HR consultants foresee smaller raises due to GDP factor
Salaries of employees in China are expected to grow at about 6 percent this year, compared with about 9.4 percent back in 2012, when the economy’s focus shifted from rapid growth to highquality development, experts said.
“We have studied the fluctuation trend of salaries worldwide for decades, and found it is highly linked to a country’s GDP, whose influence may take one or two years to show,” said Huang Xian, senior director of Korn Ferry Hay Group, a human resources consulting firm.
Data from the National Bureau of Statistics showed China’s GDP grew 6.9 percent last year. The corresponding figure was 9.5 percent in 2011.
The growth rate of wages nationwide was 8.5 percent in 2013, 7.2 percent in 2014, 7.3 percent in 2015, 6 percent in 2016 and 5.8 percent in 2017, KFHG data showed.
“The salary fluctuation will keep stable along with the economic performance in the following years, but the data will keep higher than that of developed countries,” Huang said.
The growth rate of wages in western Europe was estimated to reach 2.3 percent in 2018 and that of North America was seen reaching 2.8 percent, while Africa would reach 8.5 percent, the company said.
The group studied wages in more than 25,000 companies in over 110 countries and published an annual report based on its findings.
Internet-based, financial and real estate industries boast greatest potential for high salaries, while manufacturing, chemical, oil, gas and other traditional industries will offer generally lower salaries, led by either booms in certain industries and declines of others, according to KFHG.
Information provider Eastmoney studied annual reports of over 3,000 A-share companies, showing that high annual salaries were mainly seen in financial, securities, banking and real estate industries last year, which may surpass 500,000 yuan ($78,578).
The lowest salaries were seen in textiles and garments, light manufacturing, farming, forestry, animal husbandry and fishing companies, whose average level was about 90,000 to 100,000 yuan per year.
Though the wage gap in different industries was large, the future of some industries at the top of pyramid was not as glamorous as the public imagined, Eastmoney said.
For example, average annual salaries of stock market experts decreased from 639,500 yuan in 2015 to 411,100 yuan in 2017. Banking remained at around 340,000 to 370,000 yuan in the last two years, Eastmoney said.
“Traditionally, companies would decide the salary level by judging the value of position ( job-title), the person’s competence and working performance, as well as supply of similar talent in the market,” said Huang.
That’s why, although the growth rate of wages is slowing in China, it may not necessarily decrease the cost of human resources for companies, because the competition for a limited pool of employees with global prospects, innovative thinking, high adaptability and multiple skills is even fiercer.
Driven by government-led campaigns such as the Belt and Road Initiative, Made in China 2025 and Internet Plus, many companies are scrambling for top-end talent on the way to digitalization, transformation, technology upgrade or going global, Huang said.
“For instance, human resources personnel should not only know how to recruit people or calculate KPI (key performance indicators), but have a deep understanding of the company’s business and its future development strategy.”
Agreed Felix Lee, head of executive search and recruitment services of KPMG China, a global consultancy service provider.
“Those with strong digital knowledge and who are able to leverage their expertise to streamline work processes or procedures will be highly sought after. Consequently, such professionals will have the most room for a larger pay rise,” Lee said.
Professionals who are adaptable, good at problemsolving and have strong interpersonal skills will also thrive, he said.
The pressure for human resources is even higher when the domestic labor market is shrinking amid an aging population and a growing number of young middle-class professionals with more flexible choices for working or not to work, Huang said.
Charlie Li, head of human resources at KPMG China, said though remuneration is not a key motivator for greater performance, uncompetitive remuneration will drive people less motivated to perform.
“From this perspective, compensation should reach the level that can make talents feel comfortable and happy to join, stay, and get engaged,” he said.