Guyana’s economy has been continuously growing over the past decade, with an annual average of 4.7% from 2005 to 2013. Growth slowed down in 2014 and 2015 due to the collapse of commodity prices for Guyana’s major exports, sugar and gold. But with the support of public investment and rapid growth of gold production, the economy is projected to grow by around 4% in 2016 and 2017 and by 3.8% in the years beyond 2017. Despite this growth, the country is struggling with a pervasive trend – migration of the Guyanese labor force to nearby Caribbean Islands, seeking higher paying jobs.
Changes in labor market conditions and the struggling sugar industry have contributed to the increased movement of Guyanese workers to other Caribbean countries. Popular destinations include Barbados, Trinidad and Tobago, Antigua and the British Virgin Islands, where project-based jobs offering higher pay and better gratuities can be found.
Sugar is one of the leading industries in the country, generating about 20% of Guyana’s gross domestic product and the country’s largest employer. Guyana’s sugar industry closed 2016 with financial losses and is expected to continue to decline due to low prices on the global market.
Higher taxes are another factor driving labor migration. Effective January 1, 2017, a new income tax rate of 40% was introduced for those earning in excess of 2,160,000 GYD (about 10,500 USD) per year (a 28% rate applies below that level). This replaces the former flat rate of 30% for those earning over 660,000 GYD. For workers subject to the new 40% tax, this represents an increase of one-third in their marginal tax rate. In addition, the implementation of a 14% VAT for electricity and water bills are proving to be an additional burden for employees.
So how do compensation packages in Guyana compare to other markets in the Caribbean? Using data from the most recent Birches Group surveys effective October, 2016, we prepared a comparison of total compensation data across eleven Caribbean countries.
The median total compensation for a Working Level Professional (BG-10) in the region is 67,839 USD. Grenada has the lowest rate (45,605 USD), while Bermuda has the highest (177,920 USD), which sets the difference between the two countries at 290%. Guyana ranked third to the last and was observed to be only at the 20th percentile among the eleven Caribbean countries.
Barbados has the widest pay range of 73% while Curaçao, at 19%, had the narrowest one. After Barbados, Guyana has the next widest pay range, at 66%. A wider pay range indicates a greater amount of pay differentiation for positions with the same level of contribution.
“Pay Mix” is the combination of base salary together with non-base components of pay, such as fixed allowances, variable pay and in-kind benefits. There is a wide variation of practices within the Caribbean region.
Grenada and the Bahamas have the highest base pay percentage, with less than 5% non-base components. Trinidad and Tobago and the Dominican Republic have the highest percentages for non-base components of pay, over 20% of the total compensation.
While there may be several factors that compel employees in Guyana to look for opportunities in other Caribbean countries, it appears there are several locations with richer compensation packages. Of course, there could be other differences such as cost of living and taxes which could narrow the gap on a net basis. Employers in Guyana should pay careful attention to salary levels as competition for talent becomes more intense. Eventually, this will drive salaries higher in Guyana.
Birches Group surveys offers labor market data which helps employers in the Caribbean remain competitive in today’s vibrant and increasingly complex labor market. Our highly-trained analysts, global data coverage, and extensive database allows us to deliver comprehensive and consistent compensation data to our clients. We provide quality research and market analysis that show not just a singular data point but a whole salary range in the market with varying percentiles, and detailed benefits information accompanied by summaries and comparative tables.
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Thank you to the Birches Group Latin America/Caribbean team for their assistance in researching this article.