Category: "Comp, Salary & Benefit"
China Southern to Cut Executive Pay 10% on Fuel Costs
July 23rd, 2008China Southern Airlines Co., the nation's largest carrier, will cut the pay of Chairman Liu Shaoyong and other executives by 10 percent from this month to help offset jet-fuel costs that have almost doubled in a year.
The move is part of a plan to save 1.3 billion yuan ($191 million) this year by cutting operating costs and infrastructure investments, the Guangzhou-based carrier said in an e-mailed statement last night.
China Southern, Air China Ltd. and China Eastern Airlines Corp. have raised surcharges and trimmed capacity to cope with rising fuel prices and slower travel growth. Higher fuel costs will boost China Southern's operating costs by 1.9 billion yuan this year, it said.
``The salary cuts are a symbolic move to show the management's efforts to reduce costs,'' said Yu Jianjun, an analyst at Huatai Securities Co. ``The carriers will do everything they can as jet-fuel prices have run out of control.''
Liu was paid 751,000 yuan ($110,000) last year, including pension contributions, according to the company's annual report. Tony Tyler, chief executive officer of Cathay Pacific Airways Ltd., got a total of HK$11 million ($1.4 million), including benefits and bonuses.
Qantas Airways Ltd. CEO Geoffrey Dixon said today Australia's largest airline will freeze executive pay and cut about 20 percent of management and head office support jobs to curb expenses. Qantas also said it will cut 1,500 jobs.
``It's rare for Chinese company officials to cut their own pay,'' Yu said. ``It's a clear gesture saying they're trying their best to cut costs.''
Surcharges
China Southern rose 8.7 percent to 8.16 yuan in Shanghai and fell 1.9 percent to HK$3.18 in Hong Kong. Both stocks have plunged more than 68 percent this year, amid concerns that rising fuel prices may damp earnings.
Jet fuel last year accounted for 35 percent of operating costs at China Southern and China Eastern. Fuel was 36 percent of Air China's costs.
China Southern raised surcharges on domestic flights as much as 50 percent on July 1 to help cover higher fuel prices. It also increased its levies on flights to Southeast Asia and other short-haul overseas destinations.
The Chinese government raised fuel prices 25 percent last month as part of a wider plan aimed at cutting energy consumption and cooling the nation's economy. Chinese carriers buy fuel for domestic services at a subsidized rate. They pay international market prices for overseas routes.
Jet kerosene traded at $166.15 a barrel in Singapore yesterday, down from a record $181.85 a barrel on July 3.
Shortage of talent pushes up salaries
July 18th, 2008EMPLOYERS on the Chinese mainland are facing the highest salary inflation in Asia due to the country's rising demand for professionals, according to a human resources report released in Shanghai yesterday.
Hudson Recruitment, a Nasdaq-listed headhunting firm, asked more than 2,600 multinational organizations on the Chinese mainland, Hong Kong, Japan and Singapore about their hiring intentions over the next three months.
Of the 708 respondents from the mainland, only 8 percent of employers said they could negotiate lower salaries for new managerial hires, the lowest proportion in Asia.
In Singapore, about 10 percent said they were able to negotiate. The figure was 11 percent in Japan and 13 percent in Hong Kong.
"The lowest figure in Asia indicates that employers have little scope to negotiate lower new hire salaries and salary inflation is the most prevalent issue for them," said Angie Eagan, Hudson's general manager in Shanghai.
"The Chinese mainland is still a talent-short market, the ongoing competition for strong candidates means that employers are not able to effectively combat the increases in asking salaries for new hires," Eagan said.
The mainland is the only region in Asia surveyed which reported an increased hiring expectation. The survey reported that about 55 percent employers were planning to add to their headcount in the next three months, compared with the 52 percent in the second quarter this year.
Expansion in the retail, tourism and hospitality segments and the approaching Beijing Olympics was driving the growth, analysts said.
Chinese employers are still suffering from the highest turnover rates, with 71 percent respondents in mainland and Hong Kong reporting an equal or even higher turnover rate over the past year.
Survey respondents said performance-related bonuses, training and development programs as well as substantial pay increases were the most effective measures companies could take to retain staff.
Workers urged to improve their negotiating abilities
July 2nd, 2008The Beijing municipal government has recently published the 2008 Enterprise Salary Guidance, which mandates that the average level of pay raises be kept at 11.5 percent.
The new guidance also sets the minimum pay raise level at an unprecedented 3.5 percent. Previously, it was maintained at a negative or zero percent.
An article in the China Youth Daily cites some experts who said the new guidance could help people combat continuous price increases if the new minimum pay raise level was fully implemented.
Although the Chinese government has made big efforts to bring down prices, the country's consumer price index kept rising over the first five months of this year.
Considering the continually rising prices of energy and food, the article says improving people's purchasing power could be the best way for them to maintain their livelihoods.
But the paper also says the new Guidance may not have much of an impact, because it is only a guiding policy, not an enforceable edict.
While the law guarantees only the standard minimum wage, enterprises ultimately decide whether or not to raise salaries for their employees.
The article suggests employees make concerted efforts to acquire equality in salary negotiations.
Beijing raises minimum salary amid rising prices
June 30th, 2008The Beijing government announced Friday a plan to raise the minimum salary by 10 percent, as well as to increase subsidies paid to families living below the poverty line to combat the jump in utility costs.
From July 1, the minimum salary for city employees will rise from 730 yuan ($106) to 800 yuan, or 4.6 yuan per hour.
The monthly allowance for families living under the poverty line will climb 60 yuan to 390 yuan, the sharpest increase in the past nine years.
Also increasing is the city's employment insurance, job-related injury insurance and pension.
The move aimed to offset price increases in rice, vegetable oil and pork, an unnamed Beijing Municipal Civil Affairs Bureau official was quoted by Beijing News.
Although China's consumer price index (CPI), a main gauge of inflation, eased to 7.7 percent in May with the falling food prices, about 45 percent of people polled in a central bank survey conducted nationwide in June still thought prices were "unacceptably high."
Pay high, but not through the nose
June 24th, 2008How much is too much?
If you talk to a Ping An Insurance shareholder, you are likely to be told the 66 million yuan ($9.45 million) pay package for its chairman Ma Mingzhe is way too much. An executive headhunter might have a completely different take, pointing out that top execs of 500 of the largest US companies averaged $12.8 million last year. As China gets increasingly integrated into the global economy, the headhunter will reason, such apparently exorbitant salaries for top management are only natural.
This year saw a flurry of angry postings on Chinese websites by shareholders incensed at what they felt were obscenely high salaries for those running their companies. Not just Ma, the pre-tax package of three Ping An executives was over 45 million yuan each while that for another five was over 10 million yuan.
Shareholders of five domestic banks fumed at the pay disclosures that showed Shenzhen Development Bank Chairman Frank Newman's pre-tax income rose to 22.9 million yuan in 2007 from 9.95 million yuan the previous year. That of China Minsheng Banking Corp President Dong Wenbiao surged to 17.5 million yuan compared with 4.5 million in 2006.
The annual reports of all 14 Shanghai-listed banks have also shown substantial raises for top managers. Employees complain the fruits of the 71.8 percent average profit rise in these banks last year were mostly devoured by the top bosses. While the banks' average pay has spiraled, they say it's mainly because top executives' salaries have risen steeply, with no dramatic advances in salaries of the rank and file.
In the case of Ping An, particularly, what rankled with shareholders was that executive pay skyrocketed even as the company's shares plummeted. Ping An shares fell from a peak of nearly 150 yuan in October to around 50 yuan in April. In a Sina.com survey, 93 percent of the respondents thus understandably said they did not approve of the company's executive pay practices.
The controversy also comes amid widespread concern about rising income disparity in China. But executive pay is hardly an issue restricted to a socialist state used to egalitarian wages trying to come to grips with the rewards of individualism that capitalism institutes. The United States, the high priest of modern-day capitalism, has been similarly tormented by the vagaries of executive pay.
Individual shareholders and institutional investors alike have been campaigning this year for a "say on pay" at nearly 100 of the top US companies including Citigroup, Coca-Cola, Exxon Mobil, General Electric and Wal-Mart. The demand: a provision to allow shareholders to vote on top executives' pay.
Across the Atlantic, where many countries have already institutionalized shareholders' say on pay, a chunk of GlaxoSmithKline, Shell and HSBC investors refused to vote for the pay proposal for top bosses.
Both in the US and Europe, the issue has transcended the business sphere to become a hot-button political issue. EU finance ministers recently called excessive executive pay a "social scourge", blaming it for unwarranted risk-taking causing the financial turmoil. In the US, presidential candidate Barack Obama has been railing against corporate fat cats and backing the demand for shareholder say in executive pay.
In Searching for a Corporate Savior: The Irrational Quest for Charismatic CEOs, Harvard professor Rakesh Khurana explains how the opacity of the process of hiring external CEOs and the misplaced priorities thereof - such as picking someone with "star power" rather than one with real knowledge of the industry - leads to excessive CEO compensation. As China sets about aligning its business practices with the industrialized West, it would do well to avoid such pitfalls.
But excessive restrictions on executive pay might at the same time weigh down the country in the quest for global talents, thus undermining its competitiveness. Institutional checks and balances like encouraging shareholder activism are a much safer bet. Moderation in policy must never be lost sight of in the pursuit of moderation in pay.
Unemployment rate plummets
May 21st, 2008HONG Kong's unemployment rate unexpectedly fell to 3.3 percent, matching the lowest in a decade, helping to boost consumer spending and sustain growth in the city as global demand fades.
The seasonally adjusted jobless rate was for the three months ended April, the government said yesterday on its Website. Economists surveyed by Bloomberg News had expected the rate to stay at 3.4 percent.
An improved labor market, lower interest rates and tax relief may support domestic household consumption and shield the city from weaker overseas demand.
"Export, visitor and capital flows from Chinese mainland have created most of the jobs for Hong Kong in the past few years," said Kevin Lai, senior economist at Daiwa Institute of Research in Hong Kong. "Domestic demand will remain robust amid a solid labor sector, negative real interest rates and fiscal stimulus."
Deutsche Bank AG, Germany's largest bank, plans to triple its office capacity in Hong Kong by 2010. The expansion will allow employing as many as 4,000 workers, up from 1,500 currently, the company said on May 6.
Last month's jobless rate matched February's as the lowest in 10 years. The government calculates Hong Kong's unemployment on a rolling three-month basis to smooth out seasonal factors.
Hong Kong's economy grew 7.1 percent in the first quarter from a year earlier, the fastest pace in two years. Household spending jumped 7.9 percent.
Rising incomes are spurring consumption. The average wage rose 2.7 percent in December from a year earlier.
The increase in wages may also escalate inflation as companies pass on higher labor costs to buyers.
President of China Minsheng Bank tops banking sector income chart
May 14th, 2008Annual reports from several Chinese banks over the weekend reveal sky-high salaries for the senior management boards in China's banking sector. China Minsheng Banking Corporation stands out with the highest paycheck.
Dong WenBiao, the president of China Minsheng Bank, tops the income chart. His annual pre-tax salary reached over 17.5 million yuan last year.
China Merchants Bank is also being generous to senior executives. In 2007, it doled out 53 million yuan to 26 board members and executives, and its CEO, Guan MaWei, earned nearly 10-million yuan pre-tax.
The Industrial bank paid out nearly 16-million yuan to 15 board members and executives. And its president, Gao JianPing, earned nearly 3 million yuan.
