Category Comp, Salary & Benefit

Chinese salaries set to increase in 2013

It appears that salaries in China will be getting a boost in 2013 due to a steady growth in gross domestic product, according to London-based recruitment consultancy Robert Walters Plc.

In general, workers who chose to switch jobs will see their salaries increase by 15 to 25%, according to a survey conducted by the company. Those who are riding it out in jobs they already have will only see salary increases of approximately 8%.

In a report published in January by Global Times, business owners expressed concern about raising salaries. According to Feng Lijuan, chief consultant at 51job.com, a NASDAQ-listed human resources service provider, “Business owners are more concerned about a salary hike in 2013, as most of them have seen a worsening business performance, and feel uncertainty about whether the Chinese economy will get better this year.” In the fourth quarter of 2012, approximately 65% of small to medium size businesses didn’t increase salaries of their employees. This was an attempt to survive slow economic times by limiting labor costs.

The banking and financial services industries have felt the greatest impact from the global economic recession. This sector faced the challenge of trying to increase profitability and hire sales professionals, while simultaneously minimizing expenditures.

However, as China’s economy stabilizes, multinational banks are becoming increasingly interested in exploring areas of China beyond the traditional financial centers of Shanghai and Beijing. Such corporations are looking for employees with knowledge of the broader Chinese market.

According to Arthur Wang, managing director of Robert Walters China, “Candidates who could develop strong relationships with local clientele and possessed both overseas and local experience were particularly sought after and generally received average salary increases of 10 to 20 percent when moving jobs. Meanwhile, as Chinese financial institutions continue to increase their presence within the local market, we expect to see continued demand for local candidates with Mandarin skills.”

Inside China’s Economy: Shanghai Leads Office Worker Salary Rankings; Power Usage Up 5.5% January-February

Shanghai Leads Office Worker Salary Rankings
Shanghai has topped a white-collar worker salary list of China’s 24 largest cities, according to a report released by Zhaopin.com, a leading Chinese online job advertising site. The city’s ¥7,112 monthly salary for white-collar workers is followed by Shenzhen’s ¥6,787/month and Beijing’s ¥5,453/month. The three highest paid industries in Shanghai are energy/mining (¥9,711), automobile (¥9,644) and petrochemicals (¥9,218). The three highest paid industries in Shenzhen are telecom (¥8,488), finance (¥8,240) and energy/mining (¥8,220). The three highest paid industries in Beijing are telecom (¥7,633), real estate (¥7,095) and finance (¥6,950).

PBOC’s Zhou Says 20% of Local Govt Debts Are Risky
About 20% of China’s local government financing vehicles are not profitable and are vulnerable to risks, Xinhua reported, citing central bank governor Zhou Xiaochuan. Different from those funding major infrastructure and mortgages, 20% of local government financing vehicles are funding projects which are largely not profitable and the debts have to be paid with other incomes of local governments, according to Zhou. He called for further reforms to introduce new financing tools to ensure financial support for the country’s urbanization.

Money Rate Rises Amid Inflation Concern
China’s money-market rate rose to a one-week high after central bank governor Zhou Xiaochuan said the nation should be on high alert over inflation, Bloomberg reported. The CPI climbed to a 10-month high of 3.2% in February. The People’s Bank of China will sell ¥18 billion of 28-day repurchase contracts Thursday, which will reduce the amount of cash in the system and stem the rapid monetary growth. The seven-day repurchase rate, which measures interbank funding availability, rose 0.06 percentage points to 3.08% as of 10:45am in Shanghai Thursday.

Power Usage Up 5.5% January-February
China’s electricity consumption fell 12.5% year on year to 337.4 billion kW hours in February 2013 due to the Chinese New Year holiday, the National Energy Administration said. Between January and February, electricity consumption was up 5.5% to 789.2 billion kW hours, including 12.8 billion kW hours by the primary sector (up 4.3%), 552.8 billion kW hours by the secondary sector (up 4.2%), 106.8 billion kW hours by the tertiary sector (up 13.8%) and 116.9 billion kW hours by civilians (up 4.7%). A total of 6.48 million kW of new power generation capacity were installed during the two months, including 3.4 million kW of coal-fired capacity and 1.56 million kW of hydropower capacity.

Railroad Investment Jumps 26% January-February
Fixed-asset investment in China’s railways totaled ¥37.63 billion in the first two months of 2013, including ¥25.14 billion in rail infrastructure, up 25.7% and 20.9% respectively from the same period of last year, said the Ministry of Railways, which is soon to break up and merge with the Ministry of Transport. The strong growth came after the investment in the sector remained sluggish throughout 2012 following a deadly high speed train crash in 2011. Chinese railways are expected to receive ¥650 billion in total fixed-asset investment this year, including ¥520 billion in rail infrastructure.

