Omanis got highest regional wage growth over past decade

Omani employees have enjoyed the highest growth of wages among Arab countries over the past 10 years, a new report by the country’s Majlis Ad Dawla (State Council) has shown.

The report, which is called the Study for Integrated Standard of Living and Productivity, reviewed the change in salaries and productivity at work, as well as standards of living in Oman.

Dr Rashid Al Yahyai, a member of the State Council’s Education and Research Committee, explained the findings of this study to Times of Oman, saying, “Wages in Oman grew 11.4 per cent over the past ten years, the highest growth in the area region.”

“This wage growth is almost twice the increase in salaries when compared to the country that was ranked second in the region: the Kingdom of Saudi Arabia recorded a wage increase of just 6.4 per cent over the corresponding period. The study by the State Council did not only look at wages, but also how much the government invests in education, health, and housing in Oman.”

These comments came during the 14th ordinary session of the State Council on July 1, which included the committee’s statement regarding the study and its proposals.

Al Yahyai added:“The study shows that the government has worked to designate the majority of its spending on sectors that increase the individual productivity of Omanis, such as education at 17 per cent of Oman’s spending for the 2019 budget, health at 11 per cent, and housing which made up six per cent of the budget.”

“When it comes to human development, Oman came in as the 5th best Arab country and 48th globally according to the UN’s Human Development report for 2018,” he added, explaining that Oman is working to develop people and make sure they have everything they need to live a good life and help progress the country.

However, he explained that every employee has value added to them via education and development, which impacted them and Oman’s economy.

Al Yahyai said: “A low added value for a person can negatively impact the increase in that person’s growth of living standards, as well as the company employing him. We have seen from the study that 68 per cent of employees in Oman have a middle school degree or lower, and only 11 per cent of employees have a college diploma or higher.”

“We have suggested that companies designate two to five per cent of their salary rolls exclusively for training and developing their current Omani workforce because studies show that developing workers will improve their productivity,” Al Yahyai added.

Asked by Times of Oman whether the higher costs of developing Omanis might discourage companies from hiring locals, he said, “Companies wanting to hire Omanis relate to how convinced they are of a higher productivity, so the Omani employees must be able to prove themselves in that setting. Employees, companies and even the government should generally work to make Omanis qualified to be more productive.”

While hiring Omanis is one step, Al Yahyai thought expats also had a role in improving Oman’s ability to compete. He said, “Our committee’s recommendations so far are to attract skilled and educated workers to Oman and to work to hire more Omanis in the private sector.”

According to the study, the International Monetary Fund is also looking at Oman’s productivity per worker.

He said: “The IMF believes that the decrease of productivity is due not only to Oman using unskilled and uneducated labour, but also because of a lack of hiring skilled and educated Omanis in the private sector. In order for that productivity to increase, there is a need to incentivise hiring skilled labour. The IMF sees the productivity per worker in the GCC as unsatisfactory because of the practice of hiring cheap labour in these countries.”

“If we compare the productivity of workers in Oman with workers in two European countries, we will see that a worker’s productivity in Oman is only 34 per cent of that of an average worker in Greece, the European country with the lowest productivity. It is also only 17 per cent of a worker’s productivity in Ireland, the country with the highest average,” he added.

A financial analyst in the country said: “Companies in Oman and the rest of the GCC are now pursuing policies of Omanisation and other nationalisation programmes, so that their locals can be gainfully employed. The private sector provides many opportunities for locals to learn and improve their skill sets as well as promote growth and development.”

“For this to happen, there is a need to incentivise hiring locals and ensure that they get a good, sustainable standard of living, which is what has been happening over the past few years.” he added.

In addition, Maimunah Shebani, the director of The Retail Agency, said that many Omani employees were happy to work for the salaries being offered to them. She conducts training programmes in the retail sector for recent graduates, as well as those who are soon to graduate.

“High school graduates are very happy with the salary they receive,” explained Shebani, an Omani national. “We have trainees who are yet to complete school, and they are also happy with the salaries they get because the retail sector tends to give employees a little extra so that they do not go elsewhere or leave their current job”.

She added: “Some bachelor’s degree holders also say that they are willing to work for the wages offered to them, some of them even at slightly lower rates. For example, I have one employer that is going to take 75 employees and all of them, more or less, are going to be earning the same pay. Omanis are willing to work at a reasonable salary to start their careers.”