Strong increases in salaries and headcount growth can be expected in Bahrain over the coming few years, according to a new survey.

The second annual survey titled 'Employment Trends and Managing End of Service Benefits (EoSB) in the Middle East,' was published by US-based SEI, an outsourced fiduciary management investment service provider, said a report in the Gulf Daily News (GDN), our sister publication.

It revealed that growth in the region remains strong across a broad range of sectors with 86 per cent of respondent companies expecting headcount to grow over the next three years.

SEI Investments Middle East associate director Samer Abdel Kader told the GDN that accordingly, competition for talent and compensation look set to escalate which will lead to a rise in the cost of employment.

“Coupled with other cost increases, such as housing and schooling etc, an emerging theme is that of chief financial officers being put under pressure to manage the costs in order to maintain profitability through maximising dollar cost productivity of employees,” he said.

Kader feels in turn, this pressure has translated into human resources executives being challenged to find more innovative ways to recruit and retain top talent versus the historical approach of increasing base salaries and cash bonuses.

“Businesses are clearly under pressure to balance the pressure of growth and profitability.”

He said the survey found increasing awareness within the region of the risks associated with the traditional methods of managing EoSB, as well as greater recognition of the benefits the scheme it can offer.

However, the various tasks and components that need to be managed by an organisation using the 'do it yourself' approach can prove to be cumbersome and resource-intensive, Mr Kader said.

A solution which is prevalent in developed markets across the world is the appointment of a fiduciary manager to manage a scheme on the company's behalf.

Fiduciary management can enhance EoSB governance by allowing employers to assign discretion for all or some part of the scheme, such as investment implementation.

He said this allows employers to spend more time focusing on the important strategic issues.

A fiduciary manager can be responsible for providing risk management, asset allocation, implementation and oversight of the whole EoSB scheme.

“However, it is clear that a change in perception is underway as the survey shows there is greater awareness of EoSB liabilities and increased demand for an outsourced solution,” Kader said.

He said an area where Bahrain stood out was the higher level of interest in an enhanced EoSB/savings schemes solution.

The majority of Bahraini respondent companies, around 55 per cent, were interested in such a solution and of those, 56 per cent would consider outsourcing the entire scheme management to a third party, he added. - TradeArabia News Service