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The Honolulu Advertiser
Posted on: Sunday, February 26, 2006

Young job hoppers cause chaos among China's businesses

By Don Lee
Los Angeles Times

SHANGHAI, China On the day after the weeklong Chinese New Year holiday, Zhu Aihua went back to work to find that seven desks around hers had been emptied.

Her colleagues at an Internet company in Guangzhou had removed their tea mugs, pictures and other personal belongings. They hadn't taken an extended vacation. They had bolted.

"It's like this every year," said Zhu, 25, a marketing specialist. Then she glumly added: "I will have more work."

Similar scenes are playing out at workplaces across China, which is in the throes of a job-hopping crisis. Amid booming economic growth and an erosion of traditional values, this land of the socialist "iron rice bowl" where people once served their state-owned employers until death has become a revolving-door society.

China's overall turnover rate jumped to a record 14 percent last year, from 8 percent in 2000, according to a survey by Hewitt Associates. That doesn't include people who were fired. The turnover rate in the United States is about 3 percent, including firings.

In bustling areas such as Shanghai and Guangdong Province, many companies lose one out of three employees every year.

Experts say a shortage of skilled workers is the underlying cause of the high turnover and its effects: large salary increases and extensive poaching of high-performing employees.

Turnover is particularly rampant among urban China's youngest workers, who grew up in a generation when Beijing allowed only one child per family. These workers, in their early and mid-20s, enjoyed more prosperity and have higher expectations of what employers and life should offer. Government researchers say a record 4 million fresh graduates will be entering the job market this year.

"Young people just cannot calm their hearts," said Cui Yixiong, general manager of City Supermarket, a private chain. Cui says more than half of his new recruits don't last a year on the job. He has seen so many quit that he can tell who'll be next by their lack of interest at work.

"When I was young, I believed it took at least three years for you to learn one industry thoroughly," said the 39-year-old. "Nowadays, many young people will quit if they aren't promoted after one year's work."

That has driven up costs for employers, disrupted business and contributed to wage increases. For higher-skilled jobs, companies have started offering some of same carrots as in the West: stock options, retention bonuses, housing allowances. Still, many young workers say employers don't do enough. Benefits such as medical insurance and pension plans tend to be similar from one workplace to the next. Training programs aren't common, they say, and many companies don't offer ample opportunities for advancement.

Job-hopping also is high in rapidly developing economies such as India, and it was widespread in the West in places like California's Silicon Valley during the boom years of the 1990s.

But China's turnover crosses industry lines as well as job and pay classifications, thanks to the sweeping changes in the demographics and economy of China.

For company managers, the worst time is around the Chinese New Year, when most workers receive their annual bonus, which can be several times their monthly salary. Some will bolt if they're dissatisfied with their 13-month pay, as it's called. Others who had planned to leave anyway will hold on just long enough to take the bonus and run.

Experts say China is now going through what Taiwan and South Korea went through when they saw a burst of job opportunities and galloping salary increases.

Consultant Hewitt's latest attrition study found one striking difference: Money was the primary factor in prompting Chinese workers to switch jobs, whereas career opportunities and work processes were more important to other Asian employees.