China’s labor market is one of the most challenging in the world, and many companies list human resources as their top operating issue in China, largely because of rising labor costs and high turnover rates.
Two trends drive the consistently large salary increases and high turnover rates. First, foreign companies continue to invest heavily in China, and demand for talent remains high. Second, as first-tier Chinese companies transform their businesses to compete on the global stage, their expectations for talent are beginning to match those of foreign companies. The result is a persistently tight labor market for first-tier multinational and domestic companies operating in China.
Why do employees leave? #1 is compensation. Next is better career opportunity and tied for third is better benefits and better training and personal development opportunities.
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