Salaries in Bahrain are set to increase by 4.3 per cent next year, up from 3.8 per cent as companies have improved allowances and bonuses for their employees, said a report.

Bahraini employees tend to remain with their organisations longer than their counterparts in the GCC, according to latest pay forecast data by global management consultancy Hay Group.

"Organisations are becoming cautious about increasing fixed compensation and instead we see some movement in allowances and benefits," Hay Group regional director Vijay Gandhi was quoted as saying in a report published in our sister publication, the Gulf Daily News.

"Bahraini companies are wary of increasing fixed income but they are willing to share higher bonuses. Salaries are also in line with inflation, GDP growth and other economic indicators."

The corporate culture in Bahrain prompts greater retention of workforce. 'Job-hopping' is not a regular feature compared to Saudi Arabia or the UAE.

"The length of services in Bahrain is higher than other GCC countries," added Gandhi. "That is part of the culture and how employment is looked at in Bahrain, hence we see stronger and stable growth."

High levels of engagement, better work-life balance, freedom to contribute to decision- making and existing climate within a workforce are some of the factors contributing to greater retention.

"Pay is not the only factor keeping employees with their organisations in Bahrain," he said.

"Large employers have invested well and hence the emotional reward adds to the improved holistic picture of compensation," he added.

The labour market is set to be buoyant in Bahrain next year, as confidence has returned and expatriate employees, who form a large part of the workforce, are taking up jobs in the country.

"New financial firms have opened branches in Bahrain and we're seeing investments coming back as things have picked up," said Gandhi. "Employers will look for highly specialised talent."

Better leadership and training will be crucial to rewarding employees.

"There will be efforts to improve the total reward factor," he added. "In order to retain workforce, there needs to be good investment in employees."

The Middle East has seen a shift from traditional sources of labour such as India, Pakistan, Sri Lanka and the Philippines towards South America and Eastern Europe, according to the report.

The search for low-cost labour is no longer limited to low skill level positions.

Many foreign-born professionals educated in the West are returning to their home countries for work.

Hay Group's research is based on salary expectations of more than 20,000 reward specialists in 69 countries worldwide, representing 14 million employees. – TradeArabia News Service