joband to the organization. Expatriate labour continues to be vital to support stable and competitivebusinesses. This situation is compounded by organizational cultures, particularly in small and mediumsized enterprises, that do not encourage local labour as much and which could be more sociallyresponsible in terms of the working conditions offered. If these two issues can be addressed then agradual easing of tensions in the localization process should occur. In the long run, tackling employabilitythrough psychological contracting approaches will impact upon the suitability of locals for middle andsenior management positions and this should catalyze the process. Our suggestions call for greaterattention to the realm of young Omanis and to their concerns about their readiness for working life.Pursuing a better understanding of this aspect of localization must surely be worthwhile.

Appendix I. Students by higher educational institution in Oman, 2008/09

Institution Number StudentsSultan Qaboos University 1 15,000Private universities and colleges 24 33,520Special Education Schools 3 1,150Colleges of Applied Science 6 8,000Technical Colleges 7 21,000Vocational Training Centres 5 3,000Banking and Finance College 1 1,500Institutes of Health Studies 16 2,290Shariah College 1 910Students studying abroad - 14,000Total 64 100,370Source: Statistical Yearbook, Issue 37, November 2009.

Appendix 2. Examples of Omanization targets by sector, 2010

Sector Occupation or establishment type Target (%)Information technology Senior management 9

Sales and marketing 100Technical support 15Telecoms Engineers 54

Skilled labour 80Travel and tourism Aviation 90

Tourist restaurants 90Consulting services Engineers 25

Accounting 60Administrative posts 90

Private schools Academic posts 15Non-academic posts 58

Private universities and colleges Academic posts 16Non-academic 74

Private training centres Management and finance 90Technicians and assistant trainers 35

Source: Ministry of Manpower, September 2009.


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