Deal-of-the-Day Turnover Exceeds ¥2.3b in January
Turnover at Chinese deal-of-the-day websites added up to ¥2.32 billion in January 2013, up 7.5% from a month earlier and up 72% from a year earlier, according to Tuan800.com, a site that collects information about such deals. 46.6 million people purchased deal-of-the-day coupons in January, up 4.4% from a month earlier and up 33.9% from a year earlier.

Hong Kong losing its lustre as mainland Chinese firms raise pay

Big mainland cities like Shanghai are ratcheting up the pressure on Hong Kong on a new front – enticing professionals and specialists with higher pay and perks as the salary gap between the two narrows.

According to British recruitment agency Hays, 47 per cent of mainland-based businesses increased salaries by more than 10 per cent last year, compared with only 4 per cent in Hong Kong.

A Hays survey of 1,200 employers in Asia, including those in Hong Kong, the mainland, Japan and Singapore, showed that a chief financial officer on the mainland could earn up to 2.5 million yuan (HK$3.1 million) a year, beating a Hong Kong counterpart whose annual income tops out at HK$3 million.

“China led Asian countries in terms of salary growth despite uncertain economic conditions in other parts of the world,” said Simon Lance, regional director for Hays in China. “Competition in the job market is fierce and it is a salary-driven market.”

The British company said talented executives worldwide, including expats and overseas Chinese, were increasingly looking to relocate to the mainland.

Skill shortages remain a stumbling block to foreign companies’ aggressive expansions in the mammoth market, with 30 per cent of employers saying they planned to further raise salaries by more than 10 per cent this year.

The Hays survey showed that 93 per cent of employers were worried about a shortage of skilled workers, which would hamper their business growth.

But Lance said the trend of more professionals being drawn to China by increasing pay packages could be reversed. China’s higher personal income tax, difficult business environment and poor food-safety record could emerge as primary concerns, he said.

The performance of foreign businesses in China has declined as they fall victim to rising labour costs. A survey by the American Chamber of Commerce in Shanghai revealed recently that US companies reported profit drops for a second consecutive year last year due to rising costs, tougher competition and a slowing economy.

50% of Women Job-hop for Staff Benefits

According to the results of a recent survey on Chinese working women, about 40 percent of interviewed women were unsatisfied with their latest salary adjustment and 50.7 percent said that they usually switch jobs because of job benefits.

The survey interviewed more than 1,700 employed people nationwide in February 2013, including more than 770 working women. Statistics show that 44 percent of the women interviewed had hoped for a salary increase of more than 20 percent, but only 7.1 percent achieved that goal.

In the wake of salary adjustment disappointments, 44.9 percent of women said they would look for new job opportunities, 22.8 percent would work harder and 18.9 percent would have a discussion with their bosses.

In addition, 7.1 percent would choose to keep silent about it, a higher percentage than men. This may be because women tend to be more careful about interpersonal workplace relationships than men.

Women of different ages also differed in their attitudes towards the salary adjustment gap, with more women born in the 1970s saying they would keep silent about it. Women born in the 1980s were more likely to work harder, but those born after 1985 were also more likely to change jobs immediately.

When it came to job-hopping, 59.9 percent of interviewed women said they planned to change jobs in the next three months, six months or one year.

For many women, having to balance work and family means that job benefits become increasingly important as they get older. For example, they are more likely to accept a lower salary in exchange for more vacation days.

Statistics also show that 69.6 percent of interviewed women would look at foreign companies first for job opportunities, 20.9 percent would prefer state-owned enterprises and less than 10 percent would choose private enterprises. In general, people believe that foreign companies offer better job benefits.

Experts have suggested that women also pay attention to industry prospects, developmental trends, company management and other factors that may affect their career development within a company.

Income inequality on the rise in China

Although statistics are sketchy, the chasm between rich and poor seems to have widened in China.

Shanghai, China – This country’s economic boom has lifted millions of its citizens out of poverty and led to predictions it will become the world’s largest economic power by 2030. However, while China’s GDP has increased, so has the gap between its wealthiest and poorest citizens, placing the country among the most unequal nations in the world, according to a study by a Chinese institute.

China’s Gini coefficient, a widely accepted measure of income distribution, reached 0.61 in 2010, according to findings by the Survey and Research Centre for China Household Finance. A score of zero represents perfect equality while a score of one represents total inequality, with one individual possessing 100 percent of a country’s income.

