Wage Pressure Likely to Continue, Survey Shows

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October 22, 2015 – Senior human resources executives in China expect the current economic transition will create more realistic expectations among their employees and yet do little to tame increasing salary costs, a snap survey by the American Chamber of Commerce in China shows. The survey also found that, if required to find ways to cut costs, they would rather reduce headcount than freeze salaries.

The survey of HR executives at AmCham China member companies was conducted ahead of 16th Annual Human Resources Conference, which will address the challenges facing multinational companies operating in China as they shift from “growth at all costs” to managing costs. With the theme Navigating the Change — Human Capital Management in an Age of Uncertainty, the conference will feature speakers from IBM, Cummins, Amazon Web Services, ConocoPhillips and Cisco, among others. The presentations, case studies and panel discussions at the Oct. 29 event will focus on topics ranging from compensation and communication to change management and innovation.


“Human resource challenges have for many years been the No. 1 business challenge our members face in China, and the survey results show that the economic transition is increasing the pressure on companies to do more with less,” said AmCham China President Mark Duval. “This will require HR executives to take on a more strategic role, and we’re very fortunate to have such high-caliber speakers and panelists at the conference who will be able to address these issues head-on, share best practice and strategies for adapting to the New Normal.”

When asked what the most likely result of the economic transition would be, the top answer was more realistic employee expectations, with 65 percent saying this was likely or very likely. But just 23 percent said the same about the chance of wage pressures falling, suggesting that it will continue to get increasingly expensive to find and keep talent. The second and third most likely were lower morale and more labor disputes, with many executives also commenting that the biggest challenge they were facing at the moment was engaging with and motivating their work forces.

When it comes to cutting costs, HR directors overwhelmingly chose a hiring freeze as their preferred option, with 70 percent choosing it as the first or second choice out of nine options. Pay freeze was the least favored method of cutting costs, with half of respondents saying this was the last resort. In fact, while still not popular, laying off workers was preferred over freezing their salaries. In the event of layoffs, the biggest concern was the morale of the remaining workers.


However, the threat of layoffs remains distant for many companies. In fact, hiring intentions for next year appear to have changed little from 2015, with 43 percent of companies intending to speed up hiring and just 14 percent planning layoffs, both the same figures as for the previous 12 months.

Finally, the respondents were asked about their attitudes to training. More than 85 percent said training was important in raising the capabilities of their staff, and helped increase job satisfaction and retention. More than 60 percent agreed that training was a cost-effective investment in the future.





The survey was conducted in September 2015 and received responses from 35 HR professionals, more than 80 percent of which described themselves as the head of the HR function for their organizations.


About AmCham China

The American Chamber of Commerce in the People's Republic of China is a non-profit, non-governmental organization whose membership comprises more than 3,800 individuals from over 1,000 companies operating across China. The chamber's nationwide mission is to help American companies succeed in China through advocacy, information, networking and business support services. AmCham China is the only officially recognized chamber of commerce representing American business in mainland China. With offices in Beijing, Tianjin, Dalian, Shenyang and Wuhan, AmCham China has more than 60 working groups, and holds more than 300 events each year. Visit: www.amchamchina.org

For more information, please contact:

Jane Song

Tel: (8610) 8519-0835

Email: jsong@amchamchina.org