China officials hike wages, threatening boost to inflation: economists
May 9th, 2008South China's Guangdong province is the latest area in the nation to unveil plans to raise wages, state media said Wednesday, a move economists worry runs counter to efforts to rein in inflation.
Guangdong provincial labour authorities said in a 2008 plan that they aimed to establish a regular salary increase system and raise wages of all employees in the region by 12 percent or more this year, the China Youth Daily reported.
Other areas in China have announced similar polices, including the financial hub of Shanghai, where a salary rise guideline for this year has called on companies to lift employee wages by five to 16 percent.
This is meant to help households, especially low-income families, cope with the country's surging inflation, which has fuelled government fears of potential social unrest.
China's consumer price index rose 8.0 percent in the first quarter of the year. In February, it climbed to 8.7 percent, the highest in nearly 12 years, before easing slightly to 8.3 percent in March.
But analysts have voiced concern that salary hikes risk exacerbating the inflation problem that they are supposed to alleviate.
"Salary rises are certainly contributing to inflation," said Chen Xingdong, an economist with BNP Paribas in Beijing.
If companies are told to pay higher wages, they may have to raise their prices to stay out of the red, the economists argued, warning this could be the beginning of a vicious cycle.
"The problem will get worse if salaries and price rises take turns," said Ma Qing, a Beijing-based analyst with the think tank CEB Monitor Group.
They argued that it could also add an extra burden on companies that are already under big pressure of soaring upstream raw material prices and might even put them out of business.
"If the requirement goes beyond what companies can afford and therefore forces them to cut jobs or stop production, then the losses may be bigger than the gains," said Shen Minggao with Citigroup.
The Chinese government has signalled growing concern about the ways in which rising prices might adversely affect the poorest in society.
Since January, it has resorted to freezing price hikes on key consumer items like grain, edible oil, meat, milk and liquefied petroleum gas in order to keep them affordable for most families.
Wage rises may be meant to do the same, but economists warned they could actually lead to more social tensions by widening income disparities.
This is because wage rises by decree are likely to benefit mainly government employees, while blue-collar workers in private companies may get left behind.
"I doubt who will benefit from a policy where the government directs salary increases," CEB Monitor Group's Ma said.
"In the final analysis, I think it will only raise government employees' wages. This is what happened in 2006 and 2007."
CEOs roll in moolah as China's salaries soar
May 5th, 2008SALARIES are soaring for top executives in China's listed companies, especially in the financial sector, according to recently released annual reports.
Shenzhen-based China Ping An insurance company pays the most of all A-share companies to its top executives, according to the Shenzhen Daily.
Ping An augmented its top executives' paychecks by 122 percent, to 282 million yuan (US$40 million), or 1.47 percent of the company's net profit last year.
At the same time, the company posted a 140 percent rise in net profits.
As a result, Ma Mingzhe, chairman of Ping An; Louis Cheung, Ping An's president and CFO; and Dominic Leung, Ping An's CEO, each earned more than 25 million yuan after taxes in 2007.
The average income of Chinese citizens is rising too, although not as fast.
According to the National Bureau of Statistics, the disposable income per capita for Chinese urbanites was 13,796 yuan in 2007, an increase of 17.2 percent over 2006, the biggest rise in six years.
If the current rate of increase continues, salaries in cities will double in four to five years.
Salaries increased 9.6 percent for managers and 9.1 percent for supervisor/senior professionals in the non-manufacturing sector in Shanghai in 2007, in contrast to 8.2 percent and 8.1 percent respectively in 2006. That's according to the 2007 Shanghai Local Compensation and Benefits Total Compensation Measurement Report, conducted by Hewitt Associates on mainly Shanghai-area foreign-invested firms.
Another trend is the salary increase in second-tier cities in the Yangtze River Delta, with Shanghai manufacturing at 8.5 percent, Suzhou 8.8 percent, Wuxi 9.2 percent and Changzhou 10.2 percent.
In an interview with China Knowledge@Wharton, Michael Song, head of Hewitt's compensation and benefits consulting practice, said the average salary increase in Hewitt-surveyed companies was 8.7 percent across China.
Companies were also asked how they were reacting to the ever-climbing CPI. Fifty percent of the 300 surveyed companies said they have factored CPI into their 2008 budgets.
A human resource manager at a US Fortune 500 company, who asked not to be named, said the salary increase rate at his company closely follows that of similar Fortune 500 companies.
"If our pay is above the market level, that will impose big pressures on labor costs. And ... even if you are above the average level, your turnover rate will not necessarily come down. However, if your pay rise is lower than the market level, even by a few percentage points, you will see the turnover rate going up. "
Song acknowledged that the pay increase rate varies atn different levels within the same company. "The higher the level goes, the faster the pay grows," he said.
The cited Hewitt survey says in the Shanghai city manufacturing sector over the last three years the compound growth rate of salaries has increased to 54.5 percent for the top management level while it is only at 14.1 percent for manual workers.
Meanwhile, Song pointed out the entry level salary for new college graduates has recently stabilized at around 3,000 yuan per month in Shanghai, although some outstanding graduates from top universities in China could earn 5,000-7,000 yuan.
Oversupply might account for the stagnant entry-level salary. There are too many fresh graduates every year, and most likely, they don't possess the right skills that companies seek, Song noted.
High turnover rates
The biggest salary increase last year was in the finance and investment sector, especially the funds industry, said Song.
Increasing labor costs are posing challenges to companies' margins.
However, even if companies continuously improve compensation and benefits levels, employee turnover rate shows no sign of decline.
The Hewitt study confirmed that turnover rates are still rising across most sectors, with average rates increasing from 8.3 percent in 2001 to 14.7 percent in 2007.
Some cities and industries see even higher turnover rates, said Song. The main reason is the gap between supply and demand, he said, pointing to the fast-growing economy in China as the fundamental cause of the gap.
"Most enterprises are continuously expanding. Last year, there was an average 10-20 percent increase (in company work forces). When companies are expanding, the whole market is recruiting but supply is not catching up fast enough. Demand for certain functions, like sales and marketing, is even bigger."
Kang Lan, client partner in the Shanghai office of Korn Ferry, the international executive search company, said: "For a function like marketing, which is relatively new in China, there was not much talent accumulation."
Ever-increasing pay hikes pose a significant problem for most organizations.
Salary top reason why employees quit
May 4th, 2008SINGAPORE: The top reason why employees in Asia quit is unhappiness with their pay, a study by a human resources firm said on Saturday.
It found 70 percent of the best employers see a large connection between improved performance and higher salaries.
While Asian employers have "increased investment" in compensation, they are not yet getting the "strategic and financial results"; The Business Times quoted Hewitt Associates principal Nishchae Suri as saying.
In China, 71 percent of employees are unhappy with their pay, 51 percent are unsatisfied in Hong Kong, 44 percent in India, 73 percent in Japan and 42 percent in Singapore, the published survey said.
Good news! Salaries to rise by 14.4%
April 29th, 2008The explosive rate of growth in India has created a phenomenal demand for talent leading to higher salaries. Salaries are forecast to rise by 14.4 per cent during the year 2008, says a latest report.
"Wages are forecast to rise by 14.4 per cent during 2008, the fifth successive year of double-digit growth. This far outstrips wage inflation in China (8.6 per cent in 2007) and is second only to Sri Lanka, where wage growth has been driven by high inflation," global management consultancy firm HayGroup said.
The high level of demand for experienced employees is driving wage inflation and creating a culture of job-hopping. Staff turnover of 20 per cent or more is not unusual in high-demand sectors such as the service industry, as talented workers jump from employer to employer, following the promise of even higher wages.
"Reward programs of companies are in crisis as wage inflation is witnessing an upward spiralling and staff turnover rates hit new highs," the HR consultancy firm said.
"In an environment where employees can achieve a pay rise of between 40 per cent and 50 per cent by moving to a competitor, they are unlikely to stay put," HayGroup added.
In the year 2007, the middle management level witnessed the maximum increase in average annual base salary (16 per cent), while supervisory, senior management and the executive level had an average annual increase of 14 per cent in their base salaries.
The least percentage of increase was witnessed in case of the clerical staff which saw an increase of only 12 per cent in their base salaries, the report added.
India which has earned a reputation as a source of keen, talented, educated and English-speaking employees, particularly in the IT and service sectors is rapidly witnessing a change in its perception.
"While there is no shortage of graduates in India, there is real concern about the quality of new recruits," the report said, adding that the country's universities produce three million graduates a year but only a fraction are considered suitable for employment in the business processing and IT outsourcing industries. One of the main reason behind this wage inflation is the faulty education system prevailing in the country.
According to the National Association of Software and Service Companies (Nasscom), only around 25 per cent of engineering graduates and 15 per cent of general college graduates are considered employable.
Nasscom believes that the IT sector would face a talent shortfall of 5,00,000 by 2010, which would seriously compromise India's position in the offshore IT services industry.
The education system in India is fragmented. For example, all Indian engineering schools are not uniformly endowed with infrastructure or faculty, the report said.
On one hand world class institutions like the Indian Institute of Technologies (IITs) and National Institute of Technologies (NITs) have a global brand image for the kind of people they produce but at the same time they co-exist with private-run engineering colleges which are devoid of both proper equipment and trained faculty, the report added.
Most Asians quit over salary issues
April 28th, 2008Unhappiness over salary is the most important reason for an employee to switch jobs in Asia, a study by a global human resources firm, Hewitt, said on Saturday.
Hewitt Associates' principal Nishchae Suri said in a presentation on the subject that 70% employees of the best employers see a large correlation between improved performance and high salaries. He said companies are steadily increasing their competitive standing while giving compensation to retain and attract high quality talent.
Seventy three per cent of the employees in Japan, 71% in China, 51% in Hong Kong, 44% in India and 42% in Singapore are unhappy with their pay, the published survey said. Dissatisfaction with compensation averages 54% for Asia as a whole, it reveals.
Pay must not only be fair, but seen to be fair in terms of the job and compared to the pay of other employees, Suri says.
Chinese Bankers Close Pay Gap With S.Koreans
April 25th, 2008It won't be long before Chinese bank workers make more than their South Korean counterparts in terms of average annual salary.
The Beijing Times on Thursday released a report on the average annual salaries of employees in 14 Chinese banks in 2007. According to the report, China's best-paid bank employees work at Shanghai Pudong Development Bank, where the average annual salary is 366,700 yuan, or roughly W55 million (US$1=W997).
That's very close to the average annual salary of South Korean bank workers, which is W64 million. Even South Korea's best-paid bank workers -- at the Korea Development Bank -- make only W76 million per year on average.
And in terms of real purchasing power, Chinese bank workers make far more than their South Korean counterparts. According to the U.S. CIA Factbook, measured on a purchasing power parity (PPP) basis, Chinese workers actually earn about double the amount of their income as figured in U.S. dollars by the nominal yuan-dollar exchange rate.
According to this standard, the average annual salary of Shanghai Pudong Development Bank employees in 2007 was more than W110 million, much more than that of South Korea's KDB employees.
According to the Beijing Times report, China's next best-paying bank was CITIC Bank (average annual salary of 242,200 yuan, W36.33 million), followed by China Minsheng Bank (231,800 yuan, W34.77 million).
Graduates prefer hukou over high salary
April 22nd, 2008In a survey by China Youth Daily last week, 67.8 percent believe a Beijing hukou or registered permanent residence is worth at least 100,000 yuan. Some 14.6 percent thought it should be worth 200,000 yuan.
A questionnaire asked 3,000 fresh graduates if they were given the choice of an annual salary of 100,000 yuan or Beijing Hukou, most chose the latter.
