Recruiting in China

Hewitt’s latest survey shows some employers will be giving salary increases of about one percent smaller than they would have, had the economy been looking a little better.

Hewitt’s survey of 411 large companies revealed that 42 percent of companies “are revising their salary budgets and variable pay spending strategies related to the economic downturn or because of increasing cost pressures.” Of that 42%:

49 percent plan to reduce variable compensation payouts
66 percent will cut bonuses by more than 10 percent in 2008
Salary increases will be about 3.1 percent in 2009, or about 1 percent smaller than they would have been.
Thirty-eight percent of companies are reserving part of their salary-increase budget for their highest performers. And 23 percent are creating supplemental, discretionary incentive pools for high-performers. Another 20 percent are offering employees retention bonuses for them to stay a certain amount of time.

GUANGZHOU: Authorities in Guangdong will consider setting up an emergency fund to protect workers against losing their wages in the event of further factory closures, the provincial labor and social security department said on Monday.

Responding to a resolution put forward by a member of the provincial political consultative conference, the department said in a statement that the feasibility of such a fund will be considered and that financial departments at various levels will likely contribute to it.
The fund will primarily be used as insurance against firms going bust or unscrupulous bosses absconding, the statement said.

Zhang Xiang, director of the labor department, said in the statement: "From time to time, the boss of a company in financial trouble will flee and leave his debts behind, and that creates turmoil.

"In the current economic climate, there is a good chance that more companies, especially labor-intensive ones, will collapse.

"This fund would help protect against some of the financial and social problems caused by such closures."

Zhang said that traditionally, companies paid a premium, on top of their rent, to the owners of the factory buildings they occupied.

In the event of a firm suffering financial difficulties, or the boss absconding, this money could then be used to cover wage payments for the workers.

"But the funds were seldom big enough to cover the total wage bill," he said.

The labor department has also been urging firms to start paying their workers via bank transfer to enable closer monitoring, he said.

Furthermore, the department is currently seeking to work more closely with other local bodies, including the people's bank, industrial and commercial administration, and the foreign trade and economic cooperation department, to develop a better picture of companies' credit ratings.

Not everyone, however, believes the insurance fund is a good idea.

Li Qingqing, an associate professor of economics at South China Normal University, told China Daily yesterday: "Taxpayers' money should not be used to support failing businesses.

"An infinite amount could be lost if firms continue to go out of business.

"Instead, companies should be made more responsible, perhaps by paying some form of premium when they apply for registration."

Thanks to last year's bullish market, the financial sector provided the most lucrative jobs in China and fund management talents topped the 2007 salary rankings, The Economic Observer reported on Monday.

Executives, fund managers and high-caliber investment researchers were the top earners, according to Taihe Consulting, a human resources company, after conducting a survey on 15 large fund management companies in Shanghai, Beijing and Shenzhen.

Industry insiders have attributed the high earnings to a shortage of fund management talents and the thriving fund businesses in 2007.

Even the current bearish market has not shown an adverse effect on fund employees' incomes yet.

Statistics collected by Taihe in June indicated no signs of fixed income reductions among fund management employees. And flexible income was closely related to companies' performances, it found. Some companies can still collect remarkable management fees in 2008 that are no less than last year's, Taihe said.

The cash income of an employee comprises a fixed part and a flexible part in addition to their benefit package. The fixed part is made up of basic salary and allowances, and the flexible, accounting for 30 to 40 percent of the total income, is given as a merit-based bonus, such as year-end bonuses, or as sales commissions. Some positions even offer a flexible income that takes up as much as 50 percent of the total.

An employee with a Shenzhen-based fund management said: "The fixed salary was set at the beginning of the year, so there would be no big change. The flexible part may vary from person to person…some fund managers won't necessarily get a smaller year-end bonus, because the payment is based on the rankings of fund performances."

By contrast, listed securities companies already registered a year-on-year drop of 8.6 percent in salary payments in the first half of 2008, with some employees' incomes reduced by more than 60 percent, according to a report by Shanghai Securities News in August.

From a regional perspective, fund management companies in Shanghai, a national financial hub, offered the most lucrative jobs in 2007, Taihe's survey showed. Beijing came second and Shenzhen third.

