Bonuses key to preventing New Year job hopping
Published: Feb 13, 2014 06:38 PM Updated: Feb 14, 2014 12:23 PM

Illustration: Chen Xia/GT

A new round of job hopping starts in China every year after the Spring Festival.

This week, I received a number of e-mails from clients and friends informing me of their new positions with new employers. I've also seen plenty of enquiries about possible career changes expressed on social media platforms such as QQ, WeChat and Sina Weibo. These job hunting hopefuls should be in luck: lots of companies are recruiting at the beginning of the Year of the Horse.

This week I was invited into a WeChat group for alumni from the School of Journalism at Missouri University. The group chat currently has about 40 participants; most of them have already returned to China. In the group, we talk very little about our old professors or campus anecdotes, but instead focus mainly on career issues.

Those who are top executives have been asking whether anybody is interested in joining their companies, putting their contact information in the group and introducing the businesses they work for. They readily admit that a drain of professional staff is always a headache, especially at the beginning of the New Year.

With possible good opportunities at hand, people are keen to learn more details from the executives. In the interests of privacy, these follow-up conversations are always transferred to a new window to avoid any possible trouble.

The alumni group phenomenon reflects the post-Spring Festival job market in China.

According to surveys by both overseas and domestic HR consultancies, employees expect to receive a pay increase of 10 to 30 percent in 2014. More than half of employees surveyed are considering a job hop in 2014, with one survey showing that more than 80 percent of respondents plan to change employer.

There are several reasons why the percentage is so high. Shanghai's high living costs, especially skyrocketing house prices, undoubtedly drive people to seek higher-paying jobs. Everybody dreams of getting a pay rise to reduce the distance between their bank balance and the price tag of homeownership. But nonstandard HR management and opaque contract clauses also play a role.

Many employment contracts stipulate that, for example, an employee's annual bonus is determined by the performance of both the company and the individual. The clause is open to interpretation, but the employee is always passive.

For the majority of Chinese companies, the fiscal year coincides with the lunar new year. It's very common for employees to receive their year-end bonus just days prior to Chinese New Year. Without a predetermined figure in their employment contract, many people won't know how much bonus they get until the moment they receive a text message from their bank or a bonus stub from the finance department.

Not even the most gifted writer can describe the exact feelings of Chinese people the moment they learn their bonus figure. It might be anything from ecstasy to heartbreak. Every employee is expectant about their year-end bonus. That figure represents the answers to many questions: whether the boss is satisfied with me; whether my value is appreciated in the company; whether the company deserves my hard work; whether I should stay in this company and this industry.

I would go so far as to say that many people make a split-second decision at this very moment, one that is not always favorable to the employer. From the perspective of an unsatisfied employee, they think they are underpaid and even cheated by their employer, so they take revenge by leaving the company. From an employer's perspective, after one year of coaching and trust, they lose a professional. The employers won't think they did anything wrong as there was nothing in the contract to determine how much bonus they should give to employees.

It would seem to be a lose-lose situation. But the problem is not that hard to solve.

The ambiguous year-end bonus policy adopted by many Chinese companies is partly responsible for the messy job market. A transparent system and the principle of honoring the contract is one possible solution to avoid an unnecessary exodus of talent.

For sustainable long-term development, companies need clearly outlined regulations to guarantee steady progress and achievements. Talent plays the most important role in the development of any company. A standard and transparent contract is not hard to draw up. The bonus figure won't be sensitive so long as it's based on budget and past experience. With a clear and detailed contract, mutual understanding can be reached between the two sides. If employees don't have unrealistic expectations about bonuses, they won't feel great disappointment when they receive the final sum.

Because of the timing, bonuses can greatly influence the holiday mood. I have sweet childhood memories based on the thickness of the hongbao my parents received from their boss. It's not an exaggeration to say that a bonus can impact an employee's entire family.

The Spring Festival is a good occasion for friends and relatives to communicate about their careers and future plans. Information about job opportunities is often shared during the holiday, which also contributes to the rise of job hopping in the New Year.

Wise company executives should learn from past lessons and avoid an inauspicious start to the year caused by a brain drain.

The author is the managing editor of Global Times Metro Shanghai.