Chinese brands and their impact on the employment market

Chinese companies are becoming more aggressive in their growth plans as multinational corporations (MNCs) take a more conservative approach. What does this mean for businesses, and how can job seekers benefit?

The Chinese employer market is changing. MNCs are responding to reports of slower economic growth in the country by becoming more conservative in their approach. In the recent Michael Page 2016 Greater China Salary & Employment Outlook, just 25% of respondents said they thought hiring in MNCs would be stronger this year than last, compared to 34% who said it would be steady and 37% who think it will be weaker.

However, Chinese companies seem more bullish in their outlook. A full 42% expect stronger hiring this year, compared to 23% who think it will be weaker.

They also expect to give larger salary increases, with 19% of domestic firms expecting average pay rises to be more than 11%, compared to just 10% of MNCs who expect increases of that level.

Increasing attraction

Perhaps unsurprisingly, this has attracted interest from candidates, who appear increasingly willing to work for domestic firms. In fact, the 2016 Michael Page Greater China Employee Intentions Report showed that 80% of those surveyed would consider joining a Chinese employer brand.

Their reasons for doing so included career progression. MNCs typically offer candidates limited decision-making opportunities as control is typically centralised in overseas headquarters. However, employees in domestic firms tend to be closer to where decisions are made, hence having more scope to influence them. While this increase in autonomy is often a plus, candidates will still need to manage their own expectations and be mindful that domestic firms can veer towards a top-down approach at times.

MNCs also often require strong English-language skills, particularly in order for employees to progress to a senior level, and this can hold back Chinese candidates who lack the necessary ability. Local companies typically do not have this requirement and look for candidates with strengths in other areas that can help the business expand.

Lastly, Chinese start-ups also often offer stock options, which can be another strong pull factor for potential employees.

As our previous research in the 2016 Greater China Employee Intentions Report has shown, talented professionals from mainland China are aware that they can command significant salary increases during a job change — an optimistic takeaway despite the media reports of the region’s economic slowdown. The rise of domestic companies as strong employer brands is positive for the market, bringing more choice for candidates and greater competition for the best talent.

Download the 2016 Michael Page Greater China Salary & Employment Outlook, for insights into employment conditions, key employee skills in demand, sector trends and salary benchmarks in Hong Kong, mainland China and Taiwan.