Senior employees working for multinational firms in China have received on average a 4-5 percent salary increase this year, according to a survey conducted by Hewitt Associates, a global human resources firm.

The survey shows the biggest winners were the heads of companies, or their departments, who are involved in areas such as sales, marketing, human resources and accounting.

Employees in these positions can earn up to US$430,000 a year, although Hewitt Associates declined to give details of other salary levels.

The survey was based on interviews at 130 multinational companies operating in China, ranging from small companies with a dozen staff to bigger ones with thousands of employees.

It looked at six categories of people: Western expatriates; Taiwanese; people from Hong Kong; other Asian expatriates; people returning to China; and locally-hired foreigners.

"Compensation for individuals is truly beginning to depend on the scope of the position and the individual's experience and capability. Thinking that a large company will pay big dollars is not necessarily true," said Stella Hou, Hewitt Associates' head of regional sales and accounts.

Apart from traditional foreigners from outside the Chinese mainland that enjoy full expatriate status, the survey focused on two other recently emerged categories: China-hired foreigners and Chinese returnees who have over three years overseas work experience.

Among all the groups, director-level positions for Chinese returnees and Taiwan residents were awarded the highest average salary increases at 5.7 percent and 5.6 percent respectively.

Specialist-level positions for western nationals and Taiwan residents saw the least growth, at 3.5 percent and 2.9 percent respectively.

"Companies investing in China will continue to encounter leadership and management gaps in the local labour pool and will continue to employ expatriates to fill these gaps. However, companies that want to keep their fixed costs low are increasingly looking to less traditional groups, such as China-hired foreigners and Chinese returnees," said Jean Lin, head of Hewitt's compensation and benefits consulting practice.

Yet there is a move towards standardization of remuneration packages for all expatriates, regardless of nationality.

The survey also discovered that expatriate benefits, such as rest and recreation allowances and hardship pay, have fallen and now constitutes only 9.9 percent of total remuneration. Benefits made up 11.5 percent last year.

"First-tier cities such as Shanghai and Beijing are no longer considered hardship postings," said Lin.

(China Daily December 8, 2005)