Executive Costs In China - Key Factors That Recruiters Need To Think

1. Tel : +86-21-6474-7064 | simon-wan@cornerstone-group.com Executive Costs In China - Key Factors That Recruiters Need To Think

2. Executive Costs In China - Key Factors That Recruiters Need To Think One of the biggest hurdles in the recruitment process is that of deciding the most appropriate compensation for the candidates. The factors, on which this decision is based, vary from one economy to another. Hence it is not surprising that the executive compensation in China is still significantly different from the executive compensation offered in other countries across the globe. However, the trend is gradually changing and the executive search companies in China are now facing the challenge of taking new elements and factors into consideration. Tel : +86-21-6474-7064 | simon-wan@cornerstone-group.com

3. Executive Costs In China - Key Factors That Recruiters Need To Think However, before learning about the changing landscape of executive compensation within the country, it is essential for the recruiters to learn about its economical transformation. Prominent Changes In Chinese Economy Over the past several decades, the Chinese economy has undergone a transformation from being a centrally planned economy to being a market-oriented one. The rapid market growth has contributed significantly towards the country’s GDP growth, which is expected to surpass the GDP of USA in 2018. Tel : +86-21-6474-7064 | simon-wan@cornerstone-group.com

4. Executive Costs In China - Key Factors That Recruiters Need To Think This has consequently led to a rise in the demand for both local and expatriate executives as well as their salaries to ensure a better competitive advantage. In addition to high salary expectations, executives today are seeking equity compensation and stock options just like their counterparts in the western countries. Even though the trend of indirect compensation offered in the form of executive accounts and under-the-table bonuses is still popular in China, the new executives are not willing to adhere to this formula any longer. Tel : +86-21-6474-7064 | simon-wan@cornerstone-group.com

5. Executive Costs In China - Key Factors That Recruiters Need To Think Typical Components Of Executive Compensation In China In most cases, executive compensation in China is generally provided in the form of salaries and bonuses. The state owned units follow a uniform salary management system while the private organizations generally adhere to a performance-based model. However, as the experts from the top executive search firms in China have observed, using the performance based system for determining the right pay might not be that easy. Tel : +86-21-6474-7064 | simon-wan@cornerstone-group.com

6. Executive Costs In China - Key Factors That Recruiters Need To Think This is because this system depends largely on the ability of an organization to collect authentic and comprehensive details about the performance of individual executives. Another employment contract that forms an integral part of the recruitment process. key player in executive compensation is the With the executives all set to gain major compensation benefits outside the employment contract, the calculation of executive salary can be quite unreliable. Tel : +86-21-6474-7064 | simon-wan@cornerstone-group.com

7. Executive Costs In China - Key Factors That Recruiters Need To Think In addition to the regular pay, most top executives earn through the flexible allocations of their organization for communications and travel. Difference Compensation Between Local And Expatriate Executive There is a significant gap in the executive compensation offered to local talent and expatriate professionals. This is mainly due to the aggressive recruitment of expatriate executives by Chinese organizations with the objective of attracting the best talent. Tel : +86-21-6474-7064 | simon-wan@cornerstone-group.com

8. Executive Costs In China - Key Factors That Recruiters Need To Think At the same time there has been a significant rise in the compensation for local talent, even though it is still much lower as compared to expatriate executives. In fact, the situation has improved considerably in the past few years with the Chinese organizations understanding the need to provide consistent and clear standards in executive compensation. They have understood it to play a vital role in helping them maintain a decent growth rate. Tel : +86-21-6474-7064 | simon-wan@cornerstone-group.com