The hukou system is the central government's method of managing urban population. Registered permanent residence allows people to live, work and study in a specific city, but makes living in another city difficult.
In the survey, 77.1 percent said they would choose a job if the offer included applying for hukou; while 11.1 percent considered the hukou the deciding factor. In an online forum among students at Peking University, one student said a Beijing Hukou is worth about 100,000 to 200,000 yuan, making getting the residence permit even more crucial for those whose monthly salary are 2,000 to 3,000 yuan. But for a person with a high monthly salary of over 20,000 yuan, getting a hukou is not an issue.
"I will choose getting a hukou over a high salary," said a graduate student in Renmin University. “I have lived in Beijing for seven years. I have a sense of belonging to here.” She said she'd rather seize the chance to get a hukou than have a higher salary.
In the survey, 38.9 percent thought having a hukou will give them a sense of security and belonging. Graduates and students generally consider the Beijing hukou an important qualification in finding a spouse. "I will find a boyfriend with a Beijing Hukou, as long term, it help me avoid many worries."
A hukou is valuable because it is tied to many social benefits. “With a Beijing Hukou, you can buy affordable housing and apply for public accumulation funds for housing, enjoy relatively high endowment insurance, and your child will have a wider chance to enter a good university with a relatively lower score," A participant in the survey said.
In 1953, the central government began imposing limits on free migration to the cities to relieve the pressure of population growth and employment in urban areas. In 1984, the State Council implemented a rule which allowed some residents in countryside who had stable job in city to apply for a permanent urban residence permit.
But now the public hopes the hukou system will be reformed, and it was the focus of the NPC and CPPCC sessions. A participant in the survey said, "The talk about reforming the hukou blossoms every year in two sessions, but we are still waiting for its fruit."
China Rising – Salaries & Hiring
April 18th, 2008From the point of view of a HR department in China you could just as easily be looking at the rise of salaries. But if you want a visual illustration as to why there is a War for Talent in China, this video comparison of exports in Asia over the past 14 years is just the job.
You can actually see China rising up like a Goliath, and dwarfing the other countries in the region.
This export increase is mirrored by the rise in China's Gross Domestic Product (GDP) which has been kept above 8-9% for about 20 years. Not too shabby, eh?
Inevitably there has been a lag in skills development, and as a consequence China's salaries are rising at about 16% per year on average. This is coming off an internal company awarded rise of about 9-10%, and a job change rise that ranges from 20% to 30%. For in-demand positions this can reach 100%.
(Note that the average city professional changes job every 18 months, according to Hewitt.)
City Salaries
The average annual salary for both professional and non-professional staff in China's cities is now about RMB 25,000 and at current rates equals roughly US$3,500. (By the time you read this it may be worth more dollars). According the National Bureau of Statistics this is an increase of 18 percent over 2006. It is also the biggest rise in six years.
Previous increases amount to 'only' 14% per annum, and at a compound rate of interest this means that in slightly less than six years the average salary in China's cities doubled. Tell that to your average European and he is likely to suffer a little Shock and Awe. Shock that salaries could be increasing so highly somewhere else in the world, and Awe at the size of increases and the rate at which China is catching up on the 1st World. But this would be tempered by a small degree of hope because each percentage salary increase lowers the possibility of further outsourcing of European jobs to China.
If the current rate of increase were to continue, salaries in Chinese cities would double in less than five years. Luckily, this is not a likely scenario, and the dark clouds of the world's economic troubles lead to a silver lining of lessening salary pressures in China. Please don't ask me to enumerate 'lessening'.
The details from NBS provides a little more insight into regional variations. The highest salary is to be found in Beijing which might come as a surprise to newly arrived foreigners, or business visitors, who see much higher levels of development in Shanghai, Shenzhen and Guangzhou.
These three locations would appear to have the strongest need for staff, and by implication be willing to pay the highest salaries. But these three cities are much more attractive and open than Beijing, so they end up with lower average salaries.
Information Lack
The NBS also note that the average salary in China shows a wide distribution of values, not just between cities but also between industries. They cite a lack of market forces but I would approach this from the point of view of information.
Put simply, there is not enough information around to help candidates and employers make rational hiring decisions. Candidates don't know how much to ask for, and companies are desperate to hire so they can be very flexible on salaries for the right person.
Meanwhile, for non-critical positions, companies must maintain internal pay equity so they are very motivated to keep salaries in these positions as low as possible. This results in somewhat schizophrenic hiring, and widely diverging salaries; even for the same job.
The fact that companies do not set pay ranges for jobs also leads to a more dynamic salary negotiation between potential employees and HR departments. The agreed salary figure is more closely linked to candidate/HR negotiation skills than is it to the requirements and key performance indicators in the Job Description. Those who push for more often get it.
Business Strategies: staff costs rising rapidly, says survey
April 15th, 2008A survey by accountants Grant Thornton says that businesses are seeing rapidly rising staff costs, particularly in emerging economies.
As the cost and availability of funding becomes an increasing problem for businesses, the cost of attracting and retaining staff is also increasing. This is leading to a cash squeeze on businesses.
The staff costs are most acutely felt in countries which have historically had low salary costs. Skilled and executive workers are demanding, and getting, more as companies grow. Alex MacBeath, global leader for privately held businesses at Grant Thornton International says, "Significantly, it is the emerging economies that are being hardest hit by increased staff costs. This is real evidence that the era of downward pressure on inflation in emerging economies is coming to an end."
The survey found that 59 per cent of privately held businesses (Grant Thornton calls them PHBs) are more focused on finding and retaining employees than they were a year ago. Emerging economies were most focused with Vietnam top with 84 per cent of businesses more focused, followed closely by mainland China (81 per cent).
Laurie Kalman, executive director, HR strategy for Grant Thornton International adds, "Retaining the right employees is important to the long term success of any business but is particularly critical for PHBs. Recruitment is an expensive process and an organisation that continuously hires while losing talent internally will not be able to prosper and grow."
It is these privately held businesses - where staff may see their prospects as limited compared to public and / or multinational companies - that are seeing the pressures most, says Grant Thornton.
So, why do staff leave? The most common reason, the firm says in its report, is staff who are resistant to increased workload. 41% of companies in the global survey gave this as a reason.
The issue leaves PHBs in a cleft stick - unable to retain and recruit the best staff companies face "increased operating costs, loss of business and a drop in customer service standards."
This leads to companies focussing more of their time and resources on recruiting and retaining staff. Also, culture appears to play a part. Where mobility of labour is traditionally low, companies place a lower priority on these strategies.
There is a correlation of sorts with the countries that reported increased staff costs. 91% of respondents in Mainland China said they were seeing increases, whilst just 17% did in Japan.
The survey does not, however, correlate these figures with inflation and interest rates and, in those, China and Japan are also at opposite ends of the scale.
Perhaps surprisingly, New Zealand comes very high in the list with 79% but the really big surprise is Botswana with 86%.
At the other end of the scale are the US and the UK with 48 and 47% respectively. Both of these economies are expected to suffer from recessionary pressures and already in the US, there are reports of people having trouble finding work in the professional and commercial sectors. Sitting at the middway point in the table are Germany, Hong Kong, the Philippines and Russia. Almost alone amongst south east Asian economies in reporing a low figure (45%) was Thailand.
Executive Pay Hits China's Radar
April 13th, 2008During my two-hour-long interview with a senior Chinese banker recently, we covered a lot of topics, from the credit crisis in the U.S. to the emergence of consumerism in China. He was unusually open for a Chinese executive. But when I asked about his multi-million yuan ($1 is about seven yuan) compensation last year, he fell silent.
If you think executive pay is a controversial topic in the U.S., or that the tension between highly-paid CEOs and shareholders is high here, you should see China. Publicly-traded Chinese companies didn't start disclosing executive-pay information until a couple of years ago, and it instantly became an explosive topic in proxy seasons. Many Chinese raised questions such as, "What do they base their pay on?" and "How could they make more than the state chairman?"
The senior banker said he would be more than happy if his name weren't associated with the topic. On the one hand, he explained, top executives at public companies do make a lot more than executives at state-owned enterprises and government officials, not to mention the majority of ordinary Chinese. On the other hand, he said, people like him are make far less than their counterparts on Wall Street and in Hong Kong. To attract and retain talented people who are increasingly moving around globally, public Chinese companies need to offer comparable salaries and bonuses. So the pay of executives like him are more or less a compromise between China's reality and market competition.
"But how can I say this to those who make very little?" he asked. "They won't understand, and I don't expect them to understand."
I see his point. I can't imagine China going back to the egalitarian society that we escaped 30 years ago, in which everybody received a salary based on their educational background and seniority, instead of their capabilities and achievements. Few people will work hard unless they know they will be rewarded, whether that reward is a bonus for a banker, power for a politician or a harvest for a farmer. That's simply human nature, and China's economic growth in the past three decades is the best evidence of it.
But I also understand why the unemployed, the middle class and lowly-paid government officials get angry at what they see as astronomical pay. The average annual income of urban workers in China last year was 24,932 yuan ($3,561), according to the National Bureau of State Statistics. Farmers and migrant workers make far less than that. Meanwhile, Shenzhen Development Bank Chairman and Chief Executive Frank Newman made roughly 23 million yuan ($3.3 million) in 2007, about 922 times the average urban pay [in an earlier version of this column, I mistakenly said 92 times], and Ping An Insurance Co. Chairman Ma Mingzhe made more than 66 million yuan ($9.3 million), or 2,647 times a regular worker's pay. (He donated 20 million yuan to a charity.)
The executive-compensation figures have triggered a public backlash. In an online vote on Sina.com, one of China's top portals, 93% of voters disapproved of the executive-pay practices at Ping An and Shenzhen Development Bank.
Mr. Ma of Ping An has also been made a villain in Internet chat rooms and on online forums since his pay information became public late last month. "Is the 66 Million Yuan Pay an April Fool's Joke?" demands a post on the popular online forum Tianya.cn. Last week, 1,055 car owners petitioned the China Insurance Regulatory Commission to investigate Ping An's executive-pay practices. They also asked the regulator to find out how much of the obligatory car-accident insurance fees they paid went to Ping An's executive compensation. The petition has been cheered on by Internet posters, with a 7,000-word-long post depicting Mr. Ma and Ping An's rise to fortune widely circulated between forums. The article includes many unverified details, and allegations that Mr. Ma used connections with powerful people to become one of the wealthiest people in China.
More importantly, some state-controlled public companies rely on monopolies and preferential government policies for their profits, so there's an understandable debate about whether these firms' government-appointed executives should get paid handsomely -- and if their compensation should be linked to those "guaranteed" profits.
Ping An and Shenzhen Development Bank are no longer state-controlled, although they were started with funding from local governments. But CEOs at state-controlled mega-banks, such as Bank of China, Industrial and Commercial Bank of China and Construction Bank of China, are appointed by the government, and their positions are equivalent to vice ministers. Some company leaders have been called back to work as government officials. The Chinese government doesn't disclose income for its officials, but vice ministers are believed to make less than 10,000 yuan a month (although they do get other benefits, such as housing and drivers). All CEOs at the nine publicly-traded banks received more than one million yuan in compensation in 2006.
As these banks are getting better at disclosing information about their executive pay, they also need to answer the questions raised on online forums again and again: Do these officials deserve more than 10 times their government pay once they are appointed as CEOs of public companies? Do they have the managerial talent to be retained with shareholders' money? Is their loyalty to the government, or to their shareholders? If some of the bank's income comes from its monopoly position and preferential government policies, should the CEO be rewarded for that?
