 | Higher wage costs in China than in India, according to a survey by Mercer Human Resource Consulting. |
The report shows that for 95% of the 42 job roles examined, average base pay is higher in China than in India. While pay differences are less stark at lower levels, some senior managers and professionals in China earn more than double their counterparts in India.
Mark Sullivan, Worldwide Partner at Mercer, said: “China and India have become prime locations for investment by multinational organisations because of their skilled labour and low wage costs. Companies are increasingly looking to outsource their back-office operations to these countries to reduce overheads.
“While it is far cheaper to employ staff in both China and India than Europe or the US, India appears to have the advantage of slightly lower wage costs.”
“When global companies compare China and India as places to outsource their operations, wage rates are only one factor in the equation,” said Steve Gross, a Worldwide Partner who leads reward strategy consulting at Mercer and who advises US-based multinationals. “Organisations need to weigh up other operational costs, as well as factors such as proximity to markets, to determine the most cost-effective option. They can then focus on the type of rewards program that will attract and retain the right level of skilled workers.”
According to the survey, the average pay increase in India over the last five years is 11.5% compared to 7.5% in China. India currently has the largest population of English speakers outside the US.
“The Chinese market is very complex, and wage rates can vary considerably,” noted Jeff Fuller, Mercer’s rewards business leader for greater China, based in Shanghai. “Salaries in the corporate centres like Shanghai, Beijing, and Guang Zhou are some 20% higher than in other large cities. The pay gap is even wider in more rural areas.”
Copies of Mercer’s report China and India: comparative HR advantages cost US$960 Buy Now