Inequality is starkly visible in large cities such as Shanghai, where Lamborghinis and Porsches are a regular sight outside expensive restaurants, while beggars sit on the pavement with plastic cups looking for change. In the shadow of looming skyscrapers lie cramped dormitories for migrant labourers who work on some of the world’s most expensive properties.

“There is a huge gap between rich people and ordinary people in China,” said Yang Zhang Yi, a retired worker, as he was waiting for a subway train in Shanghai. “Maybe the government should pay more attention on … how to tax the rich people and reduce the taxes for the poor people.”

The Chinese government has not released official Gini coefficient figures since 2000, when they put the figure at 0.412. In 2012, the National Bureau of Statistics said it was “slightly higher than 0.412” in 2010, but didn’t give an exact figure, reported Xinhua, the Chinese state news agency. In March, Bo Xilai, the now ousted former Communist Party secretary of Chongqing, said that the figure had exceeded 0.46.

The World Bank, in a report published in February, cited income inequality as one of the main challenges facing China. The report stated that “the sustained increase in income inequality places China at the high end of income inequality among Asian countries”. The World Bank hasn’t issued Gini coefficient figures for China since 2005, when it estimated it to be 0.425.

Chinese estimates of the country’s Gini coefficient have varied considerably. For example, in September, the International Institute for Urban Development in Beijing calculated China’s Gini coefficient to be 0.438 in 2010, much lower than the Survey and Research Centre’s result. Professor Gan Li, the centre’s director, said he could not explain the differing figures but added that their study, which surveyed 8,400 households, was the first to publicly release all its data.

In an interview with the Communist Party-owned Global Times newspaper, Zheng Xinye, a professor at Renmin University, said the real figure may be even higher than 0.61 – as it is difficult to survey the super-rich in China. He blamed the widening income gap on “restrictions that kept small and medium-sized companies from entering high-profit sectors, as well as by employment discrimination”.

However, Professor Martin Whyte, a sociologist at Harvard University who has carried out research on attitudes towards inequality in China, said he found the figure of 0.61 hard to believe. “The best survey research on income gaps leads to the same conclusion that the figure [Gini coefficient] is rising but is nowhere near these sort of figures,” he said.

Regional differences

Inequality may also have increased between the country’s wealthy east coast, where the major cities of Shanghai and Beijing are located, and the rural interior. Earlier this year, the gap between urban and rural areas was highlighted with the news that students in an area of Hubei Province had to provide their own desks for school, in stark contrast with the air-conditioned schools in the country’s largest cities. The gap between urban and rural incomes is about 26 percent higher than in 1997 and 68 percent higher than in 1985, according to a report by the Chinese Academy of Social Sciences.

More than half of China’s workers now live in urban areas, as rural migrants move to cities for better employment options. According to official figures, there are now 252 million migrant workers, many of whom now live in the country’s cities. They usually are not entitled to healthcare, a pension or free education for their children under China’s household registration system or hukou, which divides citizens into urban and rural residents and allocates public services accordingly.

Whyte said one of the reasons for inequality in China is the divide between rural and urban Chinese. “Other countries don’t have a system like the hukou and the caste-like system it produces,” he said.

The Chinese authorities have made pledges to reduce the gap between rich and poor and to address corruption. In his opening address during the Communist Party Congress in November, President Hu Jintao made an ambitious target for 2020 to double per capita income from 2010 levels for both urban and rural dwellers. And in October, the State Council said it would draft a plan to reform the current income distribution system.

The level of income inequality is “largely because China has very little income transfer. The government used resources to build investment infrastructure,” Gan said. “It is time for the Chinese government to change its spending priority from infrastructure to income transfer and social welfare programmes.”

In an article for the Economic Observer, Sun Liping, a professor at Tsinghua University, reffered to research estimating that there were 180,000 protests, riots and other mass incidents in China in 2010. However, it is not known if any were directly related to income inequality, and Gan said he had found no evidence that the figure of 0.4 was a warning line for social unrest. But he added: “There is lots of research saying that it is not income inequality per se that affects social instability, it is unequal opportunities. If there [are] vastly unequal opportunities, people will feel unsatisfied.”

He believes that while there is room to improve, there “is a lot of social infrastructure in China that still works … It is getting worse but the situation is not at the tipping point”.

Income inequality will be one of the main challenges facing the country’s new leaders, who will formally take power in March. The wealth of China’s elite is controversial, and has recently been the subject of several foreign media investigations.

