Business Barbados

Over past few years there has been significant advancement in the strategic development and administration of compensation programmes in companies across Barbados. Many of the large progressive companies have sought to incorporate sound compensation design principles in the development of compensation programmes.

Notwithstanding the above, the components of a typical compensation package have not change significantly in the last decade but the mix of the components has changed.

Typical Components:

  1. Base Salary
  2. Variable Pay – bonus and incentive payments
  3. Cash Allowances – gas allowance, entertainment and travel allowance
  4. Benefits – contributory medical insurance plan and pension plan
  5. Perquisites – professional/club memberships, vehicle benefits and utilities

Base Salary

A standard base pay programme offers fixed salary ranges for each level of employees performing the standard duties of their jobs. Minimum and maximum levels have to be set up within those pay ranges to account for variations in experience and skill levels.

In Barbados, generally larger, well established companies have set base pay ranges for each job level/grade. Many small companies, unless it is a subsidiary of an international company, typically do not have set base pay ranges.

Typically, organisations increase salaries in line with collective bargaining agreements and these agreements are developed for 2-3 year periods. Pay increases are typically provided across-the-board.

Many progressive companies use a merit pay plan to progress the employee through their salary range at a performance-driven speed.

Non – unionised employees typically receive increases which are equal to and/ or above those received by the bargaining unit and are administered using quasi-merit systems.

In 2013, the average increase ranged from 3% to 5%. Some smaller companies have been conservative and not offered salary increases since 2010/2011. Given the current economic state, many companies may offer a minimal increase of 2% – 3% to cover the increase of cost of living.

Variable Pay

While it is traditional for companies in Barbados to offer a bonus, we have observed a shift from a bonus variable pay (traditionally a Christmas bonus) to true incentive pay. Incentive-based compensation is becoming common place due to the increased emphasis on performance and increased productivity.

Most companies in Barbados appear to have adopted performance sharing plans for their variable pay design. The awarding of bonus/incentive payments are based on individual performance, company (corporate, divisional) performance/ results and also varied by level or position in company.

The calculation of bonus/incentive payment varies by company.   Generally, incentive plan payouts vary by level:

  • Junior: 5% of base pay
  • Middle Management: 10% of base pay
  • Executives/Top Management: 20% of base pay

A small percentage of companies in Barbados offer long term incentives. These incentives typically are in the form of stocks options, purchase of company shares, etc.

Benefits

Annual leave

By law all employees receive three (3) weeks’ paid holiday after completion of one (1) year of service with the same employer and after five (5) years of service, four (4) weeks paid holiday is provided.

Highly competitive companies offer paid enhanced vacation over and the minimum required by law. It is common for these companies to offer employees at four (4) weeks’ vacation and Top Executives receive between five (5) or six (6) weeks’ vacation.

Insurance Benefits

The general market practice is to offer full health/medical insurance to all permanent full-time employees.  These plans include vision and dental coverage and have a group life insurance component.  Only a small number of companies offer disability insurance and dependent life insurance.

Pension Plan

The larger companies generally offer pension to their employees.   The market trend indicates companies moving away from the defined benefit pension plans to the defined contribution pension plans.

Employees contribute on average between 2% to 5%. The common practice is for the employer to match their contributions up to a maximum of 5%.

Housing Benefit

Most companies offer this benefit to expatriate employees and rarely to local employees. Companies administer this benefit by paying the rent directly to the landlord or by providing the employee with a housing allowance to cover part or the full cost of the rent.  The amount offered is dependent on the company policy, family size and job level. On average a housing allowance for a three person family is BB$5,000.  This benefit is taxable.

Perquisites

Vehicle Benefit

Trends indicate that companies are moving away from providing company vehicles due to the expenses relating to fleet management and instead provide a car allowance.

The amount of car allowance varies depending on the company size and job level of the employee.  Small to medium sized local companies that provide fully maintained company cars tend to offer this benefit to only top executives. While large organisations tend to offer this benefit to top management, executives and select middle management staff.

However, it is important to note that some positions require the use of a vehicle to allow the employee to function in that role.  In these instances, the company provides these employees with fully maintained vehicles.