There are no easy answers to these questions: While the U.S. and other industrial countries have been debating executive pay for many years, China has just started the discussion -- and has to conduct it against the backdrop of a complex asset structure and political system. But it seems that the Chinese public is determined to ask these tough questions every proxy season. And that in itself is encouraging.
Write to Li Yuan at li.yuan@wsj.com.
China's Labor Advances May Affect U.S. Prices
April 13th, 2008As Chinese workers gain more power and employment choices, the country's economy has had to adjust. And these changes may soon impact prices on goods in America. Host Steve Inskeep talks with NPR's Frank Langfitt and Alexandra Harney, author of The China Price, about what the future may hold for the world economy.
In recent years Chinese workers gained leverage due to an unanticipated labor shortage, Langfitt says.
"This gave more workers a lot more power vis-a-vis management," he says, adding that while people were desperate to have jobs in the '90s, today they may walk out of a factory if they don't like their job or the working conditions.
This shift in power has led to increased costs for Chinese manufacturers.
"China used to be so cheap they were unbeatable," Harney says. "The China price was the cheapest price you could get for anything around the world, but now that China is becoming more expensive, thousands of factories are starting to close down in Southern China."
As a result, Harney says, American companies will start paying more for goods they buy from China.
"I think that we are going to start seeing more and more of this show up on American price tags this year and next year," she says. "Some retailers and importers are telling me that they are already starting to have to raise the prices in the U.S."
Report: Financial jobs get highest pay in China
April 7th, 2008BEIJING, April 7 -- Chinese graduates engaged in the financial industry were the best paid last year, according to ChinaHR.com, the country's leading job-hunting Web site.
The financial industry tops the best paid list for university graduates, with an average annual income of 58,388 yuan (8,322 U.S. dollars) in 2007, followed by the IT and the medical industries. Insiders say that although the phenomenon is linked to last year's stock market boom, it largely stems from the financial and information industry's traditional place as high-salaried industries.
According to the report's regional breakdown, the annual income for Shanghai graduates fell to 37,007 yuan (5,275 dollars) in 2007, but this was not enough to topple Shanghai from the number one spot for high paying cities, followed by Beijing, Shenzhen and Guangzhou.
Salaries for graduates from junior colleges sustained a marked decline from 2006 to 2007, decreasing by 23.86 percent. On the up side, salaries for graduates with doctor's degree rose by 18.93 percent. Analysts say that the increasing corporate demand for doctoral graduates has driven the increase in salary.
Average salary increase of urban workers rises to six-year high
April 3rd, 2008Sound corporate performances and raised lowest salary levels lifted the average salary of China's employees working in cities and towns approach 25,000 yuan (3,561.3 U.S. dollars) in 2007, up 18.72 percent over the previous year, the biggest rise in the past six years.
According to the year's No. 1 statement released by the National Bureau of Statistics (NBS) on Tuesday, the average salary increase hovered around 14 percent from 2001 to 2006. The 2007 average salary of urban workers was 24,932 yuan and the daily average was 99.31 yuan (14.15 U.S. dollars). Taking into account price rises, the average salary increase hit a six-year-high.
The average salary comprises the basic wage, bonus and all allowances and subsidies. It is often used as a reference by the government for nailing down the lowest salary standards and calculating social insurance premiums.
Analysts attributed the rise to strong corporate revenues and raised lowest salary levels across the nation.
According to statistics available, large state-owned enterprises chalked up an accumulative profit up to 2.3 trillion yuan (327.6 billion U.S. dollars) from January to November last year, up 36.7 percent over the corresponding period of 2006. Private enterprises enjoyed an even larger profit growth of 50.9 percent.
The average of the nation's lowest salary standards, which vary between provinces, rose by 30 to 64 percent in 2006 from two years earlier.
Last year, the average salary in Beijing reached 39,867 yuan (5,679.1 U.S. dollars), trailing those in Shanghai, Guangzhou and Shenzhen which all exceeded 30,000 (4,273.5 U.S. dollars).
Salary gaps still existed. In Beijing, people working in industries such as securities, banking and air transport obtained more than 100,000 yuan (14,245 U.S. dollars). While workers in the textile and agriculture industries had less than 20,000 yuan (2,849 U.S. dollars).
Even in the same industry, salaries are widely divergent. For instance, the highest average salary of employees in Beijing's securities companies exceeded one million yuan (142,450 U.S. dollars) while the lowest was less than 40,000 yuan (5,698 U.S. dollars).
Analysts said the nation's average salary pattern among industries was similar to that of developed countries. Transfer of human resources promoted by market forces would help reduce salary gaps but the current corporate governance and personnel management policies had crippled the market's role.
Lowest earners get 14% rise
March 26th, 2008The Shanghai municipal government yesterday announced a 14-percent increase to the minimum wage in a bid to help those on low incomes better cope with the rising cost of living.
The monthly rate will be increased from 840 yuan ($120) to 960 yuan, with effect from Tuesday.
This is the second increase in five months in Shanghai, whose minimum wage is now the highest in the country.
"Inflation has had a big impact on people on low incomes in Shanghai," Bao Danru, director of the municipal labor and social security bureau, said.
"That's why we have introduced the largest increase for several years."
Shanghai's unemployed will also get up to 70 yuan more a month, taking the average payment to between 410 yuan and 550 yuan. The actual amount depends on the person's age and number of unemployment insurance contributions they have paid, Bao said.
City dwellers living below the poverty line, or unable to work, will be given an additional 50 yuan a month, he said. Government aid for people in urban areas will rise from 350 yuan to 400 yuan a month, while non-urban dwellers will get 3,200 yuan per year, up from 2,800 yuan.
Currently, 339,400 people who work in the city and 118,300 non-urban workers receive aid from the Shanghai government, Bao said.
All of the wage and benefit increases will come into effect on Tuesday, he said.
Over the past year, inflation in China has risen steadily.
Zhang Zheren, deputy director of the municipal civil affairs bureau, said: "Since April, the price of food, especially pork, has risen considerably."
Indian call centre employees Asia's fastest in switching jobs
March 17th, 2008The call centre employees in India are the most frequent job-hoppers among their Asian peers with an average job tenure of as low as nine months, a new survey says.
According to an annual report for the Asian contact centre industry released by callcentres.net, the average job tenure of call centre agents in India is the lowest at 11 months, while it is even lower at nine months for those having left their jobs in the past one year.
Identifying attrition and hiring as their top challenges for 2008, call centres in the country are now focusing on financial incentives and other rewards in their bid to retain the right talent, said callcentres.net, a leading Asian research firm focused on contact centres and outsourcing industries.
Absenteeism on decline
The study found that absenteeism or sick leave in the Indian call centres has declined to an average of nine days per annum this year from 15 days in 2007, but employee tenure is still a major issue.
Stating that the average tenure of nine months in India is the lowest in the region for those having left jobs in past one year, the report said that comparable figures at other places are 22 months in Philippines, 20 months in Malaysia, 18 months for Singapore, 17 months for Thailand and 12 months for China.
The study also found that smaller call centres in India, or those having less than 100 seats, have lower average agent tenure of 10 months, as compared to the larger centres where the tenure is close to 15 months.
Human resource management
"This may suggest that larger centres are recruiting agents from smaller centres, or that they are able to provide greater investment in human resource management, thereby holding onto agents for a longer time," it noted.
"The average age of workforce in contact centre is far below 30 years. This age group takes up a job in call centres for earning quick money. They don't look at it as a serious career," callcentre.net President Catriona Wallace said.
However, close to 70 per cent of Indian contact centre agents who left their jobs in the last 12 months chose to work in another contact centre, instead of leaving the industry altogether. This compares with 50-76 per cent of agents deciding to leave the industry in countries like Singapore, Philippines, Thailand, China and Malaysia.
The study said that Indian players have identified their primary challenges for this year as employee attrition, recruitment, training and implementing new service channels.
Career planning
"Indian contact centre executives are attempting to improve human resource management results by offering financial incentives, reward and recognition programmes and better career planning for agents," it noted.
According to the survey, the contact centre managers named financial incentives and recognition programmes as the most successful strategies implemented in the last 12 months.
For retaining employees, 37 per cent of contact centre managers ranked monetary incentives as a major tool. Besides, 22 per cent managers said reward and recognition programme helps retaining candidates and 18 per cent termed career planning as the most effective tool.
Salaries
The study said that a 32 per cent increase in manager's base salaries also demonstrated that the Indian contact centre industry recognised importance of rewarding a good leadership.
Other evidence of an increased focus on managing human resources was an increase in the average number of days of training an experienced agent receives, which has risen to 14 days this year from 11 days in 2007 for an agent who had been with the centre for over 12 months.
Responding to the New Labor Law
February 28th, 2008New Chinese employment legislation, the Labor Contract Law (LCL), is due to be promulgated on January 1st 2008.
The response to the law so far has been a kind of fearful anticipation but all of this hand wringing is not going to change the fact of the law’s promulgation. The best way to deal with any new issue is to make decisions about responses, and start implementing now. The key question centres on the specific things HR should be doing to keep itself on the right side of the new law.
Here are a few suggestions:
Employee Handbook or Policy Manual - Regardless of your company size, this needs to be set up now, as it is mandated in the new law. It should set out the internal rules and regulations that deal with employee relations, and specify procedures for dealing with conflict situations like termination. Under the new law you would be best advised to have a paper trail to deal with difficult situations, such as firing staff, and the end of the line for this paper trail is your Employee Handbook.
Salary Ranges - If your policy is to specify salary ranges to job applicants then review your advertising and make sure to state the range very clearly in advertisements. In addition to the new labor law, there is also the Employment Promotion Law which also takes effect on January 1st. It specifies that recruitment information in advertisements published by employers should be the same as that mentioned in job interviews. Again you have the paper trail issue.
Overtime - As an exercise, calculate the cost of overtime to your company. The logic is that you may be required to pay amounts that you had not considered before. Under the new law employees in China cannot work longer than forty hours a week. Any time worked over that is liable for overtime pay and the new law makes this enforceable.
Discrimination - Look for a new trap: discrimination. The new Employment Promotion Law says that applicants for employment will be entitled to sue employers for discrimination. This is based on ethnicity, age, gender, race, religious belief or physical disability. Although multinational companies have tended to be on the right side of this issue for a long time, it is still worth reviewing your current advertising and hiring procedure. You don’t know what lurks under rocks until you turn them over. (Oddly, the government will issue a list of ‘jobs unsuitable for women’ to assist companies stay on the right side of the law.)
Job Descriptions - Review your process, if you have one, for creating Job Descriptions. If you don’t have one, create one. The new law says that employees cannot be sacked at will anymore. You have to have well-defined reasons with a paper trail back to documents that the employee has signed, along with measures that support your claim that they are incompetent.
Documentation - Review every document that you sign with an employee, including NDAs and non-compete agreements. The new law makes you liable for any negative outcome because the assumption (mine) is that you hold all the cards, and have superior power within the employer/employee relationship. Any slip-ups will cost your company money, not the employee or the job candidate. (Note: Under the new law employees cannot be forced to sign non-competitive agreements. This belongs only to the realm of senior management.)
Temporary Staff - Deal with all and any temporaray staff that you have in your office or factory. You need to either hire them on a contract or let them go. You may have some leeway on this but any delay is at your own risk. Employees, backed by willing and well-prepared employment lawyers, will be able to claim double salary for months worked without a contract. The limit is 12 months’ salary but that’s not much comfort.
