Category: Comp, Salary & Benefit


Permalink 11:27:28 am, by dacare, 663 words, 124 views   English (US)
Categories: News of China, Comp, Salary & Benefit

China’s state sector leaders embrace pay cuts of up to 60%

The corporate reporting season for China’s largest state-owned enterprises, which concluded last month, featured an unusual theme. Despite earning far less than their international counterparts, the men who steer the country’s largest companies welcomed recently announced plans to cut their pay.

“The biggest difference between China and western countries is that we pursue the goal of getting rich together,” Fu Chengyu, head of the country’s largest refiner, told reporters. “If you want to earn big sums, you should not be an SOE executive.”

As Sinopec chairman, Mr Fu earned Rmb863,000 ($141,000) in 2012, a paltry figure when compared, for example, with the more than $3m earned by Christophe de Margerie at the French oil major Total. The contrast in other sectors is even starker. The president of Bank of China, one of the country’s “big four” lenders, was paid Rmb997,000 ($163,000) last year – or less than 1 per cent of the $20m pocketed by JPMorgan’s Jamie Dimon.

According to local media reports, leaders of the country’s top 50 SOEs will face pay cuts of up to 60 per cent as the government imposes an annual pay cap of Rmb900,000. President Xi Jinping announced plans to rein in executive pay in August, but the new guidelines have not yet been released by the ministries of finance and human resources.

In August Zhang Yun, president of Agricultural Bank of China, said he would “firmly support and strictly implement the decision”. Mr Zhang, who earned just over Rmb1m in 2013, faces a pay cut of at least 10 per cent.

Those who welcome Mr Xi’s initiative, which coincides with China’s most ambitious anti-corruption campaign, argue that it is misleading to compare SOE executives with their international counterparts, especially in industries that are protected from overseas and private sector competition.

“SOEs enjoy a lot of policy support from the government,” says Gao Minghua, a corporate governance expert at Beijing Normal University. “Those factors must be removed before you can compare SOE executives to multinational executives.”

The more important comparison, he adds, is between SOE executives and their own employees: “There is a large income gap in China that is having a negative impact on society. The salary gap between senior executives and average employees must be appropriate. If too small, it will lessen executives’ initiative. If too big, it will lead to social instability.”

According to a recent pay study co-authored by Mr Gao, senior executives at listed Chinese financial companies are paid 50 times as much as the average worker.

“It doesn’t make sense to benchmark Chinese SOE executives against western – and especially American – executives,” agrees Kjeld Erik Brodsgaard, director of Asia research at the Copenhagen Business School. “None of these guys are ever going to become the head of GE or a big American financial institution. They stay in China and move around as civil servants. In a Chinese context they are supermanagers.”

Mr Fu at Sinopec is a classic example of a Chinese supermanager. He had previously run China’s largest offshore oil company, Cnooc, and his transfer to Sinopec was decided neither by the refiner’s board nor by the State-owned Assets Supervision and Administration Commission.

Better known as Sasac, the government commission is nominally charged with administering China’s largest SOEs; in fact, it is overshadowed by the Communist party’s powerful Organisation department, which both transferred Mr Fu to Sinopec and appointed his successor at Cnooc. “Sasac was supposed to manage and control these companies but it never really happened,” says Mr Brodsgaard. “Sasac was not authorised to receive dividends from these companies and doesn’t even appoint their chairman and chief executives.”

Sasac’s authority was further undermined last year by the arrest of its former head, Jiang Jiemin ; the former SOE oil executive was caught up in a larger investigation into his patron, Zhou Yongkang, who once sat on the Communist party’s all-powerful standing committee and ran China’s domestic security services.

Additional reporting by Wan Li

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Permalink 03:49:45 pm, by dacare, 125 words, 173 views   English (US)
Categories: News of China, Comp, Salary & Benefit

Expected salary of university graduates has fallen to 3,680 yuan per month, a record low in past four years, the Beijing News reported on Wednesday.

According to China Graduates Employment Pressure Report of 2014 released by Beijing Youth Stress Management Service Center, the expected salary was 5,537 yuan in 2011, almost 2,000 yuan more than this year.

It also shows that there are more than seven million university graduates this year, the highest number in history. However, salary and employment pressure are at the lowest in past four years.

