Chinese Wage Growth Drops to 6.5%, Lowest Rate Since 2010

Chinese Wage Growth Drops to 6.5%, Lowest Rate Since 2010

Xu Wei

Date: Tue, 12/12/2017 - 20:52 / source:Yicai
Chinese Wage Growth Drops to 6.5%, Lowest Rate Since 2010
Chinese Wage Growth Drops to 6.5%, Lowest Rate Since 2010

(Yicai Global) Dec. 12 -- The average wage in Chinese companies rose 6.5 percent (excluding promotions) this year, marking the lowest rate of increase since 2010, per a recent Aon Hewitt survey. Wage growth is projected to be 6.6 percent next year.

Internet companies posted the largest average wage increase of 9 percent, down from 10.3 percent a year earlier. The average salary of employees in the high-tech sector went up 7.4 percent, a decrease from 7.9 percent last year. Medical equipment, foreign medicine, retail, consumer goods, logistics and engineering businesses have all seen a decline in wage growth, the survey states.

“In recent years, salary related costs have been increasing,” Aon Hewitt Greater China Zhang Zuolei said. “Companies must focus on differentiated pay with the aim of driving performance.”

Top employers pay outperforming employees 44 percent higher than other workers, Aon Hewitt’s best Chinese employers survey shows.

The average staff turnover came in at 19.7 percent this year, down from last year’s 20.8 percent. Some 14.4 percent of workers resigned, while employers removed about 5.3 percent of them. Involuntary turnover has nudged up in many industries.

“Faced with the pressure of an economic downturn, disruptive technology, and changing regulatory environment a number of enterprises have taken the initiative to transform their businesses,” Zhang said. “Organizational restructuring, business divestitures, and mergers and acquisitions have resulted in an increase in involuntary turnover. In addition, some sectors have experienced increase in voluntary turnover due to more job opportunities available.”

The survey covered more than 3,000 enterprises in Beijing, Shanghai, Guangzhou, Shenzhen and second- and third-tier Chinese cities. Participating companies came from the high-tech, internet, real estate, finance, healthcare, automotive, mechanical equipment and industrial manufacturing, consumer goods, retail, chemicals, logistics, engineering and hospitalities industries.

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Keywords: Aon Hewitt, Salary