Year-end bonuses at SOEs to rise: Poll

China Daily (Canada) - - BUSINESS - By HE WEI in Shang­hai hewei@chi­nadaily.com.cn

More State-owned en­ter­prises in China will of­fer higher yearend bonuses to em­ploy­ees than for­eign and pri­vate com­pa­nies, a re­cent sur­vey sug­gests.

About 70 per­cent of SOEs will see their bonus level rise com­pared with last year, as op­posed to 66 per­cent of pri­vate com­pa­nies and 60 per­cent of for­eign busi­nesses, ac­cord­ing to a sur­vey con­ducted by lead­ing staffing firm Ca­reer In­ter­na­tional.

The sur­vey polled hu­man re­sources of­fi­cers from 847 com­pa­nies. It cov­ered 14 in­dus­tries, in­clud­ing real es­tate, IT, au­to­mo­bile and re­tail.

Half of the re­spon­dents worked for multi­na­tional cor­po­ra­tions. Three-quar­ters of the rest were from State­backed com­pa­nies.

In gen­eral, 64 per­cent of all sur­veyed firms ex­pected to lift the bonus thresh­old, up 6 per­cent­age points from 2012.

Growth was largely seen to be mod­er­ate, as 47 per­cent rated the rise to be less than 10 per­cent.

“Com­pared with for­eign and pri­vate firms, bonuses claim a sig­nif­i­cantly higher share, or 35 per­cent, of an SOE’s pay­ment com­po­si­tion. There­fore, more com­pa­nies en­cour­age em­ploy­ees by rais­ing bonuses,” said Li Jie, leader of Ca­reer In­ter­na­tional’s Asia Pa­cific op­er­a­tions.

SOEs have gen­er­ated a com­bined profit of 2.15 tril­lion yuan ($354 bil­lion) from Jan­uary to Novem­ber, up 8.2 per­cent year-on-year, data from the Min­istry of Fi­nance showed. Mar­gins of cen­trally ad­min­is­tered en­ter­prises rose 11.2 per­cent com­pared with last year.

Only 23 per­cent re­ported lower in­cen­tives, a pro­por­tion that dropped by 9 per­cent­age points from last year.

Nearly 27 per­cent of for­eign-funded com­pa­nies said they would cut bonuses, a per­cent­age that was no­tably higher than the other two cat­e­gories.

For­eign firms were more greatly ex­posed to the lin­ger­ing ef­fects of the global fi­nan­cial cri­sis, which squeezed their mar­gin for bonuses, said Li.

Changes to bonus lev­els were pro­jected to vary by in­dus­try. The most gen­er­ous com­pa­nies were seen in the real es­tate sec­tor, with 70 per­cent ex­pect­ing to pay higher bonuses, boosted by soar­ing prop­erty prices in 2013.

By con­trast, the auto in­dus­try saw the big­gest num­ber of HR of­fi­cers, or 35 per­cent, ex­pect­ing to re­duce bonuses. Li at­trib­uted the cut­back to the con­strained growth in the sec­tor in 2013, when fierce com­pe­ti­tion wa­tered down profit mar­gins.

Zhang Yut­ing, a cus­tomer ser­vice man­ager at a Sta­te­owned en­ter­prise’s Shang­hai branch, said bonuses were lower this year, with the amount fall­ing to 7.5 times her ba­sic monthly salary from eight times the amount a year ago.

“Our bonus is com­posed of two el­e­ments: the com­ple­tion of the com­pany’s over­all sales tar­get and one’s own per­sonal per­for­mance,” Zhang said.

But in the eyes of Shen Ziy­ing, a clerk at a for­eign com­mer­cial bank in Shang­hai, Zhang’s bonus was “en­vi­able”.

“Last year, we re­ceived, on av­er­age, 1.5 times our monthly in­come. The best pos­si­ble sce­nario is to keep up with last year,” Shen said.

She said her pre­vi­ous em­ployer may have of­fered around 2.5 times her ba­sic monthly salary when eco­nomic con­di­tions were sound and healthy.

“For­eign banks are at a dis­ad­van­tage com­pared with lo­cal banks, es­pe­cially with our busi­ness be­ing squeezed by large State-run banks. I can­not pin much hope on bonuses af­ter brows­ing our re­cent bal­ance sheets,” Shen noted.

De­spite that, SOEs are los­ing their al­lure among re­cent grad­u­ates in China, ac­cord­ing to a new sur­vey by the coun­try’s largest re­cruit­ment site, Zhaopin.

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