The value, type and/or brand of vehicle will vary based on job level, for example; top management/executive employees are normally offered company vehicles valued over BB$100,000.  This car benefit is taxable.

Professional Subscriptions

Professional subscriptions are generally provided to employees based on their job and level within the organisation.  For example, accounting staff have to be members of ACCA, CGA, etc. and most companies would cover the annual membership fees.   Most companies do not have a set maximum and cover the full costs of the subscription/membership.

Club Memberships

Mostly medium to large companies offer club memberships relating to social activities such as gym, golf, yacht club, business and service clubs.  This perquisite tends to be offered to management level employees or executives and the company will generally cover the full cost but a few organisations would stipulate a maximum number of clubs or provide a cap or set amount for specific positions.

Educational Allowance

Most companies encourage their employees to continuously develop themselves; therefore companies would provide educational assistance by helping to cover the cost of work related courses of study. On average most companies seem to cover between 50% – 75% of the cost of the course.

Snapshot of Compensation & Benefits in the Local Market Barbados 2014

Information is displayed in local currency (BB$)

Information Systems Administrator

Assists with the management of the Company’s internal Microsoft Windows NT network and server.  Co-ordinates the information systems/information technology needs of the organisation, making recommendations for the improved efficiency of the end users.  Trouble-shoots network problems, ensuring minimum downtime and ensures that all equipment is functioning in an efficient manner. Provides training for staff in the use of various computer tools and software packages.  Assists in the design, implementation and production of management reports and designs and implements all software interfaces needed by the company. Coordinates the IT infrastructure and activities with internal and external IT Manager/Consultant.

AverageMedian
Base Salary$82,802$76,132
Total Cash Compensation
(Base Salary + Cash Allowances Only)
$84,985$77,559
Variable Pay$4,980

Administrative Assistant/Receptionist

Sorts and distributes incoming mail to areas and staff within the organisation and dispatches outgoing mail. Performs reception duties in an efficient, professional and courteous manner and communicates and liaises (verbally and in writing) with customers, visitors and staff. Prepares business letters, reports and memorandums. Adheres to procedures relating to the proper use and care of equipment and materials and manages, organises, updates and inputs relevant data. Manages the filing system and handles any other related duties as may be required to assist in the smooth functioning of the company’s departments.

AverageMedian
Base Salary$41,325$41,200
Total Cash Compensation
(Base Salary + Cash Allowances Only)
$42,914$43,260
Variable Pay$3,840

Office Manager

Analyses and organises office operations and procedures such as typing, filing and requisition of supplies. Coordinates the company’s purchasing, maintenance and services by directing the acquisition and maintenance of office equipment and machinery and by directing the purchase, storage and requisitioning of office supplies; is responsible for records maintenance, mail and messenger services. Evaluates office processes, revises procedures or devises new forms to improve efficiency of workflow. Formulates procedures for systematic retention, protection, retrieval, transfer and disposal of records. May be required to hire, train and supervise clerical staff. Coordinates other business activities associated with the efficient running of an office.

AverageMedian
Base Salary$78,958$74,366
Total Cash Compensation
(Base Salary + Cash Allowances Only)
$81,165$85,078
Variable Pay$6,558

Accountant

Responsible for the establishment and maintenance of a system of financial controls aimed at ensuring adherence to approved policies and procedures, safeguarding of assets and the timeliness, accuracy and completeness of the Company’s accounting records. Presentation of monthly, quarterly and annual financial statements and provides financial management support to the Financial Controller.

AverageMedian
Base Salary$96,266$102,897
Total Cash Compensation (Base Salary + Cash Allowances Only)$98,648$105,060
Variable Pay$14,660

Human Resources Officer

Assists with the implementation of the company’s HR management strategies in accordance with business needs. Provides technical support to the line Managers and other members of the HR team in the areas of recruitment, selection, orientation, training, industrial relations and employee data management.

Average
Base Salary$57,837
Total Cash Compensation
(Base Salary + Cash Allowances Only)
$62,389