Permanent Staff - The use of employment contracts in China has been the norm for multinationals in China. At the end of the contract they have often been renewed without much thought because the impact of that decision was low.
Under the new law the employer is permitted to enter into only two employment contracts with the employee. After that they are on an open-term contract, which means they leave or stay largely at their own discretion, and of course excepting breach of contract. So every permanent employee needs to be reviewed. Or not. (This should have been dealt with some time ago and can only be seen as a legal loophole. One that you might not want to go through. Chinese professional staff have choices, and under the new law they also have power.)
Employee Council - The new rulings on the issue of unions is still not clear, but what is clear is that companies cannot bar employees from setting up unions.
An alternative is to set up an employee council that represents the employees and solicits their opinions. This body does have a say on issues like your Employee Manual, and it is advisable to have one because it can make the approval of this kind of document easier. If you don’t have an Employee Council you have to get every-single-staff-member to agree to each issue one by one. (The jury is still out on this one.)
It would also be advisable to create an Employee Council as a way of beginning a new kind of conversation with employees. Not having had previous experience of this issue, most Chinese employees do not have the language of employer/employee cooperation, and this council would give them the breathing space to develop that ability.
Public Relations - This may not seem like an obvious department to be involved in anything to do with the new labor law, but according to Image Thief the underlying narrative in China is “Chinese employee vs. callous multinational employer or foreign boss”.
Foreign companies are easy targets, with deep pockets and an aversion to negative publicity. He suggests that you consider the various possible negative PR scenarios that could happen, and prepare a response. It’s all about managing risk.
Clearly the power has shifted in favor of the employee in China. This is not to be feared, as fear tends to be immobilizing. The new labor law really only brings China in line with many other countries around the world. The bonus is that the establishment of the rule of law is an absolute good in itself.
That doesn’t mean you shouldn’t be prepared for the change because the new law may overreach on behalf of employees for a period of time, until employers push back.
New individual tax threshold to go into effect March 1
February 25th, 2008China's amended individual income tax law, which raises the tax levy threshold from 1,600 yuan (about US$220) a month to 2,000 yuan, will go into effect on March 1, accompanied by some regulations on its implementation.
Individuals who earn money from contractual operations and contract to lease businesses will also enjoy a raised tax threshold from 1,600 yuan to 2,000 yuan, according to the regulations.
This was out of consideration that the living costs of those individuals and their family members had increased, said a joint explanation on the regulations made by the Legislative Affairs Office of the State Council, Ministry of Finance and the State Administration of Taxation.
Individual tax payers who have housing in China but work overseas, or live overseas but earn income in China, will keep their tax threshold of 4,800 yuan a month unchanged, according to the regulations.
This will help reduce the gap between tax thresholds of different taxpayers, the joint explanation said.
The raised individual tax threshold will reduce government revenues by 30 billion yuan annually, according to official statistics. It will also mean that 70 percent of income earners will be exempt from income tax, against 50 percent now.
The individual income tax cutoff point was raised from 800 yuan a month to 1,600 yuan starting in 2006. This was based on consumption expenditures for basic living costs at the time.
However, the consumer price index rose several times last year, further burdening low- and medium-income earners.
Million dollar bonuses in China
February 23rd, 2008By Geoff Dyer in Shanghai
The million-dollar bonus has arrived in China's financial services industry as local firms, buoyed by the boom in the country's markets, compete to hire from a small pool of experienced staff.
Fierce competition has forced companies to start offering Wall Street-type compensation, especially in the fund management industry, according to industry executives, headhunters and consultants.
The surge in compensation underlines the dramatic resurgence of China's securities and asset management companies, many of which were making large losses three years ago, just as several Wall Street firms are running into serious problems. Executives report a big rise in CVs received from US-based professionals with a China connection.
"There were several bonuses over a million dollars last year," said Peter Alexander, head of fund management consultancy Z-Ben Advisors. "Retaining assets is no longer the top priority for the funds industry, it is getting and retaining good people."
Although a small group of well-known dealmakers has been paid large compensation packages over the last decade, the seven-figure bonus is relatively new for most of China's financial sector. The surge has been dramatic in the fund management industry, which has seen an explosion in assets under management from $40bn (€27bn, £20.5bn) at the start of 2005 to $450bn by the end of 2007, the result of rising share prices and massive inflows of retail money.
"I personally know of at least half a dozen managers who made more than a million dollars," said an executive at a Shanghai-based fund management firm who asked not to be named.
China has some 60 approved asset management companies, half of which are joint ventures or have foreign shareholders. Leading firms include Harvest Fund Management, in which Deutsche Bank has a 30 per cent stake, Invesco Great Wall, a joint venture, and China Asset Management, owned by Citic Securities.
Salary for new graduates edges up
February 21st, 2008The average starting salary for new graduates in 2007 was 1,798 yuan per month ($250), 210 yuan more than that of 2005, a survey conducted by Peking University shows.
The Beijing News reported on Tuesday that the survey on postgraduate employment shows 50 percent of graduates received a starting salary of over 1,500 yuan, with higher salaries for more advanced degrees.
According to the survey, male graduates receive higher salaries than females. The median starting salary for male graduates was 1,500 yuan, while that of female graduates was 1,300 yuan.
Research institutions, foreign-funded companies and government departments offer higher salaries to graduates. Administration management, business management and professional technical work were ranked as the top three fields, in terms of entry-level salaries.
The survey also shows that each graduate submits an average of nine applications when searching for a job, and receives an average of 4.3 interviews and 2.3 offers.
The results of the survey are based on 16,388 questionnaires collected from students at 28 universities and colleges in eastern, central and western China.
Employers boost wages in bid to attract workers
February 19th, 2008SHENZHEN: Companies in the Pearl River Delta area, the country's manufacturing powerhouse, are raising wages to attract migrant workers amid fears of a worsening labor shortage, a survey has shown.
The survey was conducted by the service center of Guangzhou human resources markets, which looked at 252 companies with at least 200 employees each.
The poll found out that the average monthly salary offered to new staff was up 13 percent from last year at 1,160 yuan ($162).
The survey also showed that nearly 70 percent of the companies said they will hire new employees this year, up 20 percent from the same period of last year.
Still, the number of job-hunters has decreased and are said to be more picky, the Guangzhou Daily reported.
The first job fair in Guangzhou after the Spring Festival break on Friday reportedly offered about 7,000 vacancies, but attracted only 4,000 job-seekers.
Figures from the Guangzhou labor authority showed that sectors such as the textile, toy-making, construction, catering, electronics and service industries were top of the list for workers.
It was particularly difficult for the textile and toy-making industries to hire workers since such companies could offer an average monthly salary of just 960 yuan, far below what is available across the board, the labor authority said.
The situation was said to be similar in other cities in the Pearl River Delta region, such as Shenzhen and Dongguan, which has seen industrial restructuring and experienced the impact of the new labor law, researchers said.
However, research by the Asian Footwear Association showed that close to 1,000 shoemaking factories closed or moved out of the Pearl River Delta region last year, with 25 percent setting up in Southeast Asian countries, 50 percent in other mainland cities and about 25 percent adopting a wait-and-see approach.
"The industrial repositioning of the Pearl River Delta region has forced some of the companies in the region, especially those with less competitive edge in the market, to close or move out," Ding Li, a researcher with Guangdong Academy of Social Sciences, said.
"The flow of migrant labor has been a clear indication of that."
The appreciation of the yuan, raw material price hikes and adjustment of export policies have also seen many private firms and companies funded by businesses from Hong Kong, Macao and Taiwan slowing down demand for migrant workers, the Guangdong labor authority said.
China drafts code to regulate salaries
February 9th, 2008?BEIJING, Jan. 22 (Xinhua) -- The Ministry of Labor and Social Security is working on a draft regulation to encourage employers to implement salary rises, a move that is being seen as a way to lessen the effects of rising inflation.
The regulation is designed to help develop a mechanism to facilitate a healthy and rational increase of employees' salaries, an official said.
The draft will be submitted to the State Council for review soon but the source did not release specific details.
Qiu Xiaoping, a senior official with the ministry, said the consumer price index shall be taken into account when salary levels are set.
"The government can not force companies to increase salaries. We hope to find a decision-making system that involves all parties in this issue through the regulation," he was quoted by Beijing-based financial weekly China Times.
About 12 provinces in China have announced their own rules on the salary issue and labor departments in 27 provinces began to ask employers to deposit a certain amount of security to ensure they do not delay payment.
These efforts have effectively reduced the number of cases in which salaries have been paid in arrears, the ministry said.
But many employers have not increased salaries for years and employees, especially blue-collars, still earn less than they should, Qiu said.
China, whose economy is driven by low-cost labor, has made efforts to protect the rights of employees. A new labor contract law took effect on Jan. 1, imposing tighter controls over employers' rights to hire and fire staff.
Executive hiring in Asia to remain firm in Q1 -- Hudson
February 9th, 2008HONG KONG -- Executive hiring by multinationals in Japan is set to reach a six-year high this quarter but a global credit squeeze will affect staffing plans at IT and finance firms in Hong Kong, according to a survey by recruitment firm Hudson.
The report was slightly less upbeat than a previous survey three months ago because hiring expectations in China and Singapore have dipped. Hudson said rising concern that the United States is heading for a recession would make banks and finance firms in the region more cautious about hiring.
Still, 66 percent of managers at multinationals in Japan expect to increase recruitment this quarter, according to the survey released on Thursday, up from 65 percent three months ago and the highest level since the Hudson report was launched in late 2001.
In China, 61 percent of managers at multinationals plan to increase headcount in the next three months, down just slightly from 64 percent in the previous quarter.
The survey by Chicago-based Hudson Highland Group Inc. covered responses from 2,500 managers at multinational companies across industry sectors in China, Hong Kong, Japan and Singapore.
"The market in Asia is still looking buoyant and it is quite separate from issues in the United States," said Gina McLellan, Hong Kong manager for the US firm.
"But from February to April we'll start to see the actual size of bonuses and whether recently announced global headcount cuts by some investment banks will come in Asia."
Asia's financial services sector is booming, helped by China's and India's rapid economic development, and international finance companies are expanding in the region.
JP Morgan says it could hire up to 1,900 people in Hong Kong in the next three years and Credit Suisse plans to hire at least 70 bankers in the Asia-Pacific this year.
However, there could be job losses too in financial centres Hong Kong, Singapore and Tokyo as investment banks including Citigroup, Lehman Brothers and UBS have announced plans to lay off thousands of staff worldwide in the wake of the credit squeeze, even though those cuts are likely to focus on the United States and Europe.
In Hong Kong, 58 percent of managers surveyed plan to add staff this quarter, up from 54 percent three months ago, but nearly a third of IT&T companies and 23 percent in finance and banking say the global credit squeeze triggered by problems in the US subprime mortgage sector would have an impact on hiring.
In Japan, 12 percent of managers across sectors say hiring plans will be affected by the credit squeeze compared with less than 10 percent in Singapore and China.
"Hiring expectations remain at a high level in all the markets surveyed and the outlook is positive," McLellan said. "But employers are caught between sharply rising salaries and bonuses on one hand and high staff turnover rates on the other. This is most marked in China."
The survey showed a third of managers in China expect to increase managers' starting salaries by more than 20 percent to attract candidates and 47 percent reported turnover rates above 10 percent.
In Singapore and Hong Kong, 19 to 20 percent of managers said they had to offer pay increases of more than 20 percent but in Japan only 4.0 percent of managers saw such a need.
