Most Chinese employees are expected to receive a year-end bonus, but more companies are holding back on the amount. Unlike the western style of “13 months salary”, Chinese year-end bonus could mean a much bigger sum, depending on the industries and corporate profit of the year.
As Chinese economy slows down, Financial and Banking, Technology sectors as well as Start-ups are facing great challenges to survive. Therefore, the sexy ‘8-month-pay’ year-end bonus had gradually become a sweet piece memory for Chinese employees.
Who Touched the Year-end Bonus?
Actually it is not that bad. According to the CIIC HR Management Consulting report, 46% of enterprises responding to it said they will increase the amount of annual bonuses for employees over last year – adding up to 10%. Nonetheless last year, about 57% of the enterprises surveyed said they would increase the payouts.
Roughly 40% of enterprises said they would pay the same amount in year-end bonuses as they did the previous year. The remaining 15% decide to cut their year-end bonus budget.
93% of the enterprises surveyed said they would give employees year-end bonuses before the Chinese New Year holiday in early February. That was slightly less than the 96% who said so last year.
Among various industries, the average year-end bonus in finance is the highest – more than 40,000 RMB (8,339 Aussie dollars) – followed by the real estate, high-tech, internet, sales/trade and auto sectors. Those ranged between 24,000 yuan (5,001 Aussie dollars) and 31,000 yuan (6,483 Aussie dollars).
The report also suggests that the amount of year-end bonuses in finance, real estate, internet, auto and manufacturing is generally down this year because of declining industry performance.
The report was based on a nationwide survey of 674 enterprises in late November. Two-thirds of them were based in first-tier cities in China – Beijing, Shanghai, Guangzhou and Shenzhen.
A Bitter Chinese New Year with Less Bonus
Although the surveyed companies suggest they will still give employees the year-end bonus, interestingly, the expectation from employees seems somehow different.
According to Zhaopin.com, one of China’s top three recruitment platforms, only about 55 percent of white-collar employees surveyed said they would receive a year-end bonus, which may be in the form of cash or goods.
Year-end bonuses have become an important element of many Chinese employees’ income, especially to help them buy goods for the Lunar New Year celebration, as well as buy gifts for family and relatives.
But this year will be tough. Compared with the roughly 66 percent surveyed by Zhaopin in 2017 who said they received bonuses, 2018 saw an 11 percent decrease in the number of workers receiving this extra money for the new Year of the Pig.
At the same time, many Chinese recently posted on social media that they were laid off just before the new year.
Some Netease employees who joined Netease at the beginning of 2018 said they were promised an extra eight times their monthly salary as year-end bonuses. But now, they would only receive one month’s salary as compensation without the bonus. They added that by the N+1 formula, they should receive two months salary as compensation, but that the human resources and financial departments told them they were only entitled to one month’s pay.
Another Netease employee said he was not surprised by the layoffs, as the online store business had performed very badly in 2018. “No profit, big losses … even the year-end bonuses [for some employees] had to come from the company’s 2019 budget,” the employee wrote.
Netease denied that on Feb. 2, but said the online store division was under “structure optimization,” meaning it would fire poorly performing employees.
“Structure optimization,”this has been the excuse used by scores of top internet-based companies since the second half of 2018.
Since November 2018, social media has been abuzz with accounts of major layoffs at tech giants Alibaba and Tencent; e-retailer JD.com; search engine Baidu; Zhihu—- a Quora-like website; Douyu—-a live video platform; bike sharing company Mobike; and scores of other tech firms. But all these companies denied the news and said that they were simply doing ‘structure optimization’.
The laid-off employees from Zhihu said their work computers or laptops were taken away immediately after they were announced to have been laid off. Their badges could not work that evening. The laid-off employees from group buying website Meituan Dianping complained that they were asked to leave the office within three minutes.
China’s economy could be worse than it previously anticipated.
Ning Jizhe, the director of China’s National Bureau of Statistics, said on Jan. 21 that China’s unemployment rate in 2018 was around 5 percent, which is similar to 2017.
China calculates the number of unemployed people as only those who seek unemployment social security benefits with the government, specifying that only men aged 16 to 50 and women aged 16 to 45 qualify.
The Chinese regime considers unemployment a taboo topic—as it hints at social instability. Thus, political observers believe the true unemployment rate is far higher. These 5 percent, or even more, will surely miss their year-end bonus, which they could be entitled to when the economy was growing.
An Interesting Counter Case
Despite of the overall economic correction and retrench, a Chinese steel plant hit the jackpot this year. And with the Spring Festival around the corner, they decided to give out year-end bonuses in the form of a cash mountain!
Perhaps the winner this year for showy self-promotion was this steel plant in the Jiangxi capital of Nanchang which built a“cash mountain”made out of stacks and stacks of banknotes totaling 300 million yuan (62.46 million Aussie dollars).
That money was then distributed to the plant’s 5,000 employees, leaving each worker with an average bonus of 60,000 yuan (around 12493 Aussie dollars), double what they received last year. “Such a big bonus, I don’t know how to spend it all!”A happy employee was quoted as saying.
Well, just a thought, but, 60,000 yuan happens to be exactly how much one wealthy woman in Dalian spent to purchase a pair of pet alpacas from Australia.
This year marks the 70th anniversary of People’s republic of China, which suffered several economic crises and yet survived since the Reform and Open Up policy from 1978. Despite of multiple social and economic problems, it is worth believing that as long as China’s substantial economy stay strong, the wonders may come back after this wave of correction. We surely wish all the employee in China a bigger year-end bonus in 2020.
(Content edited from Xinhuanet, the Epoch Times.com, shanghai.ist, YiMagazine)
Edited by Joreal Qian