Chinese employees retain high salary expectations as benefits take a backseat

In a continuing trend of mismatched salary expectations, Chinese employees expect significant pay increases in 2020, while employers maintain a more measured approach, finds the latest Asia Salary Guide report by leading recruitment experts Hays. Additionally, focus on employee benefits continues to decrease despite emerging as a key element to talent retention when compared to previous years.

This year marks the 13th edition of the annual Hays Asia Salary Guide, which remains a definitive snapshot of salaries for positions across industries in Asia. The salary and hiring insights, including a thorough market overview of business outlooks, salary policies and recruitment trends, are based on survey responses from close to 6000 working professionals located in the five Hays operating markets in Asia; namely China, Hong Kong SAR, Japan, Singapore and Malaysia.

Salary expectations remain highest in Asia

For the fourth year in a row, employees in China have surpassed all other Asian markets in their salary expectations for the next 12 months. Most Chinese employees expect an increase ‘greater than 10%’ (40 per cent), while others expect an increase ‘above 6% but less or equal to 10%’ (33 per cent). As a comparison, the second highest demographic to think so were Malaysian respondents, who voted for the same responses at 24 per cent and 25 per cent respectively. These expectations appear to be in line with growing reports of rapid wage growth in the country.

However, employers in China have maintained a more conservative outlook to increments, also for the fourth year in a row. In their responses to the survey, most employers revealed that they expected employee salaries to increase by ‘above 3% but less than or equal to 6%’ (44 per cent) in the next 12 months, while a smaller percentage said ‘above 6% but less than or equal to 10%’ (23 per cent).

But despite this ongoing mismatch of salary expectations between employers and employees, the statistics point to China being the highest paymaster in Asia by far. Some percentage of employers from other regions expected increases between 3-6% but most, including Japan (54 per cent) and Singapore (42 per cent) expected them to be only up to 3%.

Chinese employers were also most likely to include bonuses as part of the remuneration package for all staff (66 per cent), the highest percentage to do so in Asia.

Work-life balance key to employee retention but low priority

For the first time in four years, Chinese respondents voted ‘work-life balance’ as the top reason why they would stay with their current employers (44 per cent), over their previously preferred response of job security (42 per cent). These were followed by compensation package (39 per cent) and management style & company culture (33 per cent). The response may come as a surprise, considering the increasing economic uncertainty in the region that may have pointed to job security or compensation being a higher priority.

However, China scored the lowest among all other Asian region in terms of benefits. Only 66 per cent of Chinese employers said they offered benefits to employees alongside salary and bonus, putting them well below the Asia average of 81 per cent. Of these, employers were most likely to offer mandatory benefits such as medical (74 per cent) but were the lowest in Asia to offer ‘health and wellness programs.’ It could be argued that fringe benefits such as those that focus on wellness would contribute to better workplace culture and stress management, thus improving work life balance. Additionally, while 43 per cent of employees said they had access to ‘flexi-time’ working options, only 31 per cent had access to home or remote working options – the lowest number in Asia to say so.

Simon Lance, Managing Director at Hays Greater China commented, “Despite a softening outlook for global economies, China has remained resilient and committed to growth, as is evident in the consistently high salary expectations that both employers and employees have maintained. By invariably outperforming other Asian regions in terms of compensation offered, China continues to prove why it is a hub for the region’s best talent and innovation. However, employee retainment is a human problem that will most benefit from a holistic approach. By increasing non-monetary benefits and flexible working options, employers would not only be able to attract the best talent but retain them for good.”

To download your copy of the 2020 Hays Asia Salary Guide, please click here.