Society

What economic crisis? Year-end bonus expected

By Lu Hong (China Daily Shanghai Bureau)
Updated: 2010-01-26 15:05

Shanghai: In spite of the effect of global economic downturn, the vast majority of Chinese office workers in Shanghai will receive year-end bonuses for 2009, according to a report released this week.

The quarterly report by Hudson, a leading provider of permanent recruitment, contract professionals and talent management services worldwide, surveyed the expectations of over 1,500 key employment decision makers.

The people questioned were drawn from multinational organizations in all major industry sectors in Beijing, Shanghai, Hong Kong and Singapore. Over 600 executives across key business sectors in Shanghai were interviewed in November alone.

According to the report, 84 percent of respondents said their organizations will pay year-end bonuses for 2009, a figure slightly lower than that for 2008. This figure compares favorably with other Asian areas, such as Hong Kong (75 percent) and Singapore (74 percent).

About 45 percent of those questioned expect to pay a bonus equivalent to 11 to 20 percent of their staffs' annual salary. At 91 percent, the banking & financial services sector has the highest proportion of respondents saying that their companies will make bonus payments for 2009. Many banks pay bonuses of between two and four months' salary while securities, investment and asset management companies may pay three to five months' salary as year-end bonus.

The increase reflects the government's successful economic stimulus policies vis-à-vis the banking and consumer markets, which were designed to consolidate the country's recovery from the global economic slump, said Mark Carriban, managing director of Hudson Asia.

Most of the companies surveyed were optimistic about how they would perform this year, with 69 percent predicting good or excellent results. This should spur a surge in hiring this quarter, said Carriban.

The report found that 49 percent of all respondents plan to hire additional staff before April, up from 39 percent in the previous quarter. This percentage was even higher for the banking and financial services industry (58 percent) and manufacturing and industrial sectors (53 percent).

In contrast, only 27 percent of companies in the information technology and telecommunications (IT&T) sector expected to add to their headcount during this period, down from 53 percent in the previous three months.

"We don't need to panic about the decrease, given the fact that IT&T usually has a lower hiring expectation in Q1," Carriban said. "We also noticed that 60 percent of correspondents in the sector said they will keep the headcount steady, more than the number who did so in Q4 (2009)."

At the same time, hiring expectations in Q1 in Hong Kong and Singapore shows the sharpest rise since 1998. Over 53 percent Hong Kong and 51 percent Singaporean bosses expect more hiring to take place in the first quarter of this year, up from 35 percent and 34 percent in Q4, 2008 respectively.

As hiring expectations rise, most employers expect to pay higher salaries to attract new managerial talents.

Mentoring and training programs are also seen as the most effective initiatives to attract and keep talent, the report found.