In December, Bloomberg exposed the vast fortunes of the offspring of China’s founding fathers, while earlier last year it also published an investigation on the business interests of the extended family of Xi Jinping, the soon-to-be president of China. The New York Times also published an investigation into the wealth of the family of prime minister Wen Jiabao.

While income inequality is a major issue for Chinese citizens, commuters in Shanghai had confidence in the Chinese government’s ability to solve the problem. “There is now a limitation of the top salary,” said Sun Xue Hong “For the poor, the government is trying to increase their salary at the same time. So this way the gap can become smaller and smaller.”

And one young professional who gave her name as Alice said that, while the chasm between rich and poor has grown, she believed “the new government will take measures to narrow this gap”.

“I am not sure about all Chinese people,” she said. “But I am more confident now and I get more confident that these problems can be sorted out.”

Building on his article in the month’s Global Recruiter, Max Price, Partner at Antal International, China gives a view on the recruitment sector in 2013

We all know there is plenty of information in the international and local press about how the economy and therefore the jobs market is slowing down. 2012 saw the lowest rate of GDP for some time and of course this will concern people. What we need to remember that a GDP of well over seven per cent is huge, and that over Q4 GDP rose again, so all of the signs are positive that growth will continue. Foreign direct investment in China is also expected to remain steady. As recruiters we are in a unique position to be in regular contact with the hiring departments within multinational and local business as well as being in contact with the local talent pool and this piece is based around the feedback from both sides.

China is a completely candidate driven market still and this will continue in 2013. What seems to be different is the company and candidate will value each other differently based on the previous few years in China, and this is where problems can occur. Candidates at the moment have lots of questions that need to be addressed before we get to the employers side of 2013. The Chinese workforce is still active in the employment market and is still one of the most active candidate markets in the world. By active I mean that the majority of employees out there will be interested in speaking to companies about their opportunities and are approaching companies and recruitment consultancies directly to see what is available for someone with their skillset and experience. The average recruiter in China will receive well over 100 applications a day from candidates directly or through mediums such as Zhaopin.com. Candidates are looking for exciting new challenges at all times and this will have a huge affect on the 2013 job market, as it has done towards the end of 2012.

Over the last six months there have been two main candidate observations during their interviews with companies. First of all, companies are taking longer in hiring decisions and secondly, companies are not offering the salary increases that are expected. There are other observations but these two are most prevalent and a lot of candidates say the same. Both of the above mentioned points are true, companies are taking longer to make decisions and companies aren’t offering the same salary increases as before as will be address later in the article. The fact that a lot of candidates are experiencing this adds to the impression that there is some looming financial crisis in China and that everyone should be panicking about their job security. Job seekers talk to each other regularly, candidates that are being headhunted let their friends know that they have been approached for a great new job, it is human nature. As these interview processes talk longer or the packages aren’t what candidates expect this information doesn’t just stay with them, it spreads around their circles, and then their friend’s circles like a virus. A virus spreading the self fulfilling prophecy of a crash in the jobs market in China which simply isn’t true. There will be changes in 2013 but change is good providing companies and candidates are well educated about the change.

Our job is to speak with hiring managers and HR professionals every day and the good news is that the vast majority of companies that actively engage with recruitment companies are expecting headcount growth in 2013. These companies range from multiple industry sectors, from Automotive to Luxury goods, from technical IT to Banking, from Retail to Construction. Certainly some of these industries are expecting lower growth than others, the construction industry is going to be relatively slow whereas the retail market, especially middle to high end luxury retail, is going to boom, but the common theme here is that all will be hiring, increasing headcount, and they all expect to have significant replacement recruitment to do as their employees move on to pastures new. As you can see it’s so far so positive for the job market, however there are snags. The points that candidates raised are valid, decisions take longer and the same increased salaries aren’t being offered and it is going to take some time with the two groups to come to agreement with that. Over the past few years the market has boomed in China, jobs outnumbered skilled employees and as candidates were originally underpaid their new companies were happy to give 30-50 per cent salary increases in order for a talented individual to move to them. The problem with that was that this war for talented individuals meant that professionals were moving again 9-12 months later for another 30-50 per cent increase and the cycle repeated itself again and again. It is not uncommon to see a CV with six different companies in an eight year career, the problem for candidates is that this is no longer acceptable to a rising number of companies.

When the boom in China took place, MNCs didn’t seem to care so much about backgrounds, providing someone could do the job required they would be hired and companies paid what was needed. Now that salaries are at an all time high in the Tier 1 cities and there is a very slight pinch in growth in China, MNCs and local companies alike are looking for their growth to come from increased performance from their people, in order for companies to get this increase they need to have time to train and develop them and this is where the two candidate points come into play. As we all know the standard job cycle globally runs in three stages, Year One – Learn your job, Year Two – Get good at your job and Year Three – Get bored.

