2019-2020 U.S. Business in Suzhou Compensation and Benefit Survey Result Report
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2019-2020 U.S. Businesses in Suzhou Compensation and Benefit Budgeting Report Oct 15, 2019 Copyright And Disclaimer • All information and statistics in this report were aggregated confidentially by staff from the American Chamber of Commerce in Shanghai (AmCham Shanghai). • AmCham Shanghai is not responsible for any human resource or management decision made based on this report. • This report has been produced solely for the benefit of AmCham Shanghai’s Suzhou members who have chosen to participate in this report. Contents Participants Macro Guaranteed Variable Standard Participated Methodology Appendix- Demographic Background Year-end Year-end Annual companies survey and its Bonuses Bonuses Salary list results Impact increase summary & 4-year trend 1. Participants Demographic 100% manufacturing industries 500-999 100% (89) U.S. and European companies 13% Above 1000 88% (78) U.S. based companies 10% ▪ 96 responses received 100-499 ▪ 89 valid data 56% Duplicate, non-manufacturing companies excluded ▪ In total, 54 companies (60.6%) located in Suzhou Industrial Park (SIP) ▪ 2nd major district besides SIP is Suzhou New District (SND) Less than 100 with 14 companies (15.7%) 21% 2. Macro Background and its Impact The extent of the U.S-China trade friction impact to company’s business. (N=89) N=89 N=81 In sum, 81% companies (compared with 65% last year) indicated that U.S. trade friction impacts their company business. 12,13% 16, 20% Compared with 2018, although 5,6% there is slightly increase of 12, 15% 56,63% 43, 53% companies under high pressure of 16,18% trade tension, more companies 10, 12% considered the impact under control. Yes, but under control Yes, we are under high pressures No, not at all Not sure, still under observation 2. Macro Background and its Impact Companies’ reaction to the business challenges due to US-China trade friction (N=89) 2019 1, 1% Salary 10, 11% 44, 49% 34, 38% ▪ Most companies have Structure conservative opinions. Companies that will not make the Headcount 9, 10% 11, 12% 30, 34% 39, 44% adjustments or are still considering make up a big 2018 2, 2% 1, 1% portion. Salary 53, 65% 25, 31% Structure ▪ Companies which chose to make Headcount 40, 49% 32, 40% adjustment are more inclined to 7, 9% 2, 2% adjust headcount than salary structures Yes, we will Yes, we already did so No, we will not Not sure, under observation 3. Guaranteed Year-end Bonuses Of the 16 companies that do not have guaranteed year-end bonuses, they provided variable year-end bonuses to their employees, the average amount is 1.5 times of monthly payment. 16, 18% Do not have 16, 18% 1, 1% Cancel 0, 0% 8, 9% Some employees 8, 9% 64, 72% Yes (to) all employees 65, 73% Forecast in 2020 Actual Paid in 2019 4.Variable Year-end Bonuses 3-year trend 2017-2019 Overall N=79 2017 54% 34% 1% 10% ▪ In 2019, 7 companies did not provide N=81 variable year-end bonus, 1 company 2018 62% 27% 1% 10% cancelled variable year-end bonus. N=89 2019 65% 26% 1% 8% ▪ 3 companies said that they did not SIP provide salary increase to their direct labor, 1 company do not provide N=51 2017 55% 35% 2% 8% increase to indirect labor and 7 N=54 reported that they delayed the 2018 61% 30% 2% 7% effective date for the scheduled annual N=54 standard salary increase for fiscal year 2019 65% 26% 2% 7% 2019. Yes (to) all employees Some employees Cancel Do not have Guaranteed Year-end Bonuses V.S. Variable Year-end Bonuses variable year-end bonuses ▪ Companies that offer both year-end guaranteed 2019(N=89) Do not salary and variable year-end bonus to all All Some Cancel have sum All 46% 19% 1% 7% 73% employees are increasing year by year (46% in year-end Some 4% 3% 0% 1% 9% guarante Y2019, 42% in Y2018, 37% in Y2017), due to Cancel 15% 3% 0% 0% 18% ed salary increasing variable year-end bonus providers Do not have 0% 0% 0% 0% 0% sum 65% 26% 1% 8% 100% variable year-end bonuses ▪ In 2019, 46% companies provided both bonus to 2018 (N=81) Do not all employees. Round 65% did provide both All Some Cancel have sum All 42% 22% 1% 7% 73% bonus, but not to all. year-end Some 2% 4% 0% 1% 7% guarantee Cancel 0% 0% 0% 0% 0% d salary Do not have 17% 1% 0% 1% 20% sum 62% 27% 1% 10% 100% variable year-end bonuses 2017(N=79) Do not All Some Cancel have sum All 37% 27% 1% 9% 73% year-end Some 3% 5% 0% 0% 8% guarante Cancel 0% 0% 0% 0% 0% ed salary Do not have 15% 3% 0% 