Oman is making it cheaper to hire foreign workers again. Here's why

More than 300,000 foreign staff left the country during the pandemic

Workers at Oman’s Duqm Special Economic Zone. Private companies in Oman are been given new government incentives to hire staff. Reuters

Authorities in Oman have slashed recruitment fees paid by companies hiring foreign workers, in a bid to boost the private sector.

The move is aimed at resurrecting the economy that was hit hard by Covid-19.

According to official statistics, about 300,000 foreign workers left Oman during the pandemic, as the private sector struggled to sustain business and cut staff numbers to make savings.

During the pandemic, the Ministry of Labour urged the private sector to replace departing foreign workers with Omani jobseekers, who numbered around 70,000 at the end of 2021, according to official statistics.

The cut on recruiting fees of expatriates will encourage private companies to bring back much needed expertise to the economy, but we emphasise that the private sector must carry on with its plans to employ Omanis

Ministry of Labour

But this was criticised by some observers, who said the aim was unrealistic.

“How can you replace 300,000 expatriates with less than 100,000 Omanis?" Muneer Al Falahi, a retired ministry official, said.

"Not all expatriates were made redundant because of the pandemic, many companies were struggling with high expatriates recruitment fees and had to cut down on their costs by letting them go.”

To make it easier for companies to employ foreign staff again, last month the ministry said it was substantially reducing recruitment fees from June.

These were reduced from as much as 4,000 rials ($10,390) to as low as 121 rials for each worker, depending on the job.

“The cut on recruiting fees of expatriates will encourage private companies to bring back much needed expertise to the economy, but we emphasise that the private sector must carry on with its plans to employ Omanis,” the ministry said.

In a bid to boost the recruitment of locals, the government has also introduced a scheme paying 150 rials a month for 12 months for every Omani employed by a private company.

In addition, companies where the workforce is made up of at least 30 per cent Omanis get an additional 30 per cent discount on recruitment fees when hiring foreign staff.

“This sum of money will help employers with the training of young Omanis,” the ministry said.

Companies welcomed reduction in fees for recruiting foreign workers.

“We were really struggling to pay the high cost of expatriate recruitment fees. We had 12 of them and we really could not afford it," said Mustafa Hussein, director of AlBatnah Constructions.

"We welcome the cutting down of the fees and this is a relief to us."

Other business owners praised the cash incentives for recruit Omanis.

“We now have two incentives coupled together; the fee cut down of recruiting a foreign workers and the monthly payout we will receive if we employ Omanis," said Rashad Al Humaidani, who runs the Ladheedh restaurant chain.

"It is a win-win situation for employers and Omanis looking for jobs.”

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