Affordability testing high salaries

Barbados is one of the top three paying countries in the region, alongside The Bahamas and St Kitts and Nevis, for people in executive and specialised roles in particular, a new regional study has found.

However, The Caribbean Salary Survey Report: PayPulse 2025 also concluded that average salaries for some professionals and managers in Barbados and seven other countries “fall short of covering basic monthly living expenses”.

PayPulse 2025, the fourth in the series of such surveys conducted by the Caribbean Society for Human Resource Professionals, in collaboration with CaribbeanJobs, now includes an Affordability Index.

With an affordability threshold of 100 per cent, the index “measures how well a salary covers basic living expenses – electricity, water, food, fuel, and housing – for a family of four”. Researchers divided average monthly salary by total monthly cost of living to calculate affordability.

The society’s director Rik James and deputy chairman Vaughn McDonald responded to questions on the research findings, in particular the findings on Barbados.

“Barbados falls in the ‘above market value’ category for most professional and managerial roles. The report identifies Barbados as one of the top three paying countries in the Caribbean, alongside The Bahamas and St Kitts and Nevis, particularly for executive and specialised positions,” they said.

“However, Barbados’ Affordability Index of 72.95 per cent reveals a critical nuance: while Barbados pays competitive salaries in absolute terms, these salaries fall short of covering basic living expenses by about 27 per cent.

“This means that despite paying above regional market value, Barbados faces a challenging affordability environment where the high cost of living diminishes the purchasing power of those competitive salaries.

‘Consistency across sectors’

“The report concludes that Barbados features ‘balanced salary distribution with competitive pay for professional and managerial roles’ while maintaining ‘consistency across sectors, with certain specialised roles commanding significant premiums’.”

In addition to Barbados, Aruba (54.26 per cent), Turks and Caicos Islands (58.49 per cent), St Lucia (61.34 per cent), St Vincent and the Grenadines (70.78 per cent), Montserrat ((87.44 per cent), St Kitts and Nevis (92.20 per cent), and Trinidad and Tobago (93.43 per cent) had “challenging affordability”.

“The main takeaway is that in eight Caribbean countries, the average salary is insufficient to cover basic monthly living expenses for a family of four,” James and McDonald said.

“These findings highlight a disconnect between compensation levels and the cost of living, indicating that salary reforms and strategic compensation adjustments are needed to ensure workers can maintain a reasonable standard of living.”

Belize (233.99 per cent), Guyana (138.63 per cent), and Grenada (136.56 per cent) were deemed to have high levels of affordability, while The Bahamas (118.87 per cent), Antigua and Barbuda (105.87 per cent), and Jamaica (103.95 per cent were in the moderate category.

They explained that the Affordability Index was introduced “to reveal the true purchasing power of salaries across Caribbean markets”.

“The report acknowledges that competitive compensation must be understood not just in absolute dollar terms, but in relation to the actual cost of living in each country,” James and McDonald noted.

The index measures how well a salary covers basic living expenses – electricity, water, food, fuel, and housing – for a family of four.

They explained: “This innovation addresses a critical gap – while two countries might report similar salaries, the real quality of life and financial comfort those salaries provide can differ dramatically based on local living costs.”

By introducing this metric, PayPulse 2025 gives employers and employees a more complete picture of compensation adequacy across the region.”

James and McDonald shared that 20 companies from Barbados participated in the survey.

206 participating organisations

The report describes Barbados as having “balanced salary distribution with competitive pay for professional and managerial roles” and maintaining “consistency across sectors”.

The society said there was a 48 per cent increase in regional participation for PayPulse 2025, which collected data from 206 participating organisations across 20 Caribbean countries, with the survey covering 137 job roles across 34 industries.

The publication said that the construction, architecture and property sector had 87.3 per cent of roles paying below market value – the highest rate among surveyed industries.

“The hospitality, tourism and catering sector shows 40.4 per cent of roles paying below market value – the lowest rate among surveyed industries. Industries with highest average salaries include human resources; banking, financial services and insurance; and hospitality, tourism and catering,” the report added. (SC)

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