Asian workers demand more
February 5th, 2008Dissatisfied staff, increasing job mobility, rising wage demands – no, it's not Europe or the U.S. but Asia, where the booming economies of the region are fuelling an increasingly fierce war for talent.
Asian workers are becoming happier to dump their old employers and chase the best jobs and money, in the process creating a talent and retention crisis for both local and Western employers in the region.
A study by recruitment firm StepStone has found companies looking to tap into Asia's rapidly expanding economies are reporting growing difficulties when it comes to recruiting and retaining skilled employees.
What's more, the wage bill – once one of the biggest attractions for Western companies moving operations to the region – has been rising sharply.
The company's Talent Report 2008 has concluded that the notion as a "low-cost utopia with an abundance of labour" is now long gone.
Senior managers in Asia reported facing four major recruitment and retention obstacles.
These were: rising wage and pay demands among potential candidates, a lack of suitable candidates and skills, a perceived lack of career opportunities among workers and employee increasingly believing they could snap up better pay and benefits elsewhere.
The expectations of workers in the region were also rising, with workers no longer prepared to settle for second best and feeling they deserved more than they were getting.
Employees were now much more likely to jump ship if a better offer came along.
Job hopping was set to become one of the biggest talent headaches for organisations over the next three years, StepStone predicted.
Despite these difficulties, more than four out of 10 business leaders surveyed globally believed the Asia-Pacific region offered their business the best opportunities for revenue growth over the next three years.
The region has been much less affected than Europe or the U.S. by the sub-prime led credit crunch and in areas such as financial services is looking particularly strong at the moment.
Nearly nine out of 10 global business leaders expected either slight or significant improvement in their company's growth prospects over the next three years, with fewer than three out of 10 saying the rising cost of credit had caused them to be less optimistic.
"While recent surveys and financial analyst predictions indicate a drop in business confidence in the next year, it's clear that most business executives are still bullish on Asia as the growth machine in the longer term," said StepStone chief executive Colin Tenwick.
"While the credit crunch might be dismissed in boardrooms as a short-term speed bump, it would be folly for Western businesses rushing to invest in high-growth Asian economies such as China and India to ignore the clear signs of longer-term talent shortages in Asia," he added.
"This research shows that many companies will have to prepare themselves for a huge battle for talent, one that is even tougher than in Europe and North America," he continued.
"Asia is seen as the engine for growth but without the right people, businesses will see their engine splutter and may not get out of first gear. Without a clear, formal talent management strategy in place, companies will find it difficult to get – and more importantly, keep – the people they need and may struggle to realise the growth they are promising their shareholders," added Tenwick.
Globally, too, business leaders were unanimous in agreeing that recruiting and retaining talented employees was getting tougher.
Nearly half felt it was becoming slightly more difficult and four out of 10 believed it was becoming significantly more difficult.
Yet, despite this, only a quarter of organisations surveyed had a formal, company-wide talent management strategy in place and 16 per cent did not have a talent management strategy at all.
"To compete for the best people it is clear from this report that many organisations need to address how they are going to manage their talent in a far more structured way or they place their ability to grow under serious threat," said Tenwick.
"Given the low number of businesses with a formal talent management strategy in place, it' s unsurprising that a third of respondents said their organisation was poor at forecasting talent requirements and retaining talent in the organisation," he added.
While it was in Asia where recruitment and retention difficulties were most acute, business leaders in Western Europe and North America also agreed that employee career switching would be a major issue in fuelling talent shortages there.
However, business leaders in the U.S. and Europe were in general more concerned at the effects of an ageing population and lack of education and development opportunities.
"The difficulty in finding talent coupled with an ageing workforce presents a serious challenge particularly to businesses in developed economies in Western Europe and North America," Tenwick pointed out.
"With almost half of executives in those regions viewing an increased use of older workers in a positive light, it appears likely that we will see more older workers returning to the workforce or perhaps postponing retirement to fill skills gaps," he added.
Follow-up: Foxconn Promises To Pay Security Guards Before Spring Festival
February 1st, 2008February 1, 2008
Foxconn has told local media that with the coordination of the Shenzhen Labor Department, it has reached an agreement with the security guards who asked for more pay and will pay them before the Spring Festival holiday.
Foxconn says that the security guards' request for back-pay was caused by some misunderstandings. A rumor that Foxconn will dismiss all securities guards had made the guards uneasy, and the salary the guards are receiving right now has already included the back-pay, but the security guards were unaware of this, according to the company. Foxconn says that it is reviewing its salary structure and revising it according to the Labor Contract Law in China.
Foxconn claims that it has signed an intercession letter with the security guards and will compensate them for the extra work hours before the Spring Festival based on the business accounting of the labor department. However, Foxconn has not disclosed the accounting results of the labor department.
Foxconn has also made a response to the report that it has put one of the security guards under house arrest, saying that the person was actually transferred to work at another factory of Foxconn under his own decision.
On January 29, more than 200 security guards of Foxconn gathered at the gate of company to ask for more payment for their extra work and another 40 went to Shenzhen Municipal Labor Department to appeal for help.
Survey: 2 in 5 Chinese employees consider themselves underpaid in 2007
February 1st, 2008BEIJING, Jan. 12 (Xinhua) -- More than 40 percent of employees in China were unsatisfied with their salaries in 2007 amid rising costs of living, said a latest online survey.
Covering more than 8,000 people of various professions nationwide, the survey was conducted earlier this month by www.zhaopin.com, one of China's leading job-hunting websites.
When the respondents were asked to rate their degrees of satisfaction on salary, 21.5 percent ticked 70-100 points representing "very satisfied and satisfied," 36.4 percent chose 60-70 points indicating "an average degree," with the remaining 42.1 percent opting for 60 points below to express their strong dissatisfaction.
Only one fifth of the employers have taken financial measures to increase employees' income to reduce the effect of price hikes in the past year, according to the survey.
Most respondents said they hoped their salary could be raised this year, with 30 percent of them hoping for a 20 percent increase, 36 percent for a 50 percent rise, and 21 percent for a doubling of their salary.
At the same time, more than half of the people surveyed said they were looking to change jobs.
The consumer price index, a major gauge of inflation, is likely to climb 4.7 percent in 2007, Yao Jingyuan, chief economist of the National Bureau of Statistics (NBS), said in late December 2007.
Multinationals in China face sharp rise in salary demands
February 1st, 2008SHANGHAI -- Multinationals in China face more serious challenges than anywhere else in Asia, paying more to attract talent but facing the region's worst turnover levels, a survey said Thursday.
Across all sectors of China's roaring economy, 32 percent of employers said job seekers expect salary increases of at least 20 percent over their previous position, a report by human resources firm Hudson said.
Yet despite higher salaries, Chinese employers have a harder time than anyone else in Asia holding onto people, with 13 percent of firms reporting turnover rates of more than 20 percent of staffing levels.
"Employers are having to give both the highest salary increases and the largest bonuses in the markets surveyed in Asia," said Angie Eagan, general manager for Hudson.
Hudson surveyed the expectations of 737 executives in China for the first quarter of the year.
In regards to higher pay it concluded: "This strategy does not seem to be working, as they are also facing the highest staff turnover rates."
Media, public relations and advertising were especially vulnerable to losing employees, with 56 percent reporting a turnover rate of more than 10 percent, and 27 percent of companies averaging a turnover rate of more than 20 percent.
Limited career progression was also a major issue, mentioned by 22 percent of respondents, also more than any other market in Asia, Hudson said.
"With the current buoyant market, employees who feel that they are not progressing in their career fast enough know that they can obtain other job offers fairly easily," the report said.
Employers also expect to pay much higher year-end bonuses this year. Across all industries 66 percent of respondents say they plan to pay bonuses of more than 10 percent, the highest figure for any market surveyed in Asia.
Moreover, nearly 24 percent propose paying bonuses of over 20 percent.
Adding to the bottom lines were strong expectations for expanded staff.
Mandatory Salary Increases for China?
February 1st, 2008By Frank Mulligan – Accetis International, Talent Software & Recruit China
There are looming clouds on the horizon in China with definite signs of wet weather, and not even the remotest connection to the presence of bears.
Self-inflicted rain.
The Chinese Ministry of Labor and Social Security is apparently working on a new law that encourages employers to pay higher salaries. It has not been announced as specifically mandatory, with compulsion for employers, but the fact of it’s consideration is problematic, to say the least.
The logic behind the move is that there is increased inflation in China, and this must be offset with salary increases. The fact that this would feed further inflation seems to have escaped everyone’s notice. No specific details are available but what is confirmed is the linkage between these salary increases and the Consumer Price Index (CPI).
I strongly suspect that this measure is intended to impact the lives of manual laborers but even if it is not a threat to your average Chinese professional in the immediate term, it will be in the medium term. Higher worker salaries mean that China becomes less attractive as an FDI market, and eventually there has to be a spillover effect on professional jobs.
The impact would include factories that don’t get built; factories that don’t expand; factories that actually reduce worker numbers; and those factories that would have come to China but are moved to cheaper countries. Never mind the effect on retail or hospitality establishments that depend so heavily on manual labor. In all these scenarios fewer professional managers are needed to manage the workforce, and that’s not a good thing in a country with so many new workers coming onstream.
It is also odd that this salary increase law, for want of a better term, should be considered at a time when the world’s economy is drifting, if not actually heading to recession. According to the International Monetary Fund (IMF), the pace of the world’s economy will slow significantly in 2008; in fact they cite an inevitable slowdown. Yesterday they warned that restoring world financial markets was going to be a complex and protracted task.
It could be a bumpy ride in China this year. Let’s hope for as few bears as possible.
China drafts code to regulate salaries
February 1st, 2008?BEIJING, Jan. 22 (Xinhua) -- The Ministry of Labor and Social Security is working on a draft regulation to encourage employers to implement salary rises, a move that is being seen as a way to lessen the effects of rising inflation.
The regulation is designed to help develop a mechanism to facilitate a healthy and rational increase of employees' salaries, an official said.
The draft will be submitted to the State Council for review soon but the source did not release specific details.
Qiu Xiaoping, a senior official with the ministry, said the consumer price index shall be taken into account when salary levels are set.
"The government can not force companies to increase salaries. We hope to find a decision-making system that involves all parties in this issue through the regulation," he was quoted by Beijing-based financial weekly China Times.
About 12 provinces in China have announced their own rules on the salary issue and labor departments in 27 provinces began to ask employers to deposit a certain amount of security to ensure they do not delay payment.
These efforts have effectively reduced the number of cases in which salaries have been paid in arrears, the ministry said.
But many employers have not increased salaries for years and employees, especially blue-collars, still earn less than they should, Qiu said.
China, whose economy is driven by low-cost labor, has made efforts to protect the rights of employees. A new labor contract law took effect on Jan. 1, imposing tighter controls over employers' rights to hire and fire staff.
Bosses offer more bonuses to entice workers to stay on
January 22nd, 2008EMPLOYEES at two-thirds of multinational companies on the Chinese mainland can expect year-end bonuses to rise at least 10 percent this year, a human resources report released yesterday revealed.
The figures were released amid revelations that many employees were dissatisfied with wages and bonuses, with 10 percent quitting their jobs.
Hudson Recruitment, a Nasdaq-listed international headhunting firm, surveyed 737 multinational companies on the mainland, mostly based in Shanghai, about their hiring intentions, year-end bonuses, salary and turnover in the first quarter.
Across all sectors, 66 percent of employers surveyed said they were planning to pay a year-end bonus of 10 percent more than that of last year.
The consumer sector turned out to lead the year-end bonus list with 78 percent of respondents saying they would pay more than 10 percent.