The problem in China is that employees have been completing year one, then moving on to start the cycle again. As an employer you don’t really get much return on the investment of hiring until after year 1 has passed and it’s something that can no longer be tolerated. The reason why interview processes and hiring decisions are taking longer is because employers want to be sure that this candidate is right for their business, the candidate will stay and develop, and eventually add value to the organisation. Companies will intentionally delay interview procedures because they want to see that a candidate is truly interested in the role and the company, not the paycheck. This reasoning is true for the lower salary increases. Increases are still good compared on a global scale, an average of 17 per cent salary increase when moving job is fantastic, but nowhere near the same amount it was one year ago.

Companies will pay for the right people, and some large increases are still being offered, but not to candidates that have moved three times in the last four years as there is a huge risk in hiring someone that is likely to leave in nine months. The disruption to the team and the monetary cost of a bad hire is potentially devastating. Another point to mention here, though slightly off topic is Year Two. This is the stage that most job seekers in China have not been completing over the last few years, this means that a staggering number of candidates have the title of manager, or director, or senior partner etc without actually completing the required tasks to be proficient at the job. Extra rounds of interviews are being brought into a standard process in order to check this ability on a hands on level rather than theoretical and things like assessment centres are now becoming common place.

Moving to a linked topic to this, if, as an employer, you are offering less than the job market expects and are taking longer than normal to make your hires how do you attract people? The answer is in training and development. 51 per cent of candidates are more interested in in-house development than salary because of the experience over the last few years where this hasn’t been evident. Over the last six months the increase in demand for training and development specialist from HR departments has been huge across China and large amounts of vacancies at Manager or Director level insist on having someone who has experience in training and developing subordinates, some companies will actively get references from previous subordinates before extending an offer to a candidate.

In summary, 2013 will still be a great year for the job market, but job seekers and employers need to understand the market is changing and it wont be going back to the way it was which is not a bad thing.

Aon Hewitt: Chinese Employees Saw Average Salary Increase of 9.1%, Turnover Rate of 18.9% in 2012

Release date- 03012013 – Aon Hewitt, the global human resource solutions business of Aon plc (NYSE:AON), recently released the research findings of its 2012 China Human Capital Intelligence Report that comprises indicators of remuneration trends by industry sectors and the latest developments in human resources.

The research involves more than 10 key industries, including real estate, financial, pharmaceutical and medical equipment, high technology, automobile, consumer products, retail, chemical products, logistics and manufacturing, covering over 4,000 foreign-invested and leading local enterprises in Beijing, Shanghai, Guangzhou and Shenzhen, as well as major second and third-tier cities.

Both the national average salary increase and turnover rate show increase trends

Aon Hewitt’s research showed increased trends in both the national average salary increase and turnover rate in China for 2012. The 2012 national average salary increase was 9.1 percent, which was closely mirrored by a high turnover of 18.9 percent. In the four first-tier cities, the average salary increase in the manufacturing sector was 10.1 percent in Guangzhou, 9.8 percent in Shanghai, 9.8 percent in Beijing and 8.9 percent in Shenzhen. Average salary increases for the non-manufacturing sector were 9.5 percent in Beijing, 9.3 percent in Shanghai, 9.1 percent in Guangzhou and 8.9 percent in Shenzhen. Both the average annual salary increase and turnover rate in second and third-tier cities were higher than the national average. Aon Hewitt’s research showed the gap between the inland and the coastal areas, where most investments are concentrated, is gradually narrowing. Salaries for front-line workers, for example, who are the object of an intense war for talent, saw less than a 5 percent differential between the second and third-tier cities inland and the second-tier cities in coastal regions.

Aon Hewitt’s China 2012 Human Capital Intelligence Report showed an overall salary increase of 7.9 percent for the real estate industry, slightly lower than in 2009 and 2010 when the new regulation was not yet in effect, Salary increases in this industry are expected to slow down in 2013. In 2012, the job category witnessing the greatest expansion was ‘Sales and Business Development,’ which has increased by up to 42 percent only in Shanghai. According to Aon Hewitt, this is mostly due to new strict regulations that push residential real estate companies to transform into commercial real estate businesses. It can be expected that the demand for this job title will remain high in 2013.

