Salary increases for expats in China to hit double-digit figures

Salary increases among local and senior expatriate advertising professionals in China could hit double-digit figures this year, according to agencies, an executive recruitment firm and an executive research consultancy. Figures provided by TMP Worldwide eResourcing showed that estimated salary packages are up between 10 and 50 per cent for expatriates compared with last year. The biggest rise has been for the MDs, up about 50 per cent at the top level to USdollars 300,000 annually plus housing. At the same time, Watson Wyatt predicted salaries for locals would rise in the region of 10 per cent, although instances of 30 to 40 per cent hikes have not been uncommon. Agency heads said that while there was a large local talent pool in China, locals were not sufficiently experienced to take on senior positions resulting in the need for expensive expatriates. The situation was worsened because of rising housing costs, especially in Shanghai. Leo Burnett regional managing director Richard Pinder said that at his agency, about 75 per cent of managers in each of the major Asian markets it operates in is made up of locals but that in China the skew was towards expatriates. He believed that it would be some time before locals filled upper echelon positions. "We are another set of managers away from appointing local MDs. I think it would be three to five years rather than one to three years," he told MEDIA. However, there was also concern that local professionals have been asking for more than agencies were willing to pay. DDB Greater China president and CEO Aaron Lau said that there have been cases where salaries have risen by 30 per cent, "which the industry might not have a problem with if they are for top talents but the problem comes when less skilled and experienced people start demanding the same". Grey China chairman and CEO Viveca Chan agreed, saying that when agencies are forced into paying lesser talents more than the market rate and promoting them faster, the gap between job duty and ability widens. Nevertheless, the disparity in pay between locals and expatriates in China appears to be narrowing, according to a report by Watson Wyatt. For instance, a local creative director in Shanghai could expect an annual salary of HKdollars 400,000 (about USdollars 51,000). The figures for Hong Kong, Western and Asian expatriates in the same position are HKdollars 840,000, HKdollars 939,484 and HKdollars 728,074 respectively. However, most of the locals who command top-dollar pay packets have been trained by MNC agencies and "those who have been trained are understanding their true worth and potential", said D'Arcy president and regional CEO Garry Titterton. One of the more recent trends has been for multinational-trained locals to set up their own shop, which could derail the efforts of agency networks in growing their local client base. FCB Greater China chairman and CEO Gary Tse said: "It could be a major threat to us because local clients increasingly understand the value of branding and advertising but a significant number are unwilling to pay MNC rates. But I see the emergence of local shops as a good thing because competition will make us better and overall industry standards will continue to rise."

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