Strategic Direction
A Dynamic Labour Market that Attracts Talents and Keeps up with Demographic, Economic, Knowledge and Technological Changes
Strategic Direction
A Dynamic Labour Market that Attracts Talents and Keeps up with Demographic, Economic, Knowledge and Technological Changes.
The labour market priority contains Vision 2040’s most politically sensitive and structurally challenging target: increasing Omani nationals’ share of private sector employment from 11.6% (2016) to 40% by 2040. This is the Omanisation challenge — a policy goal that every Omani government since the 1990s has pursued with limited success.
Performance Indicators
| Indicator | Baseline | 2030 Target | 2040 Target |
|---|---|---|---|
| Omanis in Private Sector Jobs | 11.6% (2016) | 35% | 40% |
| Skilled Labour % of Private Sector | 57.9% (2017) | 81% | 83% |
| Labour Productivity Growth | -1.2% (2017) | 1%-2% | 2%-3% |
The Omanisation Challenge
The persistent gap between Omanisation targets and reality is Vision 2040’s most structurally important policy failure to date. Understanding why requires understanding the incentive structure:
Expatriate cost advantage: Expatriate workers — particularly from South Asia — typically accept lower wages and have fewer statutory entitlements than Omani nationals. For cost-conscious private sector employers, the economic incentive favours expatriate hiring.
Skills mismatch: Even where Omani graduates are available, private sector employers often find their practical skills and work readiness insufficient for competitive roles. This is a genuine quality problem, not just cultural preference.
Sector-role concentration: Omanis are concentrated in public sector employment, retail, and entry-level private sector roles. They remain underrepresented in technical, skilled, and managerial private sector positions.
Cultural dynamics: A preference for government employment — which offers job security, defined hours, and social status — remains embedded in Omani society, reducing the pool of Omanis actively seeking and accepting competitive private sector roles.
2025 Progress
Current estimate: Approximately 18.5% (2024) — up from 11.6% but well behind the 2040 trajectory that would require approximately 27.5% by now.
Tawteen Platform: Launched in 2024, this digital platform directly connects Omani job seekers with available positions in both public and private sectors. Its effectiveness in closing the gap will be a key test of whether digital labour market infrastructure can shift outcomes.
Digital Employment Systems: A group of digital platforms contributing to the employment system have been developed and activated, alongside the Tawteen platform.
Vocational Education: Development of a comprehensive framework for vocational and technical education for grades 11-12 is a long-term response — today’s students are tomorrow’s workforce.
Labour Productivity
The labour productivity growth rate was negative at the baseline (-1.2%), reflecting an economy growing largely through factor accumulation (more workers, more capital) rather than efficiency improvement. The 2040 target of 2-3% growth requires genuine productivity gains through technology adoption, skills improvement, and business model innovation.
Key Institutions
Ministry of Labour, National Centre for Employment, Ministry of Education, Ministry of Higher Education, Oman Chamber of Commerce and Industry.