Salary bill for foreign firms rising in big cities

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Last updated at: (Beijing Time) Thursday, September 25, 2003

Salary bill for foreign firms rising in big cities

The rising cost of human resources is gradually bringing pressure on foreign-invested firms in China, especially in big cities such as Beijing, Shanghai, and Guangzhou.

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The rising cost of human resources is gradually bringing pressure on foreign-invested firms in China, especially in big cities such as Beijing, Shanghai, and Guangzhou.

That was the conclusion of the 2003 salary and welfare survey of Chinese employees in foreign-funded firms, conducted by Hewitt Associates, a leading global human resource outsourcing and consulting firm.

"China is no longer a cheap labour market, especially not cheap for senior-level management personnel," Stella Hou, director-general of Hewitt's salary evaluation and consulting business in China, said yesterday.

"The average salary rises have far outpaced the growth of the consumer price index, putting much pressure on employers," Hou said.

She cited Beijing as an example. While consumer prices have stayed the same or even strayed into negative territory since 1998, the rise in average salary income was more than 7 per cent annually, with 7.6 per cent this year.

Under the pressure of an increased payroll bill, all 216 firms surveyed in Beijing have lowered their forecasts for next year's salary growth, Hou said.

The survey also showed that although the personnel flow rate had slowed in recent years, that of top management personnel remains relatively high, due to the lack of such professionals in the Chinese market.

Meanwhile, salaries for high-level management personnel enjoyed the highest growth rate, with an average increase of 7.9 per cent this year; compared with manual workers' rise of 5.8 per cent.

In addition, the average annual fixed cash income for different working positions varied greatly, with less than 50,000 yuan (US$6,000) for manual workers and up to 700,000 yuan (US$84,500) for top management personnel.

The survey also showed big differences between industries and regions - employees in the non-manufacturing high-tech industry enjoyed high overall income (including fixed cash income, allowances, flexible income, rewards and welfare) up to 500,000 yuan (US$60,000) annually; while those in auto-production industries earn only up to 230,000 yuan (US$28,000) in overall income.

Hou did not give specific figures to show regional differences, but said, "big regional differences will exist in the short term".

Releasing the survey results yesterday, Hou suggested firms attach more importance to employees' overall benefits and not just cash income.

Hewitt's previous survey showed salary and welfare ranked behind career advancement, training opportunities and good leadership when people choose their employers, she said. (China Daily)

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