Making a job offer to the candidate you want to hire is always an anxious moment. Employers want to provide employees with the most attractive package without overpaying. Here are a few pieces of advice for making offers to candidates in Asia.
Never ask a candidate his/her expectations. From time to time, I have had clients who, when preparing an offer, have asked for the candidate’s compensation expectations. Your candidate’s list of expectations may be long and creative and include many items you never dreamed of offering. If you do not meet the candidate’s expectations, you may disappoint the candidate. Asking the candidate for his/her expectations puts the negotiating power in the hands of the candidate and puts the employer at a disadvantage. My advice is to just put your best offer on the table. In China currently, this generally means a package that is +/- 15% greater than the candidate’s current package.
In China, candidates always negotiate the offer. In the United States, you may find that your chosen candidate accepts the first offer you make. Not so in China. Candidates will always negotiate to make sure they are not leaving anything on the table.
Asia employees sometimes prefer “guaranteed” income offered in base salary to “at risk” income in a bonus. They may be willing to take a package that is lower in order to have a higher percentage of “guaranteed” income.
Notice periods may be very long. In order to improve retention rates, some employers in China have included long notice periods in their employment agreements. The agreements may require that employees give 2, 3 or even 6 months notice before they can leave the company for their next position. The rationale is that this will cause employees to reflect more carefully before job-hopping. If you are in a hurry to fill a role, it is important to be aware of the candidate’s notice period.
Expat packages are not always “standard.” Normally the compensation packages for expatriates who are relocated to foreign countries by their employers include standard benefits like tax equalization, children’s education and housing allowances. Other benefits may also be included. As more and more foreigners stay in Asia to live and build careers, they may be willing to forgo some expat benefits when they change employers. These expatriates may not expect the same level of benefits that are typical in corporate relocation packages. Their expat benefits may be more “a la carte” than “prix fixe.” Foreign hires in China or elsewhere in Asia may receive housing allowances but not tax equalization, home leave but not children’s education. They may be less expensive to hire than you expect.
Compensation Benchmarking:
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