1% 19% sum 54% 34% 1% 10% 100% 4. Variable Year-end Bonuses Average Increase trend 2016-2019 [1]Variable year-end bonuses: salary provided to employees based on the company’s overall business performance and employee’s individual performance. [2] The current value is the result of the calculation including the outliers, if remove outliers, the average increase is 1.377 (overall) 1.326 (SIP), outliner is 3 months as max (3 companies) 1.52 1.52 1.51 1.47 1.44 1.44 Overall SIP N=81/89 1.38 N=49/54 1.36 2016 2017 2018 2019 2016 2017 2018 2019 5. Standard Annual Salary Increase - Direct labor Average increase trend 2016-2020 Direct labor refers to operators directly related with production. Suzhou SIP 8.10% 7.84% 7.21% 7.23% 7.20% 7.33% 7.13% 7.02% 7.03% 7.32% 7.04% 7.08% 7.09% 7.07% 6.70% 6.90% 6.50% 6.30% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Actual Forecast Actual Forecast 5. Standard Annual Salary Increase - Indirect labor Average increase trend 2016-2020 Indirect labor refers to office staff and white- collar personnel, such as an HR specialist. Suzhou SIP 7.26% 7.26% 6.71% 7.07% 6.49% 6.53% 6.70% 6.64% 6.81% 6.51% 6.52% 6.64% 6.53% 6.30% 6.48% 5.90% 6.20% 6.00% 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Actual Forecast Actual Forecast 5. Standard Annual Salary Increase - Job level Forecast average increase in 2020 General Managers and plant Production line leader managers locally hired A leader for one or non-relocated expats, head of several production the subsidiary company) line(s) or a shift leader Technician in operation workshop Individual contributor, has 76, professional knowledge or Director 6.30% skills in a specific area, 46, Functional heads works under supervision. 6.20% SIP Overall 30, 20, 5.80% 5.80% 39, 65, 38, 5.70% 5.60% 5.60% 62, 5.40% 5. Standard Annual Salary Increase - Industry Forecast average increase in 2020 7.09% 7.20% 6.86% 6.60% 6.25% 6.30% 5.83% 5.86% 5.67% 5.71% 5.60% 5.36% Electronic Machinery Motor Vehicle & Parts Plastics & Rubber Semiconductor & Chemical and Components Manufacturing N=15 Products Related Chemical Related N=7 N=15 N=7 N=5 N=5 Direct Labor Indirect Labor Y19 actual Y19 actual Y19 actual Y19 actual Y19 actual Y19 actual 6.00% 5.79% 7.17% 6.41% 7.19% 6.05% 6.30% 5.50% 7.20% 6.80% 8.50% 7.02% 7. Methodology ▪ The 2019-2020 salary survey data is collected online via lediaocha, a professional data collection and calculation website and tool ▪ The data is cleaned before download with a pre-calculation on basic questions such as demographic questions, yes or no questions, and collected all the sufficient data for further calculation ▪ Invalid data is excluded such as: duplicated responses, service industry, non-U.S. or European invested companies ▪ Cross checked the overall data and response amount with actual responses in each question to ensure the data and conclusion are linked reasonably and make sense ▪ All data is calculated by pivot chart with statistic significant proven ▪ Cross check on each year’s participants similarity to ensure the data has a continuous history 2017 to 2019 on average 83.9% companies continually participated the survey ▪ Did not add CPI into the data calculation. 8. Appendix- survey results summary General information Q1-Q9 Q6. Company's Location Q8.Industry Q9. The last month of your fiscal year Suzhou Industrial Park 54 Audio and Video Equipment 1 January 5 Suzhou New District 14 Automatic Equipment, Instruments, Meters & Weighing & February 0 Suzhou Xiangcheng District 4 Measuring Apparatuses 3 March 3 Suzhou Wuzhong District 0 Aerospace Products & Parts 2 April 1 Suzhou Wujiang District 4 Components & Parts, General 2 May 2 Suzhou Gusu District 0 Communications Equipment, Other 3 June 3 Kunshan 4 Electrical Manufacturing, Equipment & Wiring 2 July 2 Changshu 5 Electronic Components 7 Zhang Jiagang 2 Food, Fast Moving Consumer Goods (FMCG) 1 August 0 Taicang 0 Machinery Manufacturing 15 September 7 Other 2 Metal Manufacturing, Primary Metal Products, Fabricated 2 October 2 Sum 89 Motor Vehicle & Parts 15 November 1 Manufacturing and Reproducing 4 December 63 Plastics & Rubber Products 7 Sum 89 Q7. Scale of company Power, Energy, Mining 1 Less than 100 19 Pharmaceutical & Medicine 1 100-499 50 Semiconductor & Related 5 Textile Product Mills 3 500-999 11 Medical 4 Above 1000 9 Chemical and Chemical Related 5 Other 6 Sum 89 8. Appendix- survey results summary Macro Background and its Impact Guaranteed Year-end Salary Q10-Q12 Q13-Q16 Q10.