Hiring expectations in China
International hiring expectations have fallen across Asia, but China is an exception. The latest report shows that they are rising in China. About 55 percent of respondents planned to increase their headcount in the third quarter, compared with 52 percent in the previous quarter. But on a yearly basis the rate has dropped. In China, 60 percent of employers wanted to boost their headcount in the third quarter last year.
The salary inflation the employers face in China is the highest in Asia. Only 8% of respondents are negotiable for the new managerial hires.
The Asian edition of Hudson’s quarterly report was launched in 1998. Its premise is that employer expectations of staffing levels reflect the general industry outlook. Over 2,600 key employment decision makers from multinationals of all sizes in all major industry sectors were surveyed for the report, with 708 of the executives based in China.
“China is the only market surveyed in Asia where employment expectations are rising this quarter, reflecting that the market is still buoyant, so employers have little scope to negotiate lower new-hire salaries, and few are experiencing any reduction in staff turnover rates,” Angie Eagan, general manager of Hudson Shanghai, said.
The banking and financial services sector expected seriously that the head count growth forecast at 64 percent, compared with 57 percent in the March-June period.
Hiring is picking up after a period of consolidation, but the biggest increase in hiring expectations was in the consumer sector, which went from a 45 percent forecast for headcount growth in the last quarter to 60 percent this quarter.
The peak season for the consumer sector is the third quarter. And the retail and hospitality sectors were boosted. Tourism was expanded during the Olympic Games in Beijing.
The biggest problem for employers in China is still salary inflation. Only 8 percent of survey respondents across all sectors said they had negotiated lower salaries for new managerial hires. Companies in the manufacturing sector were the most confident about paying less to new hires. That’s mainly because the expatriate and Chinese returnee candidates are offered local remuneration packages.
There are fewest respondents who said they could negotiate on wages in media, public relations and advertising sectors. Candidates would like to receive multiple job offers.
35% of the employers had cut wages by 1 to 5 percent, while 52% had offered 6 to 10 percent less.
The market is still longing for skilled and talent candidates who make employers can’t decrease the new hires salaries.
Employers in China still face high turnover rates, with 71 percent of respondents saying there has been no reduction in the past year — the highest figure for all Asian markets surveyed, including Hong Kong.
The buoyant market still needs skilled candidates and applies many opportunities for them. So the employers in China have to face the staff turnover.
Many employers in the sector, particularly international banks, have developed human resources strategies to retain employees. The information technology industry, in contrast, had the highest turnover rate with only 15 percent reporting lower staff turnover in the past year. Many in the industry tend to swap jobs regularly, to work with new products or systems.
The effective ways for companies to retain talented staff is performance-linked bonuses, training and development programs. 30% of the respondents said they offer performance bonuses, while 26% use training programs to retain the staff. And the third most popular way used to encourage staff to stay is increasing the pay, offered by 24% of the survey respondents.
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China is one of the world’s great growth markets and is likely to be for many years to come. Foreign companies often face difficulties in assessing Chinese market demand and enacting effective strategies because of the language barriers, culture differences, and high expense.
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