The pay wars in China’s financial sector, where many candidates get 30 to 50 per cent salary increases (sometimes even more), are not going away anytime soon. In fact, the prediction is that firms in China will have to fork out even more to attract and retain talent come 2012. That’s according to the 10 senior in-house HR professionals from leading international banks and financial institutions who attended the inaugural eFinancialCareers roundtable in Shanghai.
It’s the environment, stupid
The rising cost of living in the mainland seems to be the main driver of wage inflation. “Look, inflation in China has already gone up by over 5 per cent this year, so the expectation is that salaries next year will have to rise even higher to compensate,” said one of the panellists, all of whom asked not to be named in this report.
Hey, I need to get married
Inflation is already weighing heavily on candidate moves. A delegate mentioned a recent example of a young employee who resigned despite being happy with the firm. “This candidate left us for an offer that was double what we were paying him. He told me ‘I’m quitting not because I don’t like the company, but because I want to buy a house and get married, I need to be able to afford that’.”
Although mindful of the bottom line, most firms don’t have much choice other than to fork out, if they don’t want to lose out to their rivals. “There’s still a huge talent shortage in China and because so many financial institutions are expanding very quickly, firms are desperately looking for talent,” said one attendee.
Will there be a foreseeable end to firms outbidding each other on wages? “Well, it depends on how the economic situation pans out. If there is a downturn, you won’t see many candidates moving around. There are already some who are concerned because of all the negative market news, but so far Chinese candidates have not been greatly affected.”
The young and the restless
Another issue which drew lively debate is the challenge of managing and engaging Gen-Y. Younger people in China tend to value work-life balance and this comes through in interviews. One attendee said: “Young candidates ask questions like ‘Do I need to work over time a lot? Do I need to travel a lot?’ You can see work-life balance is something very important to them.”
Many young employees are also extremely reliant on their parents when it comes to making career decisions. “Some will tell us even at the interview stage that they need to consult their parents before they can take up a position. We also have candidates decline offers because their parents have gotten them a job in another mainland bank – it can be quite extreme.”
They aren’t all soft
An attendee, however, said Gen-Y employees are very keen to learn and take on more challenges. “If we want to retain them we need to provide them with more difficult jobs. They also want to see progress fast, so recognition and promotions need to be given if you want to retain high-potential candidates.”
The panellists said they try to engage Gen-Y via a variety of means, such as social gatherings, sporting activities and even employing the same lingo they use. Some companies have even changed the way they recruit younger staff – one foreign bank finds using Sina Weibo effective.