Feb 23, 2007

Cash is king in China

As far as pay is concerned. So says the article in Management Consultant International:

Companies operating in China are facing significant challenges around attracting and retaining the best employees. Pay can keep people, and pay can lure them away. Many organisations are competing primarily on pay, according to Brenda Wilson, a principal with Mercer Human Resource Consulting. “Pay to hire, pay to retain. If you compete on pay alone, you are going to be out-paid eventually by someone, because someone will be more desperate than you are.”

The social norms help to explain why cash plays such an important role in community and family. “Often you are supporting multiple generations on your salary, and that is even true of those working in multinationals,” says Wilson. "Cash is important, and long-term savings vehicles are not as popular as they are in mature economies.”

I guess once the market matures and firms have been there for a longer period of time stock as pay and other benefits would come to the fore. Though that would depend on the structure of how the companies are owned (foreign firms are usually JVs with state enterprises, is what I heard)

Anybody have some experiences in the China market? Would love to hear from you.