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China - Employers forecast big pay rises next year

13 December 2013

Many Chinese employers expect to see as much as double-digit salary increases for their employees in 2014, according to the China 2014 Salary & Employment Forecast released by Michael Page and reported by China Daily.

A total of 63% of the 5,000-plus respondents from 700 corporations said they expect their average salaries to rise by 6% to 10% and about 18% of them expect the increase to be above 10%.

The top four job positions that are likely to experience a double-digit salary increase include procurement and supply chains, property and construction, engineering and manufacturing and technology. China's progress in building second- and third-tier cities is fuelling demand for skilled employees, which also has helped to bring about the likely sizable salary growth.

About 37% of the interviewees agreed that people in procurement and supply chain positions are very likely to see a double-digit salary increase, the highest of all the named disciplines, because most employers in China are attaching as much importance to companies' purchasing strength as they are to their sales forces, according to Richard King, managing director of Michael Page North & Eastern China.

"Engineering and manufacturing remain major areas of growth and development in China. Talented candidates have multiple options and the battle for talent in this area continues. In addition, China is growing much faster in terms of salary increases than the rest of the world," said King.

Wu Yue, the manager of Shanghai Zaiwang Steel Co Ltd, said the average salary of her company's employees will increase by 10% to 20% in the upcoming 12 months.

King added that technical roles such as research and development as well as quality control roles are gaining more emphasis because Chinese companies are becoming more technical and sophisticated to remain competitive in the market with higher quality goods rather than lower costs. About 55% of the surveyed employers in the forecast believe skill shortages will cause salaries to rise above inflation in the next 12 months.

Jay Tan, director of Michael Page East China, further explained that jobs are becoming more sophisticated in China. For manufacturing jobs, the salaries of blue-collar workers may not rise as quickly as those of research and development workers, he said.

There is a noticeable increase in the hiring activity of Chinese domestic companies and State-owned enterprises, the report noted. Meanwhile, qualified and talented marketing personnel are in huge demand, with 64% of employers expecting staff turnover in the next 12 months and 41% foreseeing a professional skills shortage, the report disclosed.

The trend is especially true in the digital marketing, social network and e-commerce sectors, King added. Xu Weiwei, director of Michael Page East China, said the company has witnessed the trend over the past decade in China, especially in the luxury retail industry.

"Quite a large number of our luxury retail customers have a rising demand for people in digital marketing. Domestic candidates have obtained the technical know-how but they lack the necessary bilingual and communication skills, which means qualified candidates for world-leading multinational companies are in great shortage," said Xu.

Simon Lance, regional director of the recruiting group Hays in China, agreed that social media is a hot topic in the human resources market. "In recruitment, social media and networking sites have become widely adopted and have contributed significantly to candidate engagement and relationship-building. In 2014 we expect most employers to look for human resources professionals with expertise in social media to take better advantage of this trend," he said.

In addition, hiring demand in China will remain robust in the upcoming year, with 75% of the surveyed employers expecting steady or stronger hiring activity and 45% anticipating higher staff turnover.

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