As economic hardship bites, firms deduct staff allowances in Oman

Muscat: In addition to short-term contracts, salary cuts, freeze on increments, companies are also forcing their employees to move to cheaper rent apartments as part of the ongoing cost-cutting measures resulting from poor economic conditions.

A senior official from an automobile company in Muscat, which employs hundreds of engineers and salesmen, said many mid-level employees are in a fix for the last few months after the management slashed their house rent allowance.

“Many engineers were getting House Rent Allowance (HRA) of around OMR250 for a single bed room flat. The company has cut it down to OMR200 for some and for others less than that. Where can we get a single-bedroom flat for OMR200 and below?” the official asked.

According to the official, in addition to HRA, his company has also halved the allowance for telephone bills.

“The majority (of such employees) are in sales. But the company has not considered it. They have cut their telephone bills. How can a sales person work with calling restraints?” the official added.

An engineer in Muscat, who was getting OMR250 as HRA, is struggling to find a new home as his company has cut his HRA to OMR200.

“It is quite difficult to find a decent accommodation for OMR200. We are struggling a lot. I don’t think I can find one. I am planning to quit the job and look for one in other GCC (Gulf Cooperation Council) countries or return to India,” he said.

Meanwhile, a senior official at a construction company said his colleagues, who are staying in flats with a rent of OMR350 have moved to OMR250 rental flats.

“Recently, many moved to smaller flats. It is happening everywhere in Oman,” the official added.

According to Ahmed Al-Hooti, from the Oman Chamber of Commerce and Industry, companies are not only downsizing, but cutting allowances to keep the company afloat.

“Of course, every company now has started to take precautions, not only in Oman, but most Gulf Cooperation Council countries. The situation is not to save money, since there is no money,” the OCCI member added.

“There are some companies that literally don’t have work. In this case, they will try and minimise the number of employees that are not needed, just to keep things afloat,” he said, adding that in relation to the private sector, it’s too risky and they have to take care not to overspend in such a delicate situation.

Insecurity and other job conditions like getting a no-objection certificate and a two-year visa ban are also forcing skilled expatriate employees to quit Oman.

According to the latest statistics released by the National Centre for Statistics and Information (NCSI), although the number of expatriate workers increased from 1.69 to 1.8 million between the end of 2015 and July 2016, the number of workers with advanced qualifications—diplomas, graduate and post-graduate degrees and doctorates—decreased by 1,844 workers, which meant about 300 skilled expats are leaving Oman every month.

A significant number of expatriates, who left were working in administrative positions, such as managers or directors, with nearly 1,970 workers leaving their jobs during the aforementioned period, while 631 technicians from the scientific and technical fields have also left.