Talent availability in the second and third-tier cities tightened and human resources risk index rose sharply

Aon Hewitt’s research shows that the conventional talent pool in second and third-tier cities has been rapidly diluted by the high level of salary increases and turnover rates, resulting in continuously increasing risk affecting human resources. In Chongqing and Nanjing, for example, the voluntary turnover rate in 2012 was 22.3 percent and 19.4 percent respectively (up from 9.6 percent and 7.3 percent respectively in 2006). Another key industrial city, Wuhan, is highly coveted by investors due to the availability of abundant educational resources. However, with the war for talent intensifying, the turnover rate has climbed from 9.4 percent in 2004 to 14.2 percent in 2012. According to Aon Hewitt, such a high turnover rate leads to high recruitment and training costs for employers and stagnation of the talent supply chain, bringing new labor and business issues to enterprises invested in Wuhan.

According to Peter Zhang, Global Partner and Vice President of Aon Hewitt Greater China, ‘High salary levels pushed up by high cost of living in coastal cities result in the relocation of a large number of manufacturing Research & Development units to the inland, causing shortage of talent supply. On the basis of a constant pool of talents, the intense war for talents has directly led to a remuneration escalation and high turnover of employees. However, with the eventual saving in personnel costs and operations, it will be an irresistible trend to move to the inland for closer connection to various partners and integration with the supply chain. Likewise, in the process of moving to the inland, new considerations related to the local hiring of mid-level management positions (versus importing them from coastal cities) must be taken into account to keep the costs of salary and benefits under control.’

The high turnover rate impacts the sectors of domestic consumption
Aon Hewitt’s research shows that industries of domestic consumption, such as the retail and fast-moving consumer goods sectors are impacted by the high turnover rate in China. Turnover rates in 2012 were 31 percent in retail, 26.6 percent in high-tech/manufacturing, 19.5 percent in fast moving consumer goods and 19.2 percent in the health care industry. High salary increases keep in direct proportion to high turnover rates, at 9.1 percent, 9.6 percent, 9.65 percent and 9.5 percent respectively.

Peter Zhang said, ‘Remuneration is always the barometer of a sector. Our figures clearly demonstrate that these four industries are bearing the brunt of the evolution in the human resources market caused by the industrial expansion. According to Zhang:

In the retail sector, the change in sales channel and consumption habits forces major traditional retail businesses to try to expand online with an imminent demand for talent transformation.

The high-tech/manufacturing sector is also experiencing the pain of industrial upgrading. The development from low value-added OEM (Original Equipment Manufacturer) processing to the manufacturing of products with independent design patents has generated a battle for high-quality talent extending from the research and development of products to packaging design, to skilled front-line workers.

Fast moving consumer goods are particularly sensitive to the right pricing. With the soaring cost of raw materials, a greater importance needs to be place on employee productivity and on a strong understanding of the demand for talents in the market.

The health care sector is known as one of the hottest sectors in China. However, according to Aon Hewitt’s 2012 survey results, this trend is stabilizing. After years of rapid growth, the health care industry is looking at re-evaluating its structure and sales strategy. With the injection of more domestic and foreign funds in this industry, and the dependence of sales channels in the second and third-tier cities, the upgrading of sales means and localization of product development are bound to bring a new round of competition for talents.’

The generation born in 1980s (Gen Y) constitutes the main force of the talent market, while the demand for employees remains diversified

Aon Hewitt’s 2012 China Human Capital Intelligence Report found that the generation born in 1980s (or Generation Y), which has been known as the new force of the workplace for many years, has become the main age component in the current talent market. Compared with 2007, the proportion of employees born in the 1980s is growing at a rate of almost 40 percent. Currently, the average proportion in various sectors has exceeded 65 percent. In some industries and functions, such as production of the high-tech manufacturing sector, the proportion has reached up to 80 percent. The new generation born in 1990s also has grown to be another large group in the workplace. At management level, the diversified age structure of employees has also created new demands. Aon Hewitt believes selecting the correct means of communications and incentives to improve these groups’ engagement and optimize their performance has become an important area of concern for management.

Peter Zhang concluded, ‘As China’s economy has entered the stage of medium-speed development, the impact on the industry is also reflected in the slowdown in sales. For example, the health care sector which has always maintained a high growth in sales has seen its sales rate decrease by 5 percentage points in 2012 compared to 2009. However, enterprises will never stop seeking maximal profits. In the short-term with continuous increase in personnel costs, the improvement in productivity has become the only way to realize sustainable development in enterprises.’

About Aon Hewitt

Aon Hewitt is the global leader in human resources solutions. The company partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance. Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies. With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees. For more information on Aon Hewitt, please visit www.aonhewitt.com/apac.

About Aon

Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 62,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world’s best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit http://www.aon.com for more information on Aon and http://www.aon.com/manchesterunited to learn about Aon’s global partnership and shirt sponsorship with Manchester United.

