Businesses remain bullish about the year ahead despite salary stagnation and skills shortages

Despite forecasted business growth in Mainland China, salary stagnation persists amid skill shortages in the country. This is one of the key findings in the Hays Asia Salary Guide 2019, a report that highlights salary and recruiting trends based on responses from Hays Asia operating markets Mainland China, Hong Kong, Japan, Malaysia, and Singapore.

Mainland China’s businesses have seen a year of extended growth over the last 12 months, with 60 per cent of companies reporting increased business activity in 2018. On a similar scale, they also predict a continuation of heightened business activity in 2019, and as a result, half of them (51 per cent) foresee an augmentation of permanent staff levels in the coming year.

However, 30 per cent of those surveyed expects the local economy to weaken, up from the 12 per cent who responded in the survey last year. Correspondingly, those predicting the economy to strengthen has decreased, from 49 per cent to 39 per cent.

Salaries

One in ten employers (12 per cent) note that more salaries remained stagnant in 2018, compared to the year before (seven per cent). By the same token, eight per cent of employers this year express that they do not foresee giving a salary increment to their employees over the next 12 months, a slight increase from five per cent who said the same in 2018. Those who plan on giving salary increments will mostly be increasing salaries in ranges ‘above three per cent but less than or equal to six per cent’, followed by increments of ‘above six per cent but less than or equal to ten per cent’ and ‘up to three per cent’.

Only slightly over half of the employees interviewed (56 per cent) state that they are ‘satisfied’ with their current remuneration packages, an improvement from the 43 per cent the previous year. However, only three per cent of respondents claim to be ‘very satisfied’.

“It is clear that while positivity surrounding salaries is up, there is still room for improvement,” says Simon Lance, Managing Director of Hays Greater China. “As more than half of employees (57 per cent) have expressed that they leave mostly due to the allure of better salary or benefit packages, companies looking to retain adept employees should work on improving satisfaction rates where remuneration is concerned.”

Benefits and bonuses

Over the past year, the number of companies guaranteeing bonuses to all staff went up from 66 per cent to 70 per cent, compared to the year before. However, there is a slight decrease (five per cent) in the number of employers giving benefits in addition to financial incentives.

The most common forms of additional benefits are health and medical provisions (68 per cent), housing allowance (30 per cent), and pension (27 per cent).

Skills Shortages

Employers in Mainland China are concerned that skills shortages may affect the running of their operations. Almost all (97 per cent) of those interviewed expect a deficit of required talent to hamper the effective operation of businesses in 2019, and 68 per cent of employers confirm that productivity has been negatively impacted in the past year.

In addition, confidence in the ability to recruit the skills required to meet organisational needs in the coming year is down, with 27 per cent ‘not very confident’ compared to 16 per cent who had previously said the same.

Areas of greatest skills shortages

Mainland China employers state that they covet hard skills (50 per cent) as much as they do soft skills (50 per cent). Of the former, project management (60 per cent), foreign language fluency (56 per cent), and statistical analysis and data mining (41 per cent) are the areas of greatest demand. Of soft skills, problem solving, the ability to work in a team, and verbal communication abilities are most preferred, with 78 per cent, 61 per cent, and 39 per cent of employers placing high importance in these skills, respectively.

The areas in which employers have the most difficulty in recruiting are as follows:

Sales: middle management level (nominated by 20 per cent of employers)

Research and Development: middle management level (nominated by 18 per cent of employers)

Marketing: middle management level (nominated by 17 per cent of employers)

Accountancy and finance: middle management (nominated by 15 per cent of employers)

Sales: senior management level (nominated by 15 per cent of employers)

Sales: entry up to middle management level (nominated by 14 per cent of employers)

Get your copy of the 2019 Hays Asia Salary Guide by visiting https://www.hays.cn/en/salary-guide/ or by contacting your local Hays office.