30 Jan 2007, Beijing, P.R.C. — MRI Worldwide, one of the largest global executive search firms and third time recipient of the “Recruitment Firm of the Year, China 2006” award, released the results of its year-long report that monitors the compensation and remuneration for top talent in China. The 2006 findings show record increases in compensation packages for mid to senior level talent at Multinational Corporations (MNCs) in China.
The MRI Worldwide Chief Executive Officer of the China Group, Mr. Tony Dickel said: “Over 85% of the sought after talent are Chinese nationals which highlights how much companies are willing to battle it out for the right people. The intensity in the market has caused base compensation rates to jump by 31% and 33% for total compensation in the top talent pool in 2006. While there is significant evidence that shows regular salary levels increasing by around 8-9 percent annually, the MRI study highlights the shortage of mid and senior level positions as they move from one MNC to another,” said Dickel.
The Healthcare/Life Sciences and Manufacturing sectors reported the highest compensation increases in 2006 compared to other industry groups.
| Life Sciences (Pharma and Medical Devices) |
40% |
| Industrial/Manufacturing |
32% |
| Consumer Products |
31% |
| Information Technology |
31% |
| Retail |
30% |
| Chemicals |
27% |
| Telecommunications |
15% |
MRI Worldwide Country Manager for China, Mr. Michael Royston said that 27% of individuals received an increase of over 50 percent in compensation when changing positions at MNCs.
“The multinational companies we talk to regularly are finding it difficult to adapt to the fast changing trends. Human resource departments are struggling with compensation policies and salary bands that are already outdated despite being set within the same year. Some companies have also indicated the growing gap with new talent being offered up to 50% more than existing staff if they can demonstrate they have the right skills,” he said.
Compensation Trends Summary:
- Less than 3% of candidates accepted compensation less than their current package
- 48% of candidates received a 30% increase over their previous package
- Functional HR compensation increased 39% and Functional Finance compensation increased 20%
According to MRI Worldwide China Group's Managing Director in Beijing, Mr. Chris Watkins, the focus being given by MNC's on attracting the top 20% of talent is having a spillover effect to other industries and the trend is not likely to change soon.
“In 2007 we see these compensation trends continuing across China and across industries as firms continue to make bigger investments to attract and retain talent. As 2006 came to an end we saw packages continue to rise sharply and even above the annual average which signals there is no short term solution in sight. This will continue to have significant implications on the recruitment strategies for firms that have less flexibility to pay above certain bands that are set by their company,” he said.
Study Data and Highlights The study represents data compiled from hundreds of individuals that made job changes in 2006 to leave one multi-national company in order to join another at mid to senior level positions. The data pool represents approximately 85% Chinese nationals and 15% foreign nationals at over 120 U.S. or European multinational corporations with operations in mainland China and it covers most major industry verticals.
The survey findings also indicate several factors that have influenced the rapid jump in compensation packages:
- Companies are continuing their focus on hiring PRC Nationals for the vast majority of their VP, Director and Manager level roles in China. Supply and demand is a significant influence on this compensation pressure.
- Continuing influx of new companies to China that are not bound by strict salary guidelines like many established firms.
- Expanding needs of established players who are seeking to attract top level talent. This often results in a candidates receiving more than one offer.
- Candidates becoming more sophisticated in their approach to job changes with a better idea of where they fit in the market place.
- MNCs seeking out the top 20% of available talent putting further constraints on the talent pool. The trend of “upgrading” talent is continuing. Hiring cycles for most companies have continued to increase which has led to most candidates receiving at least 2 offers during the interview cycle. Hiring cycles can take 8-10 weeks for many MNC during which time the candidate often interviews with multiple companies to evaluate opportunities and compare compensation. This has an inflationary affect at times and often forces the company to raise their offer to attract the candidate.
About MRI MRI Worldwide (
http://www.mri-china.com/) is one of the world's largest search companies and provides retained executive search and recruitment services, competitive market analysis and recruitment process outsourcing solutions to clients in every major industry, serving multi-national companies on a global basis. With seven offices in Asia Pacific and over 1,000 offices worldwide, MRI is the largest search company in the world. Based in Philadelphia, USA, MRI has system-wide billings of US$600 million.