Although the expected salary this year was a slight drop compared to 2013, but seen against the 5,537 yuan in 2011, the decline was substantial.

Meanwhile, with the drop in expected salary, the employment pressure also fell from 18.17 percent last year to 16.91 percent in 2014.

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Permalink 01:40:06 pm, by dacare, 77 words, 179 views   English (US)
Categories: Comp, Salary & Benefit

Chinese migrant workers' wages up 13.9 pct

The average monthly wage for China's 166 million migrant workers rose 13.9 percent last year, said the Ministry of Human Resources and Social Security on Thursday.

Migrant workers, defined as those who have worked away from home for more than six months, earned an average of 2,609 yuan (429.2 U.S. dollars) per month, said the ministry.

China had a total of 269 million farmers working in non-agricultural sectors by the end of 2013, up 2.4 percent year on year, according to the ministry.

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Permalink 08:49:14 am, by dacare, 334 words, 310 views   English (US)
Categories: News of China, Comp, Salary & Benefit

Overseas degree no guarantee of higher salary in China

Chinese students possessing a degree from an overseas university do not necessarily receive a similar wage when seeking jobs at home, with a huge gap of up to 100,000 yuan (US$16,400) existing between them, a recent survey shows.

Their salaries are instead determined by their work experience during their time abroad, a survey conducted by the Beijing-based EIC International Education revealed.

The survey found that a Chinese job seeker with less than five years of overseas work experience receives an annual salary of 165,000 yuan (US$27,100), while individuals with at least five years working experience abroad can command a salary of up to 267,100 yuan (US$43,900) a year.

Most of the positions offered by Chinese companies do not specify a requirement for a domestic degree or a foreign degree, the EIC International Education said, while 62% of recruiters placed greater emphasis on a candidate's professional skills when hiring rather than merely whether they hold a foreign diploma. Around 84% of the Chinese firms polled stated that they considered job seekers who had overseas experience, innovative abilities and proficiency in a foreign language.

It is not an easy task for Chinese students to find work overseas, however. A total of 38.9% of the respondents said the major obstacle they faced while looking for jobs in a foreign country was the prevailing local economic situation. Moreover, their possession or lack of cross-cultural social abilities also affected their chances of working abroad, accounting for 33.6% of the total polled respondents.

Meanwhile, the dropout rate of Chinese students at Ivy League schools in the US, including Harvard, Yale, Cornell and Columbia was as high as 25% this year, according to Li Zhu, president of EIC International Education. Li said that some Chinese students are unable to adapt to the educational system and the language requirements in western countries.

The survey was conducted over a nearly six-month period. A total of 9,173 valid responses were collected from industries, such as finance, education, healthcare, real estate, tourism and science in 23 cities across China, including Beijing, Shanghai, Guangzhou and Shenyang.

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Permalink 02:10:25 pm, by dacare, 355 words, 203 views   English (US)
Categories: News of China, Comp, Salary & Benefit

Doubts over accuracy of data on pay rises

Newly released official data about pay rises in the 2007-2011 period has stirred online debate over the figures’ accuracy, with many believing the increases are not remarkable enough considering inflation and surging housing prices.

The Chinese Academy of Personnel Science on Thursday published a report on the development of human resources in China, showing that the average annual salary of urban employees increased from 24,721 yuan (US$4,022) in 2007 to 41,799 yuan in 2011, up 69.1 percent.

In 2012, the average yearly salary for urban employees in non-private sectors stood at 46,769 yuan, up 9 percent year on year after deducting price factors, according to the report.

The news triggered heated discussion soon after appearing on popular Chinese websites — most netizens questioned the figures in the context of their own lower salaries and deemed the data useless amid surging expenditure.

“I feel ashamed that my salary is again below the average level” was a common comment on Sina Weibo, one of China’s most popular Twitter-like services.

Microblogger “joys” said: “After carefully rechecking my paychecks, I am sure that I was ‘averaged’ with other rich workers.”

In fact, many indicated the high salaries only belong to civil servants and employees at state-owned enterprises and monopolies.

Meanwhile, the debate turned against the relatively larger growth in prices, especially in the real estate businesses.

According to the National Bureau of Statistics, China’s consumer price index, the main gauge of inflation, increased 2.6 percent year on year in August, a slight decline from 2.7 percent in July.

