Average salary growth in Bahrain over the last 12 months stood at a steady 3.5 per cent against a forecast of 5 per cent amidst global economic pressures and regional unrest, said a report.

More than 70 organisations in Bahrain took part in the study which is published annually by consultancy company Hay Group.

The report which analyses salary information for more than 12,400 employees in the kingdom predicts increases of 5 per cent over the next 12 months.

Against a backdrop of regional change and wider global economic influences, Bahrain's pay market is stabilising, said Hay Group reward information services manager Warren D' Cruz.

"Following the global economic slowdown, of which Bahrain felt the impact during 2008 and 2009, the kingdom has witnessed a steady growth in basic salary this year," he said.

"Financial services, which has a long established history in the kingdom, is the highest paid sector which pays an average of 17 per cent more than the general market.”

"In 2008, we witnessed double digit salary increases of 13 per cent. This then fell to just below the rate of inflation in 2009 during the global economic crisis - during that year pay rises were 2 per cent on average. We then see new growth in 2010 and 2011 which track inflation more closely," he said.

"Over the next 12 months, we forecast 5 per cent growth which would keep pay movements ahead of inflation," he added.

"This means the purchasing power of employees earning in Bahrain will still grow despite the actual numbers appearing less impressive than say three years ago.

"Employers in Bahrain tend to make changes to basic salary which gives us the figure of 3.5 per cent in the report. When we take into account allowances to give a total cash figure, the pay movement is 1 per cent," he added.

"However, employers are increasingly looking to include more factors such as employee benefits in their analysis of reward packages. Perks such as annual leave tickets, children's education and healthcare all make up part of the total reward package and are becoming more prominent in the minds of employers and employees," he concluded. – TradeArabia News Service