China’s competitive market spurs upskilling & increments despite conservative business outlook

While 2019 began as a promising year for recruitment in Asia, the ripple effect of a slowing global economy has seeded uncertainty within the region. This has contributed to a more conservative outlook for hiring and compensation in 2020, finds the latest Asia Salary Guide report by leading recruitment experts Hays. However, both employers and employees in China continue to maintain comparatively high expectations for increments in 2020 comparing to Asia counterparts, albeit alongside growing concerns over skill shortages.

This year marks the 13th edition of the annual Hays Asia Salary Guide, which remains a definitive snapshot of salaries for positions across industries in Asia. The salary and hiring insights, including a thorough market overview of business outlooks, salary policies and recruitment trends, are based on survey responses from close to 6000 working professionals located in the five Hays operating markets in Asia; namely China, Hong Kong SAR, Japan, Singapore and Malaysia.

In Asia: Organisations gear for uncertainty

Despite optimistic projections, 2019 meted out market uncertainties that had some industries bracing for impact. This is most evident by the majority of employers in the region (42 per cent) expecting a softening general outlook for their local economy in 2020, marking a decisive turn from the ‘static’ outlook that was voted consecutively for the last three years. An increasing number of companies also expect to give no increments to their employees in 2020, a number that climbed from six per cent in 2017 to 17 per cent in 2019. And while most employers still plan to award more than 50 per cent of their staff with bonuses (44 percent), more employers also plan on giving no bonuses in the coming year (14 per cent), as compared to last year (11 per cent).

Such an outlook will necessitate transformation, both in organisational structures and skillsets, which will result in new job roles and opportunities for professional development. This is evident by most organisations still expecting increased business activity (59 per cent) and headcounts (43 per cent) in 2020. Of all the Asian regions, Japan is expecting the highest increase in staff (52 per cent), as is evident by its tight labour market and falling unemployment numbers.

In China: Competitive market spurs upskilling & increments

Results of the survey revealed that 41 per cent of survey respondents in China are expecting a weaker general outlook for the local economy in 2020. This is 11 per cent higher than last year, definitely showing less optimism compare to same time last year. Adding to this narrative, 42 respondents in China said the biggest reason they would stay with their current employers was job security – the highest number to say so in Asia (42 per cent vs 31 per cent). Job security could also be the reason why 52 per cent of respondents said they weren’t actively looking for a new job but were still open to new opportunities (the highest number to say so in Asia), as it would be a safer way for them to explore new opportunities.

The survey also showed that the majority of employees in China (40 per cent) are expecting their salaries to increase by ‘greater than 10%’ in the coming year. However, only 6 per cent of employers in China are expecting to give such pay rise, with the majority (44 per cent) only willing to offer raises ‘between 3-6%’. But despite this evident mismatch in salary expectations, employees in China remain better paid than their Asian counterparts for the fourth year in a row. According to employers, the majority of employees in China (67 per cent) can expect to receive raises ‘between 3-10%’ in the last year, while the rest of Asia (51 per cent) is only expecting raises of ‘between 0-3%’.

Employers in China are also increasingly aware of the impact skill gaps will have on their business performance. 58 per cent said skill shortages would have some impact on the effective operation of their business in 2020, and 48 per cent said they did not have the talent needed to achieve their current business objectives. The majority of employers (60 per cent) said project management was their most sought-after hard skill (60 per cent).

Interestingly, Chinese employees were also the least confident that their skills would still be in demand by employers five years from now (49 per cent). However, their response to these concerns appears to a proactive approach to upskilling, with 55 per cent saying they spent 3-10 hours a week on upskilling themselves outside of their job. The impressive number of hours outmatch the rest of Asia by some distance, with the majority (55 per cent) only spending 0-2 hours a week on upskilling themselves. These results indicate strong ownership of professional development amongst individuals in China.

Simon Lance, Managing Director at Hays Greater China commented, “Despite facing significant challenges in the last year, China has remained resilient. This is evident in the determination of both employers and employees to offer the best of their abilities and resources to the market. Employees are savvy on the direction global growth is taking and show foresight in their efforts to ‘future-proof’ themselves by upskilling in the face of a widening global skills gap, while organizations have remained better paymasters than the median. Considering the growing importance of having right people in current market circumstances, there has never been an appropriate time for staff to get properly remunerated. Organizations would do well to continue tailor both their attraction and retention strategies to address wave concerns and assure employees of a brighter future ahead.”

To download your copy of the 2020 Hays Asia Salary Guide, please click here.