The CPI rose 2.6 percent year on year by the end of 2012, but it was a rise of 5.4 percent in 2011 from the previous year, well above the government’s full-year inflation control target of 4 percent.

On the other hand, driven by rapid urbanization and speculation, China’s property market has taken off in recent years, especially after the economic stimulus policies the government unveiled in 2009 to help the country weather the global financial crisis.

The China Index Academy, a leading property research institution, said the average new home price among 100 cities stood at 10,554 yuan per square meter in September, up 1.07 percent from August and an increase for a 16th consecutive month.

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Permalink 01:48:06 pm, by dacare, 581 words, 379 views   English (US)
Categories: Recruiting & HR Tips and Practices, Comp, Salary & Benefit

Reality check at China’s Huawei boosts wages

BEIJING (Caixin Online) — Competition for fresh-faced university graduates is heating up in China’s telecom sector now that electronics equipment giant Huawei Technologies Co. has significantly hiked salaries for certain white collar employees.

The pay decision is also a signal that the world’s largest manufacturer of telecom gear remains committed to an ongoing expansion that encompasses new arenas, such as consumer smartphones.

First-year worker and junior executive paychecks were pushed up by as much as 35% in August following a July 29 announcement by the Shenzhen-based company.

Just a week earlier, Huawei’s biggest domestic rival, ZTE Communications HK:763 -0.13% CN:000063 -2.18% ZTCOY -0.27% , unveiled a new equity incentive plan designed to retain key white collar workers. The company said it would distribute about 103 million company shares as bonus compensation for 1,531 select employees.

Huawei’s pay hikes not only upstaged ZTE’s highly touted incentives program but also brought its salary scale a notch closer to levels offered in the country by foreign competitors including telecom multinationals Ericsson, Nokia NOK +0.25% FI:NOK1V +1.08% , Siemens XE:SIE +0.26% SI +0.12% and Samsung KR:005930 +0.97% SSNLF +2.50%

Probationary salaries for 2014 college graduates hired by Huawei will rise to more than 9,000 yuan ($1,470) per month from 6,500 yuan USDCNY -0.01% . Master’s degree graduates will be offered more than 10,000 yuan a month to start, up from 8,000 yuan, the company said.

Altogether, Huawei said it would boost the companywide payroll by more than 1 billion yuan. Performance-related pay hikes will range from 25% to 30%, depending on the type of work.

Management thus hopes to attract and retain employees in a competitive labor environment where Nokia, Siemens and other foreign companies generally offer new bachelor’s degree graduates at their China divisions between 8,000 and 10,000 yuan per month, said Wei Xiaokang, a headhunter for Beijing-based Offercome, which focuses on matching jobs and job seekers in the Internet industry.

“Huawei’s workplace environment is more intense than that of Ericsson and other multinational companies,” Wei said. “But the pay is lower.”

Huawei has also been fishing for talent in ZTE. Indeed, according to a ZTE source, the Huawei pay increases “drove ZTE (management) crazy” because in the first half of 2013 “a number of people” left ZTE for jobs at Huawei.

ZTE employs an estimated 50,000 to 60,000 people, one-third as many as Huawei.

“Raising junior executive salaries on such a large scale, as Huawei has done, undoubtedly marks a significant change in remuneration policy,” said Wei.

And it’s a surprising change for the company’s labor policy considering the weak business atmosphere in the telecom industry, where of late many companies have been downsizing, trimming costs and reducing product lineups.

Financial strength

Huawei was apparently in a better position to raise wages than its rivals thanks to high revenue growth during the first half of 2013, says Deutsche Telekom International Consulting’s director in China, Fang Honggang.

Privately held Huawei, which releases only sales revenue and net profit margin figures in its financial statements, reported “relatively optimistic… accounts receivable, bad debt treatment and possible risks,” Fang said.

Huawei reported sales of 113.8 billion yuan for the first six months of the year, up 10.8% over the same period of 2012. Moreover, company management forecast a 2013 net profit margin of 7% to 8%.

A Renmin University professor who also serves as a Huawei corporate management adviser, Wu Chunbo, said the company’s first half 2013 net profit was 14.3 billion yuan.

With the company on a sound financial footing, management was well prepared to turn attention to making junior executive salaries more competitive, a Huawei representative said.

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