Double-digit salary increases and high employee turnover forecast across China in 2014

12 December, 2013: Double-digit salary increases and high employee turnover are the two greatest challenges companies will face in China next year, according to The China 2014 Salary & Employment Forecast published today by Michael Page, a worldwide leader in specialist recruitment. Average salaries in China will increase 6-10% over the next 12 months. Fast-growing sectors such as procurement & supply chain will be hardest hit, with 37% of employers likely to offer double digit salary increases in the year.

Top four professional areas that are likely to experience a double-digit salary increase in terms of percentage include procurement & supply chain (37% of employers), property & construction (31% of employers), engineering & manufacturing (25% of employers) and technology (25% of employers). Salary increases are attributed to robust business growth forecast in China next year.

“Engineering and manufacturing remain major areas of growth and development in China. Talented candidates have multiple options and the war for talent in this area continues,” said Richard King, Managing Director, North & Eastern China, for Michael Page.

The annual survey of employers in China includes responses from companies ranging from market leading multinationals to small and medium sized enterprises. Some 700 respondents shared forecasts for salary increases, employee retention, bonus payments and recruitment activity.

Continued economic growth across China is leading to a severe skills shortage across a range of sectors. In 2014, employers will fight to fill roles in vital areas such as supply chain and logistics management. China’s progress in building second and third-tier cities is fuelling demand for skilled employees. That leads to double-digit salary growth.

The Michael Page 2014 China Forecast brings good news for wage-earners and challenging news for employers. “Financial rewards remain the number one priority for jobseekers, although company culture, career development and training are gaining ground,” explained Richard King.

According to responses in the annual survey, ‘job hopping’ will be the biggest challenge facing employers next year in China. Expectation of staff turnover in the coming 12 months reaches 45%. Sales professionals are likely to prove the least loyal, with 70% of employers predicting turnover of sales staff in the coming 12 months. Technology and marketing are also expected to be hard hit, with 69% and 64% of surveyed employers expecting staff turnover respectively

In other survey findings, respondents linked over-time work and bonus increments. Professional areas such as financial services and legal require significantly longer working hours than other areas. Employers foresee the average work week to exceed 45 hours (51% in financial services; 48% in legal), with 25% of employers (financial services) and 16% of employers (legal) expecting the average percentage bonus of gross salary to be more than 30% in order to retain professionals.

The marketing profession faces a challenge in 2014 in terms of a professional skills shortage according to 41% of surveyed employers, as well as high staff turnover (64% of employers). Consequently, the majority of employers surveyed (88%) indicated there will be a double-digit soar in average percentage bonus of gross salary for staff retention.

“The continued economic success of China is placing real strain on companies. Retaining staff, keeping up with wage demands and finding the right skills will be the biggest recruitment challenges in China in 2014,” said Richard King. “At Michael Page, we understand the dynamics needed to succeed in China’s competitive employment market. Whether you’re a recruiter or a candidate we forecast an active 2014.”