Man pays Chinese company one fifth of his salary to do his job for him

A US employee is said to have outsourced his job to China.

A security check on a company revealed that a member of staff had been paying a fifth of his six-figure salary to a firm in Shenyang to do his job for him, reports BBC News.

The software developer spent his work day surfing the web, YouTube and eBay.

Andrew Valentine of operator Verizon said that the scam came to light when the US company asked Verizon for an audit after a suspected security breach and asked the risk team to investigate some irregular activity on its VPN logs.

An active VPN connection was found from Shenyang to the employee’s computer and Verizon was called to look into what was thought to be malware used to share confidential information with China.

The employee’s computer contained hundreds of invoices from the Shenyang contractor, it has been reported.

Valentine said: “Authentication was no problem. He physically FedExed his RSA token to China so that the third-party contractor could log-in under his credentials during the workday.

“Evidence even suggested he had the same scam going across multiple companies in the area.

“It looked like he earned several hundred thousand dollars a year, and only had to pay the Chinese consulting firm about $50,000 annually.”

China’s Foxconn Worker’s Still Aren’t Earning Enough Money

Foxconn, one of China’s biggest electronics manufacturers and the maker of most Apple products, has been at the center of a number of labor scandals in recent years. However, employees at factories are hoping to work even more hours than they already do as they seek to make a decent wage.

According to the Wall Street Journal, last year the Fair Labor Association went to Foxconn factories to take an audit of the manufacturing giant’s work shifts and found that employees there were working 12-hour shifts, and sometimes even longer. According to the Atlantic, the regular work days of employees exceeded the legal limit in China of 40 hours per week and a maximum of 36 hours of overtime per month. As a result, Foxconn pledged to reduce available hours for workers to a maximum of 49 hours per week, including overtime.

Now, Foxconn employees are asking to be allowed to work more overtime hours because they claim they are not making enough money, even when working the new maximum number of hours. More than 15 Foxconn workers were interviewed, and they all claimed they already work between 10 and 15 overtime hours a week, exceeding the legal limit, and would work even more if given the opportunity.

Many of the employees at Foxconn are originally from rural areas and have come to the factory located in southern China, near Hong Kong, to earn and save money quickly to send back home. However, limiting the amount of hours they can work also limits the amount of money they can bring home.

The best solution to prevent overworking employees, and thus hopefully avoid another spate of employee suicides, would to be raise hourly wages. Foxconn has reportedly increased hourly pay three times this year. Now, the base pay of an employee is around 2,200-2,500 yuan a month ($350-$400), up from the previous 2,000 yuan ($321). At that rate, working regular hours does not satisfy employees who end up still working brutal 15-hour shifts. The pay increases do not equal the potential earnings that employees used to have.

One worker identified only as Ma was quoted by the Wall Street Journal as saying that by working overtime, he was able to double his monthly wage to about 5,000 yuan ($800), exceeding the legally prescribed limit.

Now, the problem may become Foxconn’s. The electronics manufacturing company may have a tough time retaining its 1.5 million employees once the new hour restrictions are rolled out next year.

Ma is one of those people who does not think his increased regular pay will make up for the cut hours.

“We don’t know how much our salary will go up. But after being here three years, I don’t have much incentive to stay, since my wage probably won’t rise much,” Ma said in the report.

And Ma is not the only one who may leave. After all, the goal for many is to make as much money in a day they physically can, not necessarily having job security. Foxconn did not comment on what it planned to do to retain its employees, but Bernstein Research estimated that the base salary of employees would have to be increased by 50 percent to compensate for cut overtime hours.

For now, Foxconn has improved the facilities’ working and living conditions. With dormitories that room friends together, recreational facilities and mental-health professionals on-site to counsel employees, and even high school and college education courses on-site as well, the company hopes that these other benefits will be appealing enough to retain employees.

Labour Unrest and a Slowing Economy in China: Unpaid Wages Spark Strikes

In a clear sign of a slowing economy, many employers in China, including foreign-owned factories and state-owned enterprises, have been unable or unwilling to pay their employees for months. Strikes and protests by workers have erupted to demand unpaid wages.

On December 10-11, more than 1,000 subcontracting workers at Eastern Heavy Industries in Jiangsu province’s Jingjiang city struck over the company’s failure to pay them for 5 to 6 months. Workers rallied at the Shanghai-Beijing expressway, causing massive traffic jams and forcing municipal officials to negotiate. The next day, the shipyard, under pressure from the local government, was forced to pay some of its wages and bills

Singapore-based JES International, which owns the shipyard, justified the non-payment by blaming the subcontractors, who often hire migrant workers and delay payments to prevent them from leaving without notice. The company also stated that it needed working capital, as the number of ships under construction was high and some clients were asking for delayed delivery dates.

