China represents a massive opportunity to providers of recognition and loyalty rewards programs providers.
As of 2011, the population in China exceeded 1.3 billion people. The population in China continues to grow at a rate of approx. 0.5% annually. 91.5% of the Chinese population is Han with the other 8.5% representing minority groups. The official language in China is Mandarin but there are many additional dialects spoken throughout the country.
The literacy rate in China is 92% and China has a labor force of approximately 780 million people, half of whom are employed in urban regions. The labor force in China is split into three primary categories; agriculture (38.1%), industrial (27.8%) and services (34.1%).
Employee retention continues to be one of the greatest challenges faced by employers in China. Recognition (compensation, title/status and fringe benefits) is one of the most important factors as it relates to Chinese employees and whether or not they remain loyal to an employer.
As a result of steady economic growth, China’s business landscape has seen unprecedented growth, giving employees the upper hand. In the areas of finance, technology and management, employers have difficulty in both finding and retaining employees. As a result, the job market has become unbelievably competitive.
Over the past five years, salaries in China have risen well above the rate of inflation. Salary increases have averaged 9% per/year and managers are promoted at a much faster rate than other managers in Asia. The labor market is so competitive that a manager who jumps from one company to the next can reap, in many cases, a promotion and a 40% increase in pay. This leaves companies scrambling to come up with innovative ways to keep their employees happy.
Annual bonuses are traditionally paid in late January or early February and do not typically exceed one month’s salary.
Loyalty programs along with performance-based bonuses are a relatively new concept in China and have been welcomed with enthusiasm by the younger generation of workers. The Chinese companies that yield the highest employee retention rates have done so through adopting a “caring leadership” approach, forging stronger bonds with employees leading to increases in employee loyalty. Caring leadership can range from providing personalized attention, learning and development opportunities, to organizing loyalty programs that offer rewards for travel and entertainment.
The Chinese are generally very sensitive to their status within an organization. The title of “Director,” for example, seems much more impressive than “Manager.” The younger generation in China’s private sector is not willing to wait for promotions based on years of experience. They expect to be rewarded immediately for their accomplishments. This is one reason that employee recognition and rewards have enabled companies to improve employee loyalty.
Loyalty programs providers must work with their clients to understand the primary concerns of employees and to examine how best to structure benefits packages that will increase loyalty to the organization. Loyalty programs offered by the employer can play an important role in attracting and retaining Chinese labor.
Employers are constantly looking for ways to improve employee retention and loyalty, which is why there is a vast market for loyalty program providers in China. The Chinese labor force represents one of the most tech savvy workforces in the world so loyalty programs providers must offer employers cutting edge technology if they plan to compete in the Chinese marketplace. Web-based technology delivered through Software as a Service is almost an expectation when it comes to offering these services to companies in China.
Success in the Chinese marketplace will require a loyalty programs system that is web-based (delivered through Software as a Service technology). The loyalty programs system must be written in the languages spoken in China and must deliver rewards that the average Chinese employee would be interested in having. Employees should be able to access and redeem their rewards from anywhere there is an internet connection and rewards must be able to be retrieved in China. Program providers stand to achieve huge ROI by entering the market in China.
If you are an Employee Recognition, Incentive or Loyalty program provider who is interested in entering the market in China with the world’s leading “white labelled” Software as a Service (SaaS) based system delivering global rewards, please contact Rob Purdy at 905-477-3971 at Global Rewards Solutions or visit www.globalrewardsolutions.com.