Contact: April Li
Hudson
(8621) 6375 8922
[email protected]
For Immediate Release
Buoyant Economy Means More Hiring, But Skill Shortages Lead To Higher Salaries
With Many Candidates Turning Down Job Offers
Comprehensive Hudson Report Released for Quarter Three 2006
SHANGHAI – 18 JULY 2006 – Continued hiring increases means good news for China's workforce,
while increased optimism continues to fuel increasing economic growth. Planned headcount increases
are at 62%, a slight decrease from 63% in the last quarter. Expectations still remain close to the seven
year high reached at the end of 2005 and this is reflected in the noticeable upward trend in salaries with
58% of employers expecting to pay increases of 5% or more in the next year, which is the highest for all
the markets surveyed in Asia.
Hudson, one of the world’s leading professional staffing, outsourcing and talent management providers
and a division of Hudson Highland Group, Inc. (NASDAQ: HHGP), today released findings of its
comprehensive quarterly Hudson Report for Asia. With a reputation as a key socio-economic indicator
in the current marketplace since its Asia launch in December 1998, the survey has been built on the
premise that employers’ expectations of an increase or decrease in staffing levels represent a
significant indication of their optimism in the growth of their organisation and their industry as a whole.
The Hudson Report represents the expectations of over 2,300 key employment decision makers from
multinational organisations of all sizes in all major industry sectors with 741 of these companies based
in China.
The latest employment trends
Permanent employment expectations continue a positive trend from the last quarter, with 62% of
companies planning to increase headcount, pointing to continued strong growth in the employment
market. A further 37% of professionals surveyed anticipate that employment will remain steady, while
only 1% forecast a decline in headcount.
Angie Eagan, General Manager, Hudson, Shanghai, comments, “The continuing strength of the
economy means that employment expectations remain high in all the sectors surveyed. There is a still
an acute shortage of candidates with the right skill sets. These candidates are asking for higher
salaries, are receiving multiple job offers and are consequently declining many of the job offers that they
receive”
Once again, anticipated hiring continues to be strong in the Healthcare & Life Sciences sector, which
has the highest permanent employment expectations, with 87% planning to hire.
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There has also been continued optimism in the Banking & Professional Services sector with 72%
forecasting increased headcount. There is still a need for specialists in areas required by WTO rules.
Source: The Hudson Report – China, Q3 2006
Permanent employment expectations over time
The 62% of respondents who say they will increase headcount in Q3 which reflects the fact that
employment expectations remain close to their highest level for the last seven years when 63% forecast
increased hiring in Q3, 2005.
Between Q4, 1998 when the Hudson Report began in China and Q3 this year, the number of employers
forecasting a headcount increase has almost doubled, from 33% to 62%.
Source: The Hudson Report – China, Q3 2006
Booming employment market leads to higher salary increases
The buoyant economy and candidate-short market means that good candidates are able to choose
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Room 1602, Central Plaza
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Shanghai, China, 200003
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between multiple job offers. There is a strong uptrend in salaries with 58% of respondents across all
sectors expecting to pay increases of 5% or more over the next year. This is a much higher figure than
for any other market surveyed in Asia. In Hong Kong 40% of respondents plan to increase salaries by
5% plus. In Japan the figure is just 18%.
The largest rises are forecast for the Healthcare sector, where 74% of respondents are expecting to
increase salaries by 5% or more. Media/PR/Advertising firms also anticipate substantial rises, with 71%
saying that they will increase pay by 5% or more.
Source: The Hudson Report – China, Q3 2006
Companies are very optimistic about the next six months
Employers in all the sectors surveyed express a high level of optimism about their company’s prospects
in the second half of 2006. Overall, 78% expect that company performance will be excellent or good.
The ongoing liberalisation of the Banking sector means that respondents in this sector are especially
positive about future prospects, with 87% forecasting excellent or good performance.
Source: The Hudson Report – China, Q3 2006
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Room 1602, Central Plaza
No. 227, Huangpi Bei Road
Shanghai, China, 200003
t 8621 6375 8922
f 8621 6375 8211
Many candidates are turning down job offers
The continuing high level of demand for talented staff means that many candidates are able to decline
job offers. Across all sectors, 42% of respondents report that potential employees have “often” or
“sometimes” refused offers in the last six months. Media/PR/Advertising firms and the Healthcare sector
are the most likely to receive refusals, with 57% and 48% respectively saying that candidates have
often or sometimes declined offers.
Source: The Hudson Report – China, Q3 2006
Alternative offers and high salary expectations are leading to job offers being declined
The high expectations for increased hiring mean that sought after candidates are able to choose
between several job offers. Employers who report that they are receiving refusals from candidates state
that the most significant reasons are offers from other employers, with 48% of respondents across all
sectors giving this as a reason. Higher salary expectations are cited by 41% of respondents and 31%
have seen candidates receive counter-offers from their current employers.
Source: The Hudson Report – China, Q3 2006
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www.hudson.com
Room 1602, Central Plaza
No. 227, Huangpi Bei Road
Shanghai, China, 200003
t 8621 6375 8922
f 8621 6375 8211
Increasing trend towards paying incentives to all staff
Bonuses and other non-salary payments have traditionally been paid to sales and other front-line staff
but there is an increasing trend for companies to extend such incentives to all staff, including support
and back-office.
This trend is most strongly apparent in the Healthcare sector, where 92% forecast that back office staff
will receive incentives and this is a reflection of the strong competition for talent in this sector.
Source: The Hudson Report – China, Q3 2006
Hudson
Hudson delivers specialised professional staffing, outsourcing, and talent management solutions
worldwide. From single placements to total solutions, the firm helps clients achieve greater
organisational performance by attracting, selecting, developing and engaging the best and brightest
people for their businesses.
Hudson is a division of Hudson Highland Group, Inc. one of the world’s leading professional staffing,
retained executive search and talent management providers. The company employs more than 3,800
professionals serving clients and candidates in more than 24 countries through its Hudson and Highland
Partners businesses. More information is available at www.hudson.com.
Special Note: Safe Harbour Statement Under the Private Securities Litigation Reform Act of 1995: Except for
historical information contained herein, the statements made in this release constitute forward-looking statements
within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. Such forward-looking statements involve certain risks and uncertainties, including statements regarding each
company's strategic direction, prospects and future results. Certain factors, including factors outside either
company’s control, may cause actual results to differ materially from those contained in the forward- looking
statements, including economic and other conditions in the markets in which the companies operate, risks
associated with acquisitions, competition, seasonality and the other risks discussed in our filings made with the
Securities and Exchange Commission, which discussions are incorporated in this release by reference.
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www.hudson.com
Room 1602, Central Plaza
No. 227, Huangpi Bei Road
Shanghai, China, 200003
t 8621 6375 8922
f 8621 6375 8211