In reality, recent data from China’s National Shipbuilding Industry shows that the number of new orders in the first 10 months this year was down nearly 50 percent, compared to the same period last year. In the first nine months of this year, profits for large shipbuilders were down 40 percent. Several leading shipbuilders, including the largest private-owned shipbuilder in Chongqing, Jinglong Shipbuilding, collapsed in the first half of 2012.

The Hong Kong-based China Labour Bulletin reported that several thousand Eastern Heavy Industries employees had also been unpaid for five months. One worker said the management had warned them not to join the subcontractors in striking, or they would be fired. Some of the workers, however, indicated that they would take action if they were not paid by the end of the year.

The Chinese Communist Party (CCP) regime is once again resorting to police-state measures against workers. In the aftermath of the subcontracting workers’ strike, contingents of police vehicles have been at the shipyard each day in an attempt to intimidate the workforce and prevent further stoppages.

A 12-day strike by 600 workers at a shoe factory in Foshan in Guangdong province ended on December 22, after they were forced to accept half the payout they had been demanding. The stoppage at the Shyang Ho Footwear began on 10 December after its private owner prepared to sell the factory and move to the inland city of Chengdu, where labour is cheaper. The workers demanded the compensation required by law, namely one month’s salary for every year of employment.

Workers occupied the plant in order to prevent the removal of equipment. But the government sent in hundreds of armed police to stand guard as the management shipped out the factory’s assets. The collapse of the company, which was a leading shoe maker in Foshan during the 2000s, symbolises the crisis of China’s export-led growth. Following the 2008 global financial crisis, many export enterprises went bankrupt. Those that survived, like Shyang Ho, slashed costs.

On December 20-21, over 1,000 workers at the South Korean-owned Dongguan Samkwang Science & Technology, which makes mobile phone parts, went on strike over low wages and poor conditions. Large numbers of armed police and security guards were sent to suppress the stoppage, leading to injuries and arrests of workers.

On Monday, 4,000 workers at the Hong Kong-owned Wong’s Electronics Co in Shenzhen downed tools over the lack of compensation for the “restructuring” of the company, which changed its name and legal representative. Large numbers of police were deployed at the factory. On Wednesday, workers marched to the local Shajing township government with banners demanding justice, but the authorities responded with more armed police.

Demonstrations have also taken place at state-owned enterprises. On December 25, more than 1,000 workers at a subsidiary of China’s largest paper mill, Chengming Papers, blocked the junction of two major bridges in Wuhan city to protest against the factory’s closure and unpaid wages. (See photo). Elite “Special Police” contingents were deployed to suppress the strike, resulting in injuries to 30 people, according to the dissident web site, the China Jasmine Revolution .

The web site explained that the protests were part of a month-long struggle by employees, who had been unpaid for half a year. The loss-making company had sold its land but did not want to compensate the workforce. Instead it pressured workers to transfer to distant subsidiaries, with very low pay of just 1,000 yuan ($US160) a month. Workers said the purpose was to force them to resign.

On December 25, hundreds of doctors and nurses from a hospital belonging to a major state-owned enterprise, the Tongling Nonferrous Metals Group, blocked one of Tongling city’s main junctions to protest against the non-payment of six months’ wages.

Social unrest is set to grow in the aftermath of the CCP’s 18th Congress in November. The congress adopted a pro-market economic agenda that includes the privatisation of some of the 100,000 remaining state-owned enterprises. Newly-installed CCP general secretary Xi Jinping recently completed a “Southern Tour” that mimicked that of former leader Deng Xiaoping two decades ago, during which Deng accelerated the process of capitalist restoration in China. Xi’s tour was designed to reassure the business elite and foreign investors that his administration will press ahead with pro-business policies.

Just after Xi completed his tour, workers in Deng’s home town of Guang’an city, in Sichuan province, held a protest over two and half months’ of unpaid wages. Around 200 workers from a Korean-owned knitting factory, Hanmei, struck on December 21. After the factory manager fled to avoid a confrontation, workers rallied at the City Hall, appealing for authorities to step in. Instead, the local government mobilised hundreds of riot police to violently disperse the protests. Six workers were injured and two reporters were detained.

The violent suppression of workers in Deng’s home town was designed to send a strong message that the new CCP leadership will not hesitate to use police-state repression to enforce its socially-regressive pro-market reforms