Higher recruitment costs, resulting from new fees such as those introduced by the Royal Oman Police (ROP) on Sunday, will affect companies recruiting expatriate workers, but will also help to raise the government’s revenue as well as benefit Omanisation, companies and HR professionals said.
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Thasleem Khan, CEO and managing partner of Intelligent Parking and Elevator Company, told the Times of Oman that his company is ready to pay the extra fees to recruit an expatriate.
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“It is unavoidable. We have to support the government at this stage,” he said. Khan said that it would not impact the recruitment of expatriates in his company. He said that whenever they are looking for skilled people, either expatriate or Omani, they will be ready to bear the costs of recruitment.
However, the costs are an increasing burden on his company. “At this market situation, it is difficult to bear,” he said.
An official of SPAR supermarkets in Oman said that although the fees will not have much impact on recruitment, the extra costs will add up to the pressure felt in the current market situation.
“It may not have a huge impact on recruitment, but it will have an impact on the business in terms of profitability,” he said.
However, he added that his company is ready to pay the extra cost to employ expatriates.
Tonia Gray, general manager at Competence HR, told the Times of Oman that higher fees will indeed affect companies in Oman. “Any increase in these costs is not good for companies, when they are struggling at the moment. Although individually these extra costs for hiring an expatriate are minor, add them altogether and it becomes quite expensive,” she said.
Smaller firms to be hit
Gray said that as mostly smaller companies will be affected in sectors the government is seeking to encourage, this might have a negative impact on the economy.
“This will have an impact on a lot of the smaller companies in construction, retail and hospitality, for example. Hitting such companies is a bit of a negative step,” she said.
Gray said that the higher recruitment costs borne by companies will also hit the recruitment of expatriate workers in Oman.
“It is to be expected. I think all companies expect the government to introduce such measures to get revenue. I think all of the aims in this regard will hit the recruitment of expatriates,” she said.
However, higher recruitment costs for expatriates may turn out to be beneficial to the government’s efforts to nationalise the workforce.
“Although expatriate salaries are generally lower, if you add costs of visas, costs of transport, costs of flights home, it might even out the difference between hiring expatriates and hiring Omanis,” she said.
She said, in that case, it might turn out to be cheaper for companies to hire Omani nationals instead.
Gray said that companies facing higher recruitment costs will be more inclined to hire Omanis, but only for junior positions, which have lower overall costs. “At the senior level, an extra OMR10 is nothing,” she said.
Will help the government
Ahmed Al Hooti, a member of the Oman Chamber of Commerce and Industry (OCCI) said that the extra fees will hardly impact the recruitment of expatriates, but will help the government to limit the impact of the oil crisis.
“It is not a big issue. These fees will help solve at least a part of the problem. We need to help the government solve the crisis,” he said.
Al Hooti said that the private sector has to help in solving the crisis. He said that since the percentage of expatriates in the workforce has grown in recent years, he does not expect these additional fees to have any impact.
However, Al Hooti agreed that higher recruitment costs might benefit the Omanisation of the workforce.
“It has to be this way. We have around 50,000 Omanis looking for jobs in the next two years and they cannot rely on the government sector. Their only chance is the private sector,” he said.