But the report didn't provide an average year-end bonus figure.
It did, however, say that 32 percent of the surveyed firms would raise employees' salaries at least 20 percent this year, compared with 25 percent for the same period last year.
In media and public relations firms, 21 percent of surveyed employers promised a salary rise of more than 20 percent, the lowest among all sectors.
The mainland finished first in both year-end bonus and salary increase categories in the quarterly report that covered the Chinese mainland, Hong Kong, Japan and Singapore.
Angie Eagan, general manager of Hudson's Shanghai office, said the high bonus increase and high pay rise reflected the country's headcount shortage.
"It's interesting to find employers here using bonuses and higher pays to retain talents as a way to stop people leaving," Eagan said.
The survey reported that 61 percent of employers were looking forward to hiring new staff in the first quarter of this year.
"But this strategy does not seem to be working, as they are also facing the highest staff turnover rates," she added.
In the past 12 months, turnover in the Chinese mainland was high. Forty-seven percent of firms said more than 10 percent of their employees quit their jobs.
The turnover rate is almost twice the figure of Japan, the report said. The most frequently cited reason for resignation was limited career progression and "dissatisfaction with salaries or bonuses."
P&G China Offers New Benefits For Employees
October 19th, 2007P&G China has offered a new policy to many employees, allowing them to choose one day to work from home from the five work days per week.
P&G currently has more than 6000 employees in China. The company says employees can choose one day to work from home each week based on their own work conditions. Zhai Yuyan, deputy director of P&G's Human Resource Department, has told local media that this new policy of allowing employees to work at home is another strategy that the company has taken to help employees balance their arrangements between work and life. According to local media reports, P&G's employees seem to be pleased with this new policy which offers them more freedom.
Apart from this work policy, P&G also allows its employees to work for npart-time. The company says its employees can apply for working three days or four days each week according to their needs, for which they will get only 60%-80% of their full salary, but they will enjoy the full amount of other benefits like social insurance and accident insurance.
In addition, P&G reportedly allows its pregnant employees to take maternity leave two months in advance of giving birth to a baby and says they can apply for a one-year maternity leave if necessary.
McDonald's raises wages in China
August 17th, 2007BEIJING - US fast-food giant McDonald's says it will raise the salaries of its workers, including part-time employees, at its 800-plus Chinese outlets, effective from September 1.
About 95% of McDonald's China "crew" will see a pay increase of 12-56%, or an average of 30%, said Jeffrey Schwartz, chief executive officer of McDonald's (China) Co Ltd. The remaining 5% are already being "paid very well". This will involve about 45,000 full-time and part-time workers, including students.
McDonald's has broadly three types of employees: crew, or the non-managerial staff serving at its outlets; managers; and administrative staff. "We have raised salaries in China many times, but this is the first time there is such a large increase covering so many people," Schwartz said.
The announcement comes a few months after media reports about McDonald's and other foreign fast-food operators such as KFC paying their part-time staff less than the local minimum wages (see China's part-time McWorkers exploited , Asia Times Online, April 20).
But Schwartz said the company's decision to raise pay has nothing to do with the pay-related bad press it has been getting. "We have been looking at a wage increase for a year. The issue [reports of low pay] only reminded us that we need to move more quickly."
Under the new wage initiative, pay for McDonald's "crew" across China will be "much higher than the local minimum levels".
"It will be 15% higher in both Beijing and Guangzhou, and 12% higher in Shanghai," said Susanna Li, vice president of McDonald's China human resources. For example, full-time workers in Guangzhou will see their monthly wages rise 21% to 1,072 yuan ($142).
Though the Labor Bureau of South China's Guangdong province clarified in June that McDonald's had complied with the regulations set by the local government, the issue of underpaying part-time employees has dented the company's image. Many workers had claimed they were receiving the city's legal minimum wage of 7.50 yuan an hour.
And that's the last thing McDonald's would like to see. "China contributes 2% of McDonald's global sales, which is a significant amount. Annually, McDonald's opens 100 new stores in China," Schwartz said. "We don't want to be thought of in that [negative] way. We want to be the best employer in China."
McDonald's managers, who account for 14% of its total local staff, are not included in the wage-increase program, but they have benefited from the "profit-award program" that started last year.
In 2006, 80% of the fast-food giant's Chinese managers received a bonus of up to twice their annual salary.
(Asia Pulse/Xinhua Information Center)
Chinese happiness at work
August 14th, 2007Employers in China who are fretting about surging salaries on offer to talented staff may be encouraged by evidence that employees are looking for more than a fat pay packet.
While job-hopping is rampant amid a talent shortage, there are growing signs that many mainlanders would be happy to stay with an employer if staying meant career development and a good working environment.
“Clearly the China market is hot and people are changing jobs for better pay. But pay is not the be-all and end-all,” said Gary Burnison, chief executive of U.S.-based recruitment firm Korn/Ferry International.
“People want to feel they are treated well and that they belong.”
In China, people often leave a company because they cannot get on with their immediate boss or feel they have no role to play, Burnison said.
Now some companies are making employee relations a big priority.
Nanfang Lee Kum Kee, maker of sauces and health products in Guangdong province, has introduced a “happiness index.”
Any time a manager meets a member of staff he’ll ask how happy the employee feels on a scale of one to 10. “If the number drops the supervisor needs to find out why,” said Sammy Lee, managing director of Nanfang.
“We want to make sure everyone is happy.”
This approach may be unusual in China but Nanfang enjoys a staff turnover rate of less than 10 per cent — in manufacturing where turnover rates of 50 per cent are not unusual — and was voted among the 10 best employers in Asia this year by global human resource company Hewitt Associates.
“Pay is not the key issue,” said Lee. “You’ve got to pay the market rate if you want to be competitive, but you also have to encourage staff to engage in their work and be happy.”
In a Hewitt survey, conducted every two years, career prospects replaced pay this year as the top motivation for employee engagement at 154 foreign and local companies in China.
“Compensation is critical in attracting staff but in terms of retaining people in China other things such as working environment, training and career opportunities become more important,” said Heather Wang, head of human resources for General Electric in China.
As a global company, GE can offer long-term careers in a variety of industries and countries but says it faces a challenge in developing staff quickly to keep pace with business expansion in China.
“We want people in China to get to the next level a year earlier than we would in more mature markets,” Wang said.
Career development requires investment in personal skills because Chinese workers often are held back by a rote-learning-based education system that stifles creativity, employers say.
GE says its China leadership program puts more emphasis on training in negotiating skills and working on projects outside an employee’s normal sphere of business.
A survey of multinationals by Korn/ Ferry shows a lack of innovation and creativity as the biggest challenge to finding leadership talent in China, after lack of international experience and poor ability to adapt to Western corporate culture.
Lee at Nanfang advocates “invisible leadership” that forces staff to take initiative.
He says he probably spends more time on the golf course, where he can think about strategy, than at work; delegates staff to deal with his e-mails; and does not possess a Blackberry or a computer, even in the office.
If the company is entertaining clients or holding events, staff decide how it will be organized.
“In most companies managers make the decisions and employees follow. We try to turn that upside down,” Lee said.
How to find a job in China (FAQ, information & tips)
July 2nd, 2007How to find a job in China (FAQ, information & tips)
USEFUL WEB SITE SERVICES FOR CHINA JOB SEEKERS:
To get a quick and easy list of China job postings, although limited, look at the following. Also a good idea to keep these in your pocket so you have one ear on the street all the time:
Check out China Insight's very own China job listing board, or list yourself on our China job seeker board.
Sign up with Asia Net, which posts jobs on its web site and delivers e-mail regularly with job postings. Will send e-mails specifically for jobs in Asia for people with Chinese, Japanese, and Korean language skills. Most are techie jobs, but once in a while something interesting comes up.
Wang & Li has all the top spots for Greater China, and competitive market information.
Alliance - mainly jobs for PRC locals, but an on-the-ground, professional recruitment group with exclusively PRC job listings.
Global Villager/ CareerChina has a full array of China oriented information.
Surf for jobs in China.
OUR PERSONAL ADVICE ON THE JOB SEARCH:
In our four years in Beijing, we have seen many friends come to China and find jobs. Many we have helped, and frequently we are asked the same questions by those considering taking the leap in coming to China. Briefly and succinctly, below are our own views on: the various paths people have taken, the types of jobs they have found, and advice if you are looking for a China job. This advice is primarily for college graduates or 20 somethings just getting their feet on their ground. If you have an MBA from a top business school or can command a top job by virtue of your experience, much of the below probably may not pertain to you.
Send us info on changes in the job market so we can update this page
MOST FREQUENTLY ASKED QUESTIONS:
Can I find a job?
How much can I expect to earn?
How and where should I start my job search?
How should I prepare before I come?
What are key issues when coming?
What’s important in the job search?
What types of jobs are out there?
What are key elements of a package?
What’s your final advice?
Return to (a little) China Insight main page
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DETAILED INFORMATION:
CAN I FIND A JOB? Yes. You will need to be resourceful, a bit lucky (all jobs are like that), and you may have to bite the bullet by sleeping on the floor of many apartments and eating fang bian mian (instant noodles) for several months, but it can be done. The key is being persistent, patient and lucky. More important is that you first set your own goals and parameters: what field do you want to be in, what salary do you expect, how long can you live without a salary, what is your ultimate goal in coming to China, etc.?
HOW MUCH CAN I EARN? If money is most important to you, you had best look first for a China job in the States or from Hong Kong. Any company that sends you overseas will most likely give you a full package plus great benefits. The downside is that these jobs are harder to find, especially if you have limited relevant experience; it also generally means working/training in the States for 1-2 years before heading over, but not necessarily. Even if money is not important to you, before you leave the States you ought to do a heavy job search on that end. If you find a job in China (see details below on compensation levels), they will most likely pay you less, although you can live well and still save money on a decent salary. See details on compensation below.
HOW AND WHERE SHOULD I LOOK FOR A JOB? Many people come and then look for a job. It's probably the true China person who chooses this riskier strategy. We do advise you to first look in the States, though, or in Hong Kong, before packing your bags. Hong Kong can be a prime job market, but unless you have a friend there, it is very expensive to stay and hang out. Who knows also? Maybe you get a good job in Hong Kong and they send you into Mainland China. Don't come here without first trying your luck in the US and/or HK. First try the web sites we recommend above, mailing out lots of resumes and using any network(s) you may have.
HOW SHOULD I PREPARE BEFORE I COME/WHAT SHOULD I BE PREPARED FOR? Be flexible: prepare all sorts of resumes, with different slants. Be prepared to be patient and not find a job for several months. At the very minimum, before coming prepare at least one resume with the "teacher" slant, as this is a sure backup to make money.
Also, if you arrive without a job, be prepared to spend 3 months getting settled, brushing up on your Mandarin, making connections and finally landing a job. Hopefully you won't need that long. Have at least enough money in your pocket to cover your expenses for this period. Figure about 1000 USD a month should cover you no problem, but that's if you are resourceful. The big chunk of that is housing, so if you find a dorm or crash with a friend, you can live on less. Many of us can live on 200 USD a month, outside of housing, in fact. Eat cheaply, not much western food, don't party a lot, take public transport or ride a bike, and live in a dorm, crash on someone's floor, or find a cheap hotel. Be creative. Housing and visas will be your main concern (see below), and oftentimes it's advisable to come first and study or work as a teacher, just to get your feet solidly on the ground and have housing and visa problems resolved right off the bat..
