Coronavirus outbreak cuts into salary hike plans

Yang Meiping
A new survey suggests that Chinese salaries will increase by 6.3 percent this year, down from last year's increase of 7 percent.
Yang Meiping

About 60 percent of 3,000 enterprises polled in a nationwide survey said they will amend their salary adjustment plans this year to reflect the effects of the coronavirus outbreak.

According to the survey report produced by China International Intellectech Co, a state-owned human resources service company, about 18 percent of surveyed enterprises have decided not to adjust pay for their employees after earlier planning to do so, 25 percent have temporarily suspended their pay adjustment plans and 19 percent have decided to decrease their budgets for raising salaries.

CIIC predicted that China’s national average pay increase in 2020 would be 6.3 percent, compared with 7 percent last year. Shanghai would have the lowest increase among China’s four first-tier cities that include Beijing, Guangzhou and Shenzhen, with pay raises lowered to 6 percent from 6.8 percent last year.

To reduce pressure on businesses, governments at all levels in China have introduced policies including cutting taxes, deducting social security fees, waiving housing rents and other favorable financial supports.

According to the survey, industries such as medicine and healthcare, games, online education, live streaming, telecommunication services and e-commerce performed well during the outbreak. Product delivery, service quality and recruitment were common sources of pressure.

Industries such as tourism, hospitality, catering, offline education, retailing, real estate and automobiles faced declines in service demand.

As some companies try to move their businesses online under the influence of the novel coronavirus epidemic, demand for digital product operations, technology development and marketing will be high, according to the report.

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