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Business / Economy

Wage pressures remain despite slowdown, say HR bosses

By Zheng Xin (chinadaily.com.cn) Updated: 2015-10-22 15:41

Senior human resources executives believe the current economic transition will create more realistic expectations among employees and yet do little to tame rising salary costs, a survey by the American Chamber of Commerce in China shows.

The survey, released on Thursday, also found that HR executives would lay off workers rather than freeze salaries if cuts were needed.

The survey, conducted in September, received responses from 35 HR professionals, more than 80 percent of which described themselves as the head of the HR department for their organizations, said the chamber.

When asked the most likely result of the economic transition the top answer was more realistic employee expectations, with 65 percent saying this was likely or very likely.

Only 23 percent said the same about the chance of wage pressures falling, suggesting that it will continue to be increasingly expensive to find and keep talent, followed by lower morale and more labor disputes, with many executives saying the biggest current challenge was engaging with and motivating their work forces.

When cutting costs, HR directors overwhelmingly chose a hiring freeze, with 70 percent picking it as first or second choice out of nine options.

A pay freeze was the least favored method with half of respondents saying it was the last resort.

While still not popular, laying off workers was preferred over freezing salaries, and in the event of layoffs, the biggest concern was the morale of remaining workers, according to the chamber.

The chamber said the threat of layoffs remains distant for many companies, with hiring intentions for next year appearing 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.

When it comes to 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, while more than 60 percent agreed that training was a cost-effective investment in the future.

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 cost control.

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.

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