Executive Briefings

Pay Is Up in China, and So are Worker Turnover Rates

Many companies are continuously improving their compensation and benefits levels, but employee turnover rate doesn't show any sign of decline. A recent study confirms that turnover rates are still moving upwards across most sectors in China, with the average increasing from 8.3 percent in 2001 to 14.7 percent in 2007.
This number has continued to rise in recent years, and some cities and some industries see even higher turnover rates. The reason is due mainly to the gap between supply and demand.
The fast growing economy in China is the fundamental cause for the gap. Most enterprises are continuously expanding in China. Last year, there was, on average, a 10 percent to 20 percent increase in (company workforces). When companies are expanding, the whole market is recruiting but supply is not catching up fast enough. Demand for certain functions, like sales and marketing, is even bigger. For people in some key positions, the opportunities are huge, and there might be headhunters chasing after them every day.
Source: Wharton School of Business, http://www.knowledgeatwharton.com.cn

Many companies are continuously improving their compensation and benefits levels, but employee turnover rate doesn't show any sign of decline. A recent study confirms that turnover rates are still moving upwards across most sectors in China, with the average increasing from 8.3 percent in 2001 to 14.7 percent in 2007.
This number has continued to rise in recent years, and some cities and some industries see even higher turnover rates. The reason is due mainly to the gap between supply and demand.
The fast growing economy in China is the fundamental cause for the gap. Most enterprises are continuously expanding in China. Last year, there was, on average, a 10 percent to 20 percent increase in (company workforces). When companies are expanding, the whole market is recruiting but supply is not catching up fast enough. Demand for certain functions, like sales and marketing, is even bigger. For people in some key positions, the opportunities are huge, and there might be headhunters chasing after them every day.
Source: Wharton School of Business, http://www.knowledgeatwharton.com.cn