China's internet finance boom helps close salary gap with Hong Kong
The booming internet finance sector on the mainland has made the job market more attractive there as the salary gap between major Chinese cities and Hong Kong is set to further narrow.
The booming internet finance sector on the mainland has made the job market more attractive there as the salary gap between major Chinese cities and Hong Kong is set to further narrow with mainland employers either increasing pay perks to retain talent or offering higher pay to attract professionals.
On average, the salaries offered by financial firms in cities like Beijing and Shanghai are now 15 to 20 per cent lower than those in Hong Kong's financial industry, according to Simon Lance, regional director for recruitment agency Hays in China.
But a narrowing salary gap, a relatively higher cost of living in Hong Kong and better career progression opportunities on the mainland could help Shanghai and Beijing draw more global talent, he added.
The mainland's internet finance industry, encompassing online payment services, internet-based person-to-person lending platforms and online financial consultancies has grown rapidly in recent years amid Beijing's planned reform of the banking sector.
Internet finance is now regarded as the future industry leader by well-educated Chinese youngsters as they seek jobs in the sector.
"Competition to attract and retain capable employees has largely driven up the salary level," said Evan Guo, chief executive of recruitment firm Zhaopin.
"Hong Kong doesn't have an internet finance industry yet and it is expected that some IT talent and risk-control managers would be interested in relocating to Shanghai given the huge market potential here."
According to a survey conducted by Hays and Zhaopin, the mainland's financial sector has a high staff turnover compared with other countries.
The survey, of more than 1,000 respondents in the mainland's finance sector, showed that two out of every three employees had a relatively short tenure of two years or less in their last job.
Nearly 70 per cent of the respondents said they would ask for a pay rise in the next 12 months, the survey found.
Lance said salary is still a major factor in retaining staff in the mainland's finance sector, but added that employees are also increasingly looking for career progression.
Skill shortage on the mainland remains a key driving force for wage inflation while overseas-returned Chinese and experienced finance industry employees are targeted to fill the job vacancies available in the sector.
Ever since it announced ambitions to become a global financial centre by 2020, and started developing its free-trade zone, Shanghai has been ratcheting up pressure on Hong Kong.
As Beijing plans to break up the cosy monopoly enjoyed by the state-owned banks by reforming the interest-rate mechanism and introducing privately owned competitors, more opportunities are expected to open up in the internet finance sector.
Hays said employees also expect their future employers to have a stable company culture, transparent communications, innovative products and strong managers who give clear directions.