The consulting company found that the lower-end salaries of fund management, real estate and high-tech sectors were quite similar. But at the very top level, the financial sector offered salaries that doubled what the high-tech gave, with real estate coming somewhere in between.

"Financial employees earned much higher salaries than people in the other industries in 2007," a Taihe analyst said. "And undoubtedly the most lucrative jobs came from the fund sector."

HONG KONG, Oct. 20 (Xinhua) -- Hong Kong's seasonally adjusted unemployment rate rose to 3.4 percent in July-September period from 3.2 percent in June-August 2008, reversing the decrease seen earlier in the year, revealed the latest figures released by the Census and Statistics Department here Monday.

Matthew Cheung Kin-chung, Secretary for Labor and Welfare, warned that the September figures might not have reflected the impact of the global financial turmoil, which is now beginning to be felt.

"Looking ahead, unemployment is likely to rise further in the near term," he said, pointing to some sectors bound to be affected by a contraction in business triggered by the global economic crisis.

According to the department's latest statistics, provisional number of unemployed persons rose by around 4,900 from 129,100 in June-August to 134,000 in July-September.

The provisional underemployment rate, however, decreased from 1. 9 percent to 1.8 percent over the same period of last year as some summer workers returned to schools upon the start of the new academic year.

Comparing July-September with June-August period, increases in the unemployment rate were mainly observed in the wholesale and retail, restaurants, manufacturing and financing sectors.

As to the underemployment rate, decreases were mainly seen in the decoration and maintenance and transport sectors.

Cheung said the Labor Department will closely monitor the situation and stands ready to help the affected employees, vowing to continue enhancing its employment services and the competitiveness of the local workforce through education, training and retraining services and job search facilitation.

"In the long run, the implementation of the major infrastructure projects will help create employment opportunities and economic benefits," he said.

Cheung noted that the Hong Kong government had proposed to introduce a series of facilitating measures to improve the Small and Medium Enterprises (SME) Funding Schemes with a view to strengthening support to SMEs and will continue to discuss with them and listen to their views.

"I believe SMEs could benefit from these measures. I hope that employers could actively consider job restructuring or job sharing as an option to tide over the difficult period," he added.

Another 1,500 workers in south China have fallen victim to the current global financial crisis as they will have to find new jobs when their factory closes next week.

Hong Kong-listed BEP International Holdings Limited announced it would shut its factory in Shenzhen, Guangdong Province, on Monday after its exports had dropped drastically this year registering huge deficits, a company spokesman told Xinhua on Saturday.

The company was currently paying arrears to its 1,500 workers. Some had found employment with other factories in the southern Hong Kong border city.

BEP, founded in 1986, is an export-oriented company. Most of its annual output of 5 million units of home appliances was sold to Europe, North America, Asia and the Middle East, Australia and New Zealand.

It set up the 22,000-square-meter Shenzhen factory in 1992.

Earlier this week, 7,000 workers were sacked in Dongguan, also in Guangdong, after the Hong Kong-listed Smart Union Group (Holdings) Limited closed two factories.

Smart Union Group is one of the world's biggest toy makers. Most of its products are sold in the United States.

Energy-efficient lighting manufacturers are increasing their technological input to improve the life of new bulbs and cut prices.

Guangdong Shunxiang Energy-Saving Lighting Technology has developed a new kind of energy-saving bulb that could save up to 70 percent of the electricity used by traditional incandescent bulbs.

The life of the light bulb could reach more than 60,000 hours, 10 times that of regular energy-saving lamps and 100 times more than incandescent light bulbs, according to General Manager Lin Weihe.

"Our lamps with new technology only need to be changed every 10 years, but in the same period, a mercury vapor lamp or sodium vapor lamp would have to be changed 15 times," Lin told China Daily.

The company, headquartered in Chaozhou, Guangdong province, is displaying its latest products at the ongoing 10th China Hi-tech Fair in Shenzhen.

The company plans to invest 500 million yuan in a new plant, which could be operational by 2010, with an annual production capacity of 3 million units.

European Union countries will ban the use of incandescent light bulbs in favor of energy-efficient lightings, following the United States and Australia, by the end of this decade.

China is also actively promoting the use of energy-saving lighting. It plans to sell at least 150 million highly efficient energy-saving light bulbs from 2006 to 2010.