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Salary gaps between top cities narrowing

By Gao Yuan  (China Daily)

09:38, March 01, 2013

The salary gap between China's first- and second-tier cities will narrow this year as the nation speeds its urbanization process, human resource experts said on Thursday.

China's single-digit economic growth is unlikely to impact recruitment in 2013, and job applicants with better knowledge of local markets will find it easier to get employment, said a survey released by Robert Walters Plc, a United Kingdom-based recruitment consultancy.

Overall salary levels in China will be "slightly higher" than in 2012, with candidates moving jobs usually able to get a 15 to 25 percent pay increase, according to the survey. Those who stay put will get rises of around 8 percent, which corresponds with the World Bank's estimate in January that China's 2013 GDP growth could reach 8.4 percent.

"As more international players enter lower-tier cities, talent was also lured away from metropolises such as Beijing and Shanghai. The trend will help narrow salary differences among Chinese cities," said Arthur Wang, managing director of Robert Walters China.

He added that while there was a salary gap of 40 percent between people doing the same jobs in Shanghai and Suzhou two years ago, the current pay differential is between 15 and 20 percent.

However, there was a drop in demand for candidates with Western backgrounds, despite the nation's increased globalization.

People from other Asian economies, such as Hong Kong, Taiwan, Singapore and Malaysia were preferred in the Chinese mainland due to their ability to communicate in Mandarin and adapt to Chinese culture, said the survey.

"Global conglomerates are desperate to turn China into a solid profit generator, but, in order to achieve this, they need employees who are familiar with the mainland market," explained Wang.

Although many international brands have scaled back their expansion plans in China, a number of players still intend to enter smaller cities in the country, boosting recruitment in their sales, human resource, training and business development departments, said Robert Walters.

Demand for new employees in the retail and luxury sectors may grow by up to 20 percent year-on-year until 2015, and salaries in these sectors may rise annually by 15 to 25 percent, said Wang.

In addition, the banking and financial service sectors will also see strong demand for new employees this year, said Wang.

Although the sectors were the hardest hit during the global economic crisis, a number of companies have already started to announce expansion plans in the first two months of this year.

"Many overseas financial firms delayed their expansion plans last year, which is set to trigger bigger recruitment initiative as the economy stabilizes," said Wang, adding wage increases could hit more than 20 percent for high quality employees.

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