Employers on the Chinese mainland are facing the highest salary inflation in Asia due to the country's rising demand for professionals, according to a human resources report released in Shanghai Thursday.

Hudson Recruitment, a Nasdaq-listed headhunting firm, asked more than 2,600 multinational organizations on the Chinese mainland, Hong Kong, Japan and Singapore about their hiring intentions over the next three months. Of the 708 respondents from the mainland, only 8 percent of employers said they could negotiate lower salaries for new managerial hires, the lowest proportion in Asia.

In Singapore, about 10 percent said they were able to negotiate. The figure was 11 percent in Japan and 13 percent in Hong Kong.

"The lowest figure in Asia indicates that employers have little scope to negotiate lower new hire salaries and salary inflation is the most prevalent issue for them," said Angie Eagan, Hudson's general manager in Shanghai.

"The Chinese mainland is still a talent-short market, the ongoing competition for strong candidates means that employers are not able to effectively combat the increases in asking salaries for new hires," Eagan said.

The mainland is the only region in Asia surveyed which reported an increased hiring expectation. The survey reported that about 55 percent employers were planning to add to their headcount in the next three months, compared with the 52 percent in the second quarter this year.

Expansion in the retail, tourism and hospitality segments and the approaching Beijing Olympics were driving the growth, analysts said.

Chinese employers are still suffering from the highest turnover rates, with 71 percent respondents in mainland and Hong Kong reporting an equal or even higher turnover rate over the past year.

Survey respondents said performance-related bonuses, training and development programs as well as substantial pay increases were the most effective measures companies could take to retain staff.

(Shanghai Daily July 19, 2008)