The Hudson Report. Employment and HR Trends. China

Transcription

1 January March 2007 The Hudson Report Employment and HR Trends China

2 Introduction The Hudson Report is a quarterly survey of forwardlooking employer hiring expectations. The Report in Asia covers Japan, Hong Kong, Shanghai and Singapore and now combines the expectations of over 2,200 key employment decision-makers in these four markets. Participants in this survey are primarily executives at multi-national firms and were personally surveyed by Hudson consultants familiar with them and their industry sectors. commentators, and business leaders. In the years since its first release in Australia in 1995, The Hudson Report has established a reputation as a key business and economic indicator, based on the premise that the expectation to increase or decrease staffing levels is a key indicator of employers' optimism about their markets. In total, The Hudson Report now combines the expectations of almost 6,000 key employment decision-makers in Asia Pacific from all major industries across a range of organisational sizes. The Hudson Report receives extensive media coverage and acknowledgment from politicians, 2

3 Key Findings Employment expectations are rising again after falling throughout Strong demand for skilled and experienced candidates means that employers are offering significantly higher salaries to recruit new managerial talent. New hires salaries are rising significantly as companies try to attract the talent they need: a quarter say they will increase new managers salaries by more than 20%, which is the highest in all the countries surveyed Angie Eagan, General Manager, Hudson, China Employment expectations have risen this quarter after falling for four consecutive quarters. This survey of 600 executives in key business sectors shows that 59% plan to grow headcount in Quarter One (Q1) 2007, up from 56% the previous quarter. Expectations have fallen over the past year, from 67% forecasting increased hiring in Q to 59% this quarter; The Banking sector reports both the highest expectations and the greatest increase, with 77% planning to hire more staff, up from 64% in Q4; Planned annual bonus payments are approximately the same level as last year, with 42% of respondents expecting to pay more than 10%; Staff turnover in China is relatively high and 33% of respondents say that it exceeded 10% over the past year; Perceptions of limited career progression and staff poaching are the main causes of staff turnover. 3

4 Permanent employment expectations Expectations Rising Again After falling for four consecutive quarters, employment expectations are rising again. Across all sectors 59% of respondents say they will increase headcount in Q1, compared with 56% the previous quarter. Banking & Professional Services Banks report both the highest expectations and the greatest increase in new hiring projections: 77% of respondents plan to hire more staff, up from 64% in Q4. China s WTO membership means that foreign banks are now permitted to operate renmimbi businesses and this creating strong demand for experienced candidates. Consumer The Consumer sector is also optimistic, with 58% of respondents saying they will increase headcount, compared with 47% the previous quarter. Hiring is picking up as employees start job hunting after receiving their year-end bonuses. Manufacturing Expectations are also rising in the Manufacturing sector, where 58% plan to hire more staff. This compares with 52% in Q4. This sector continues to boom and there is strong demand for production specialists. Media/PR/Advertising In the Media/PR/Advertising sector 50% of respondents forecast increased hiring in Q1. This is a relatively high figure that reflects the growing demand for branding and marketing services in the run-up to the Beijing Olympics in Healthcare & Life Sciences Employment expectations among Healthcare companies have fallen, with 45% reporting that they plan to grow headcount this quarter. This sector appears to be consolidating after a period of heavy recruitment. It has also been affected global issues in the Healthcare business. IT & Telecommunications In the IT&T sector 44% of respondents say they will hire more staff in Q1 a decrease from 50% in Q4, Companies in a number of sectors are now investing in technology renovation and this is creating demand for IT specialists. 4

5 Permanent employment expectations over time Outlook Still Positive With 59% of respondents saying they will hire more staff, there has been a fall in employment expectations since Q when 67% of respondents forecast increased headcount. This was just below an eight year peak of 68% in Q However, the outlook is still very positive and the overall economy is expected to continue growing rapidly during Expectations have grown fastest in the Banking sector, with 77% saying they will hire more staff, up from 73% a year earlier. Much of this growth is driven by WTO regulations, which are opening up the Banking market to foreign entrants. Overseas banks are now introducing new product lines and opening offices in second and third cities. The Media/PR/Advertising sector has remained steady over the past year: 50% say they will increase headcount compared with 54% in Q The 2008 Olympics continue to create a substantial workload. 5

6 Permanent employment expectations by job roles Strong Demand For Sales And Technical Professionals Sales roles again account for the largest single proportion of vacancies, with 24% of recruitment forecast to be in this area. Much of the sales-related recruitment is for banking front office roles in banking, as foreign banks expand their market presence in response now that the WTO regulations are in force. Technical professionals remains high. Respondents forecast that 17% of new jobs will be in this area as the continued expansion of manufacturing facilities creates strong demand. Demand for Marketing/PR specialists remains high, reflecting the buoyancy of the Media/PR/Advertising sector. This area accounts for 13% of demand by job role. The level of vacancies for Engineering/Operations/ 6