WHAT IS IMPORTANT IN THE JOB SEARCH? Get to know people: network, network and network. Send out resumes; reach as many people as possible. (But don't bombard us with e-mail). Many people who come as students also intern at companies or for the US embassy commercial section, or U.S. companies. The internships in the commercial sections can often lead to good job offers. Unpaid, but you are working for your future right? If you work in a certain sector of the commercial section, you'll be able to somewhat become an expert on it, and you can impress all those US companies in that sector who come through the embassy wanting to know about China. Latching on to a big multinational from the China side, save having incredible working experience or a top degree, is extremely difficult. However, local and many small western companies can offer interesting opportunities. Likwise, another advantage of coming on a study program first, particularly the better ones, is that they will help place you in an internship. This internship sometimes can turn into a job.
If you come to Beijing without a job, it is obviously better if you have some work experience or great Chinese. Best is both. You have an advantage if you can push one of these when job seeking. Take the position of the company you are interviewing with: why would they want to hire you? A Chinese person who is experienced and already knows the environment here earns probably 1/10 to 1/2 of the salary that you might command. Or a company could hire an experienced expat who knows their company and send them to China. Your chances improve if you have relevant US job industry experience or great Chinese. Gone are the days where good Chinese will get you by, or so I have been told. Many companies are also rethinking their China strategies and cutting back, and in the wake of the the rest of Asia's economic woes, the next year or so may be a period of retrenchment. But maybe you are just lucky. Remember, for as many local expats who say it's hard to find a job here, almost 90% of them, when asked how they found their job in China (and most got their foot in the door with little work experience behind them), will say, "Oh, I just got lucky."
WHAT ARE THE KEY ISSUES TO CONSIDER WHEN I GET OFF THE PLANE? Your immediate problems will be your visa and housing. Come to China on a tourist visa and you will most likely have to leave to change it's status or to extend the visa eventually, which may mean taking an expensive trip to Hong Kong. Because of the visa problem many people come and teach (resolves both visa and housing issues right off the bat) or come as a student (also resolves both issues). This allows you to get your feet on the ground and build up connections and language skills. If you come and then look for English teaching, they will seldom give you a visa. If you take the student/teaching path, you will usually have to be locked in for 6-12 months, but that's alright. Not cool to skip out on a teaching job.
WHAT TYPE OF JOBS/OPTIONS ARE THERE?
Teaching English
Being a student
Interning in the U.S. embassy/a western company.
Translating services
Legal assistant
Journalism
Business
Odd jobs for local Chinese companies
Be creative - think outside the conventional job box
Start something on your own - be an entrepreneur
WHAT SHOULD A PACKAGE INCLUDE? There are several issues here to consider, which I elaborate on below: salary, housing allowance, healthcare, vacation/plane ticket, visa, taxes, other issues.
Your package will depend if you are hired as an expat from abroad or a local hire. Obviously if you are brought in from overseas, you can expect [spam word detected] and a full range of benefits. Salaries range in the industry, but if you are sent here, figure you will get $25-100K, hardship posting pay, standard bonuses, housing allowance of at least $1500-6000 a month, 3-5 weeks paid vacation, and round trip air ticket once a year (and perhaps more for R&R leave time), full US standard healthcare, evacuation insurance through AEA, SOS, or MEDEX, tax coverage, shipping fees covered; and all other reimbursable expenses and training that would accrue to you as an employee. Sometimes language lessons are paid for as well. If you are high enough up or the position requires it, you will get a car and/or driver, a mobile phone, or at least have travel to and from work reimbursed.
If you are hired locally, the story is drastically different, and you should have no illusions about landing the above. Your compensation of course varies on the company, your background, the industry, and your position. Nevertheless, here's what you can expect, as an expatriate local hire:
SALARY: As a journalist or clipper, you might get $500-1500 a month and up; As a translator or legal assistant $15K - 30K; In business typical salaries are between $15-50K, but can be higher if you have experience in the industry or get lucky enough to latch on to a big company. As a teacher, you can earn $5-20 an hour, but work can be patchy. Remember that your salary is only as valuable as the rest of the package: housing allowance, tax coverage, health insurance, etc. can tilt the balance.
HOUSING ALLOWANCE: Housing in Beijing is the biggest ma fan (nuisance) for expats. Living in a _legal_ apartment can run $1200 at the cheapest, and up to $2000 for something reasonably located. Don't expect much for housing allowance, but figure the cheapest "non-legal" apartments will run about $300-600 per month. Lots of local expats live in these apartments. Some expat packages don't include housing; others will give you perhaps $1500 a month at most. Few local hire expat jobs will provide you an apartment - you'll have to find one on your own. If you choose to live in local housing, you can save money, but you will always live with the fear of the gong an ju (PSB) knocking on your door. (Yes, I've been booted from my apartment more than once, but that is another topic - see separate section - seeking local housing). The good news amid all of this is that housing prices are coming down in Beijing; overdevelopment has changed the real estate scene from a seller to buyer's market (though legal housing still ain't cheap), and the government has gotten a little more lax with living in "local" housing.
HEALTHCARE: Ideally you should get a US healthcare package or evacuation service through SOS or AEA, the two biggest providers in Beijing. Figure the US healthcare package to be worth $200 per month in your salary. If you get evacuation insurance (your parents would want you to have this), it will run the company $300 per year, but doesn't mean as much if you don't have health coverage also. (A visit at Beijing United Family Hospital is around $80). In Beijing, aside from Beijing United Family Hospital, you might check out AEA and IMC for western healthcare. Cheaper but OK are the Sino-German Health clinic or the Hong Kong Medical Clinic. Otherwise, if you go to a Chinese hospital, you'll pay less and still get decent treatment at Peking Union or The Sino-Japanese Hospital. There is a difference is the healthcare provision, though; I didn't spend three years setting up Beijing United for no reason at all! For inquires about Beijing United plans, send them an e-mail
VACATION/PLANE TICKET: Standard for an expat who signs on for 1-3 years is 3-4 weeks of paid vacation, and one roundtrip ticket back to the States per year. But sometimes you won't even get this.
VISA: Your company should handle this. If you are lucky, maybe they send you to Hong Kong every 3-6 months to get a new visa. This works out well (go buy some new clothes and get a needed rest from Beijing), and also helps you avoid taxes in China. Visas are a major tou teng (headache) if your company refuses to handle this for you. Insist on your company handling your visa and all related work permits.
TAXES: Big companies will handles your taxes for you (meaning what they quote you as your salary is after tax). Smaller ones probably will deduct taxes from your pay; others will not report it and leave it up to you. If everything is done in accordance to China and U.S. law, however, you can expect the following: Around 8% of your salary should be deducted for Social Security and FICA by your company (if it is a US company). If you earn less than $72,000 year (and if you don't, I'll trade jobs with you), you are totally exempt from US personal income taxes if you spend more than 330 days of the year outside the U.S. Just make sure you file (you get an automatic extension until June 1, by the way) the 1040 form as well as the 2555-EZ form available in the States or at the US embassy. If your company follows Chinese law (not all do), you pay a graded tax (meaning you pay x% on income from 0-3000 RMB/month; y% for the amount from 3000-5000 RMB/month; z% for the amount from 5000-7000 RMB/month, etc. - note figures not accurate). Whatever you earn, figure China taxes are less than your equivalent grade in the States. For example, if you earn 25,000, you might pay on average 20% income tax in the States (correct me if I'm wrong - I've never worked there!); in China, the level is closer to 13%. In short, if you are thoroughly confused: if you work in China, make a real salary, and follow all US and China laws, you pay less taxes than if you worked in the States for the same salary -- but not THAT much lower. If you can find ways to get the company to cover taxes, all the better. If you don't pay China taxes, the burden should be on your company.
Other issues: It's always good to get perks on the job: e-mail, mobile phone, pager, computer, reimbursed rides to and from work. Standard bonuses are a month salary or less, or if you are in sales, commissions. Throw these jobs in to sweeten the deal. Standard raises vary from year to year, but are between 3-15%.
FINAL ADVICE: No matter what job you land and what compensation you get, know there will always be someone who earns more than you. The grass will always be greener on the other side, as they say. Pick a job that you are interested in, and offers you a chance to develop. If you want to know China and speak Chinese, pay attention to the company culture: will you speak Chinese? Who are the expats? What life do they lead? At the same time, remember that you have to negotiate your contract. Look out for yourself, as no one else will; that's why we've written this and put it in public access cyberspace.
[Please keep in mind too this is written based on our experience, which is all in Beijing. We hear Shanghai is a good market, if not better than Beijing, and the terms may all be different. Also I haven't updated this; if China's rapid changes are any indication of change in the job market, maybe all this will be different tomorrow.]
FINALLY, will you be able to find a job? Of course. It may not be easy and it might not be what you like right off the bat, but there are jobs out there. Know what your goals are and also know how long you can stay without real employment (read: income). Worse comes to worse, you work on your Chinese and travel and witness first-hand the greatest economic and social revolution of all time. That's not so bad, now is it? The longer you stay and dedicated you are, the better your chances become of finding something interesting (and interesting jobs there are). Also remember that once you work, and if the job is demanding, you won't have time to bum around and see the craziness of Beijing/China. If you can't find a good job, use the time to study Chinese -- trust me, you'll never regret it.
This page authored by: Michael Wenderoth[/b]
Here are a few links that will save you loads of time finding a job.
http://jobs.amcham-shanghai.org - Quality jobs from many fortune 500 companies. Mostly managerial and Director positions.
www.51job.com - Top Chinese Website: Milions of jobs and viewers, but you gotta get past the advertising first.
www.zhaopin.com - similar to above. 2nd in race.
www.chinahr.com - linked with Monster. Similar to 2 above.
www.thishanghai.com - good variety of jobs, not always best quality.
www.asiaexpat.com - Shanghai page has loads of jobs. Good amount of traffic also keeps jobs fresh.
www.shjob.cn - Shanghai version of 51 job. Recently with multi million Euro injection.
www.chinaonline.cn.com - good site in general, but not loads of postings.
All of the above are useful in finding work, the Chinese websites are more catered to Chinese obviously, even though they do have english version. The local community websites, like Shanghai Expat, are good for general range of jobs and have good response to postings or requests. Chambers of Commerce are good to find quality jobs as their members have a majority of big companies, multinationals and such.
There are plenty of ways to find jobs in Shanghai and China, but websites are certainly a good start!
China to raise wages to offset price hike
July 2nd, 2007BEIJING: Minimum wages in China will be increased this year to offset the sharp rise in food prices that has particularly hurt low-income families, state media reported on Friday, citing the labour ministry.
Local governments must raise minimum wages before the end of 2007 in regions where salaries have risen slowly or are markedly lower than the average, the Xinhua news agency said, citing the Ministry of Labour and Social Security.
"Local governments must adjust minimum wages in a timely manner and ensure that real standards do not fall with the consumer price index going up," the ministry said.
China's inflation rate rose 3.4 per cent in May from a year earlier, above the government's annual target of 3.0 per cent, but food prices have accelerated at a much faster pace.
In a circular cited by Xinhua, the labour ministry said low-income families were particularly feeling the heat after meat and poultry prices jumped by 26.5 per cent in May and the cost of eggs rose 37.1 per cent.
Premier Wen Jiabao also warned in late May that the rising price of pork, the most commonly eaten meat in China, could threaten social stability.
In China, minimum wage standards vary from region to region. At the end of last year, southern China's Shenzhen city had the highest minimum wage in the country at 810 yuan ($105) per month, while eastern Jiangxi province was bottom with a salary of 270 yuan, Xinhua said.