The Salary Reality¬†
China is no longer a source of cheap labour, as it was in previous decades: double digit salary growth rates over the last ten years were commonplace, especially in urban centres. But the economy is slowing down, making this kind of growth no longer sustainable. Nonetheless, Chinese employees are addicted to these high ¬†increases they received in the last few years. The impact of this will be twofold: on the one hand, companies will have to figure out innovative ways to retain their employees while also managing expectations. This can include measures such as mentioned in the previous article. On the other hand, labour is becoming more expensive, placing more emphasis on efficiency and productivity. This could lead to a more widespread introduction of robots in manufacturing, especially as China is moving up the value chain, leading to a change in overall skill requirements.
The Importance of Going Digital
With 670 million internet users, digital recruiting strategies are essential in China. Here are a few helpful tips to follow:
The Why of Generation Y
Born in the 80s and 90s, China‚Äôs Generation Y consists of between 250 – 300 million people, or 3 – 4 times the entire population of Germany! Compared to their predecessors, this internet-savvy group of consumerism-driven ‚Äú20 to 30 somethings‚ÄĚ has a different outlook on life and work. With hard-working parents who experienced the opening-up of China and its rapid economic expansion in the context of the one child policy, Generation Y is privileged enough to have received higher education, relative stability, and global exposure. As a result, they place more emphasis on their work-life balance and generally have a more entrepreneurial spirit. They want to travel, experience, and impress. Employers should keep this in mind when hiring GenYers, by, for example, offering work travel, cutting edge technology, and flexible working arrangements.
The ‚ÄėLocal Plus‚Äô
The classic ‚ÄėExpat‚Äô in China is slowly becoming extinct for various reasons:
The Termination Trap
Employees in China are highly protected by the country‚Äôs Labour Laws. There are only a limited number of situations in which a company can legally dismiss an employee, including non-work related medical problems, incompetence after having received training, and a change in job description after their contract has expired. And very few that allow immediate termination, including corruption, being employed by another company, or engaging in criminal activity. As this is the case, we advise to specify goals and responsibilities in as much details as possible in the employment contract. In addition, having a solid Employee Handbook is essential to avoid any messy disputes.
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