Bosses alarmed as turnover rate hits peak of 23%

Chinese companies are finding it increasingly difficult to retain staff, with turnover rates tipping 23 percent in some industries, a survey has revealed.

The survey, conducted by Nasdaq-listed human resources service provider 51job.com, asked more than two million employees and more than 300 HR managers in 26 Chinese cities about their attitudes toward job hopping.

Across all sectors, high-tech companies in telecom and information technology industries reported the highest turnover rate of 23.5 percent on average this year, compared with 15.4 percent in 2004.

Computer and IT company employees, with an average age of 25.8 years old, saw an average job tenure in the same company of less than two years, the survey said.

Meanwhile, turnover rate in manufacturing industries such as textile, hardware and home appliances also climbed from 16.2 percent in 2004 to 22.1 percent this year.

Despite a less steep surge, average figures in modern service sectors also rose two percentage points in the past four years. An average of 15.7 percent service sector workers quit their jobs this year, the report said.

"Chinese mainland companies' turnover rate has been on the rise in the past three to four years ... and we see no signal for this upward trend to slow down in 2008," said Lu Nan, vice president of 51job.com.

The most frequently cited reasons for employees to resign was low pay, lack of development, going abroad for study, poor office chemistry and personal health conditions.

But Lu added the country's shortage of professionals plus growing pay rise demand brought by rising food prices were factors in the continuous high turnover rate.

The highest job hopping rate involved employees with two to three years of work experience, according to the survey. Average turnover rate among this group reached 36 percent.

Analysts said it was because a couple of years work had endowed these ambitious young people with some actual experience and more confidence. "They are the most likely to seek a change if they can't be given a promotion or better pay," Lu said.

Survey respondents reported they were expecting a pay rise of 30 percent in the new year.

Although higher pay rates can persuade workers to stay, analysts suggested employers should offer more promotions and training to retain staff.

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