Photo: via AP
Chinese executives have something to look forward to.They saw their salaries inflate at a rate of 8 per cent annually last year, compared to a 3 per cent rate for execs in the US. If this current trend continues, top execs in China will have a higher spending power than those who run companies in the US by 2017, reports ECA International.
In the ECA’s National Salary Comparison, the company says that the spending power (based on cost of living) of an executive in China was at only 57 per cent compared to their counterparts in the US in 2007, but this number has increased to 75 per cent today — and will surpass that of US execs in a few short years. Spending power is affected by not only salary but other factors, including inflation, tax, exchange and social security rates.
This shift could have huge implications for the global war on talent. It may get more difficult for US companies to recruit Chinese executives.
“Currently a senior Chinese employee is likely to see their spending power increase if they are sent to the US to work,” says a spokesperson for the ECA. “But this could change in the future and companies offering Chinese executives coming to the US a salary based on the local US salaries could well find that the package is no longer enough incentives for them to accept the assignment.”
Check out the chart below:
Photo: ECA International
To produces a transparent comparison, ECA converted all salaries to euros at the exchange rate on July 1, 2012 as a common currency.
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