ke 18. joulukuuta 2019 11.29.00
One of the common questions around the budgeting period regards the average salary increase for the following year. In order to accurately answer this question, there are many factors to take into consideration. Where is the company located? In what industry sectors is the company represented? What s the size of your company? MPS China published a report to address this question for Nordic companies operating in China. Beside the average salary increase, the publication reports trends on secondary remuneration, hiring trends of local and expatriate employees, attraction of skilled labor and retention of key employees.
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Shanghai - December 18th, 2019. The 2019 Nordic Salary Report in China is a quantitative research report looking into Human Resources-related trends of companies with a Nordic heritage, based in the People’s Republic of China. The publication reports the data collected from a survey, which was filled out by the General Management- or Human Resources representative of 276 Nordic companies in China. The data collection targeted representative from companies with a Headquarter based in either Denmark, Finland, Norway or Sweden.
Average Salary Increase
Data on the planned salary increase indicated a clear trend across geographies and industries that the rate of annual increase is decreasing year on year. Based on the survey data, and data from other comparable surveys from this year and previous years MPS predicts the slowing down to continue even further into the future. Data also suggests a higher salary increase for the next year in the Eastern Chinese region (excluding Shanghai), which comes natural as the average salaries in smaller cities have a lower starting point.
More than 90% of the companies have some kind of bonus system in place, such schemes include a fixed 13th month salary, an (annual) performance-based bonus and commission. The popularly commented-on 13th month was only practiced by 52% of participants, instead it was more common to tie bonus to performance, whether individual, local subsidiary, or the performance of the global company. Bonus as a percentage of total annual salary is typically in the range of 5-15%
A majority of companies reported an increase of their local staff last year, and just under half said that they had plans to increase for next year. Whereas only a few percent have decreased their staff, or plan to do so next year. When looking into the reasons for decreasing staff (if a company were to decrease the headcount of local employees) this was mainly tied to the performance of the local company, which comes as a very natural reason. Surprisingly, following a presumed trend of localization, more companies reported to have increased than decreased (or planned to do so) their expatriate staff in China.
Attraction & Retention
Lastly the report presented indicators on the attraction of skilled labor and retention of key employees. About two thirds of survey participants felt they had a challenge in attracting the right kind of talent, while more than one third had problems in retaining them. Just under half of the companies who reported difficulties when attracting skilled labor allocated this to a general lack of these employees in their respective industries, followed by the competitiveness of salary (39%). Alternatively, salary did base the main problem (69%) when retaining employees; of the companies experiencing problems with retention.
The trend survey was hosted by MPS China, the Chinese branch of the Finnish MPS in collaboration with the Danish Chamber of Commerce, the Finnish Business Councils, the Norwegian Business Association and the Swedish Chamber of Commerce, all in China.
On the 10th and 11th of December, the results were respectively presented in the Nordic business communities in Shanghai and Beijing. The interactive seminars lead by MPS’ Henri Manner and Alexander de Freitas, attracted a higher attendance than available chairs in both locations. Following the communities’ interest, the organization aims to host the survey on an annual basis.
The report is available for all readers and can be obtained by contacting firstname.lastname@example.org.