7 Each quarter, apart from asking about hiring expectations, we select survey topics that indicate how businesses expect to cope with their environment. This quarter we asked about anticipated company performance, salaries, bonuses and staff turnover rates. Anticipated company performance Confidence Has Fallen Since Last Year Confidence is lower than when companies were asked about to forecast future performance, in Q Across all sectors, 75% of respondents forecast that performance will be excellent or good in the next six months, compared with 82% a year ago. A number of factors that affect all the sectors surveyed are contributing to the fall in confidence. They include the new labour laws currently being implemented, new tax regulations and rising labour costs. Manufacturing is the most optimistic sector overall and the only one to report a higher level of confidence than in Q Excellent or good performance is forecast by 82%, a slight increase from 81% a year earlier. This high degree of optimistic reflects the significant investments made in new plants. The Media/PR/Advertising sector is also confident, with 81% expecting that performance will be excellent or good. Firms anticipate that activity will remain at a high level at least until the 2008 Olympics. The Banking sector has the highest number of respondents predicting excellent performance over the next six months 27%. 7

8 Pay increases to attract managerial staff Big Pay Rises Across The Board Respondents in all sectors say that they are increasing salaries for new managers, to attract the talent they need, in some cases by a significant amount. Overall 57% of respondents expect to increase salaries for new managerial hires by more than 10%. This compares with 48% when the same question was asked in Q Increases in starting salaries of more than 20% are forecast by 25% of respondents - a much higher proportion than in any other market surveyed in Asia. These substantial increases reflect the generally buoyant state of the employment market and the difficulties that many employers are experiencing in attracting talented candidates. Much higher starting salaries are forecast by the Banking, Consumer, Healthcare and IT&T sectors. In all four sectors over 60% of respondents expect salaries to increase by more than 10%. The IT&T sector has the highest proportion of respondents expecting to increase new hires salaries by more than 20% - 32%. Banking IT specialists are receiving substantial rises. Many banks are also increasing starting salaries by this rate, with 30% saying they will offer more than 20%. These increases are designed to attract the professionals needed for the rapid expansion taking place in this sector. 8

9 Year-end bonus payments Annual Bonuses Remain Steady Companies report that annual bonus payments will be around the same level as in Q Overall, 42% of respondents say they will pay bonuses of more than 10%, compared with 41% in Q Some respondents report higher bonus payments: 13% say they will pay more than 20%. This is exactly the same figure as for Q and is lower than in any other market surveyed in Asia. IT&T companies are paying the highest bonuses, with 29% saying they will pay 11-20% and 26% more than 20%. The Banking sector is also paying higher than average bonuses: 29% expect to pay 11-20% and 19% more than 20%. The increasingly competitive nature of the banking sector is shown by the steep increase in very high bonuses being paid to retain key talent. Bonuses of more than 40% will be paid by 7% of respondents, up from 2% in Q

10 Staff turnover Significant Levels Of Staff Turnover Respondents were asked about their company s average turnover rate in the last twelve months. Across all sectors, 33% say that turnover in the last twelve months has exceeded 10%, while 9% say it has been more than 20%. These figures are ahead of those reported for Japan and Singapore and close to those for Hong Kong. The IT&T sector has the highest level of staff turnover, with 43% saying that it is more than 10%. Of these, 23% report a level of more than 20%. These figures reflect the shortage of IT staff caused the high rate of merger and acquisition activity in this industry. Banks are also experiencing high turnover: 39% of respondents report levels of more than 10%. The post-wto opening up of the banking market is creating many attractive opportunities and it is easy for experienced candidates to find new positions. Among Consumer companies, 10% of respondents say that their staff turnover rate exceeded 20% during the past year. Employment expectations are rising fast in this sector and there is strong demand for talented candidates. 10

11 Reasons for staff turnover Poaching And Poor Career Prospects Are Main Reasons Overall, the most significant causes of staff turnover are perceptions of limited career progression and poaching by other companies. These factors are cited by 25% and 23% of respondents respectively. Personal reasons and dissatisfaction with salary and/or bonuses are also seen as significant. The proportion of respondents citing limited career progression - 25% - is higher than in any other market surveyed in Asia. Career development opportunities are generally seen as very important in China. This issue is particularly significant in the Healthcare and Media/PR/Advertising sectors, where it is mentioned by 32% and 31% respectively. A number of international companies in these sectors are now localising and providing attractive career opportunities that encourage candidates to move. Dissatisfaction with salary or bonuses is most significant in the Healthcare and IT&T sectors: 21% and 19% respectively say it is a cause of turnover. As seen above, both sectors are having to offer substantially higher salaries to new managerial hires. Across all sectors personal reasons are given as a cause of turnover by 20% of respondents. These reasons include employees who leave their jobs to return to full time education or to start their own businesses, as well as those who are trying to achieve a better work/life balance. 11

12 Contacts Asia Gary Lazzarotto Tel: (852) China Angie Eagan Tel: (86 21) Japan Stefanie Cross-Wilson Tel: (65) Singapore Mark Sparrow Tel: (65) Hong Kong Gina McLellan Tel: (852)

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