The year of 2009 has been extraordinary for most businesses across the sectors all over the world. In addition to the standard examination of the compensation of managers, professional/technical occupations, skills and support people, there was also attention paid to the impact of the Global Financial Crisis (GFC. The outcome revealed the severity of the GFC impact on these companies, while also looking at the participants’ confidence in the recovery; especially with regard to the China market.

The salary data was categorized according to the four groups as above and in every group, analysed in groups of Expats, Returnees and Locals. Due to the different grading systems used in every company, it has been necessary to set up our definition for various occupations counted in the Swann surveys.  

As in previous studies, we have designated strata or layers for each category

• Management has four layers:

• Geologist has four layers:

• Technical/Professional has five layers:

• Support Service has four functions:

 Technical, Finance, HR & Admin and Support Service.

 In order to make proper comparisons, we have converted all the currencies to USD. (From the spreadsheets of occupations and salaries paid provided by the participating companies, locals are mainly paid in RMB, while Expats and Returnees can be paid in currencies such as USD, CAD or AUD.)  

The survey was administered during either a face-to-face or telephone interview, dependent on company preference. Each company nominated a representative to undertake the interview. Participant companies were provided with a copy of the survey questionnaire prior to the salary spreadsheet submission. The quantitative responses were analysed using SPSS to obtain basic frequencies, compare responses and test the correlations.  

This Report is aimed to share the valuable findings of our salary survey in 2009 as well as to assist the international mining companies in China compensation and staffing trends. 

Definitions        

• “Expat” is a non Chinese born person working in China.
• “Returnee” is a Chinese born person who has worked professionally overseas. They may be a Chinese citizen still or have taken foreign citizenship. They may be engaged on a contract that includes all of the benefits that are associated with a foreign Ex Pat or on salary only.
• “Local” is as Chinese born person who has not been employed in a foreign enterprise overseas. They may have studied abroad.
•  “Country Head” is used to describe the person who is the most senior person in the operation in China. They could be variously described as President, Managing Director, General Manager, or Chief Representative.
• “Executive” is used to describe a position level where the person is a Business Unit Head. They will be described as Executive Geologist, or Executive Manager for example when they are the most senior person in their BU in China. Their company designation may be Vice President, General Manager or some other executive title.
• “Senior” is used to describe the level immediately below the BU head. This person will probably head up a team and have others directly reporting to them.
•  “Middle” will indicate that the person is subordinate to a more senior manager or professional. They will have a number of years experience.
• “Junior” will indicate that a person is relatively inexperienced. They could be a recent graduate and will be at or near to entry level to the company.  

Findings 

The study looked at the rates paid to Expats, Returnees and Locals, the gap between each groups, the alteration compared with the outcome of 2008 and the changes in the employment breakdown caused by the general business climate, especially by the Global Financial Crisis.  

Despite widespread changes to the labour market across the world, and in accordance with the increasing demand for mining talent in China, the local staff have traditionally been, and continue to be, under-compensated in the mining sector here.

It is not surprising that the salary gap between Expats, Returnees and Locals is narrowing, and the trend is most obvious between Expats and Returnees. In some levels, the gap between Expat and Returnees was reversed, for example in the group of Management—Country Head, the mean of Returnee ($284532) overran that of Expat ($263110).  

While perhaps  temporary, the retreat of Expat from the China market saw many Local talent promoted to higher levels, with a salary increment as well. Although this extension has not yet brought the Local to parity with the Expat yet, but there is a definite trend of “localization” that was given a boost by the GFC.  

Another interesting issue that has emerged in the 2009 survey is regarding the mining practitioner’s gender. Analysis of the quantitative data provided by the most of the participants indicated that males comprise the majority of the workforce, except for the Admin and Support function. There is some data in this report that examines the gender balance. 

The survey examined the impact of the Global Financial Crisis (GFC), its consequences and influences to the international mining industry in China. The study also has compared with the data of 2008 and 2009, analyzing the salary information before and after the GFC. The 2009 data was collected during June/July and all the salaries are recorded as annual basic salary. The currency was converted to US dollar, and the exchange rate at the time of the study  was 1$=6.84RMB. 

Management  

Country Head

The representation of Country Heads was distributed along similar proportions to the 2008 study. As in the past three years’ study, this group was only occupied by Ex Pats and Returnees. The bulk of Country Heads were Ex Pat, which accounted for 80% of the category, and it was fourfold of Returnee, no Local were at this level. Compared with 2008, the percentage of Ex Pats in 2009 remained steady slightly increased by 2%, while compared with 2007 the proportion of 2009 has an increase of 15%.

The graph below shows the range of salary paid to the Country Head lwas from $123,000 to $614,000. The mean salary paid to Country Heads in the 2009 study was $267,394, a decrease of 6% from the rate paid to Country Heads, in 2008. And this was the first salary drop to Country Heads reported in Swann Survey since 2006.

                                                Graph 2: COUNTRY HEAD SALARY

Ex Pats’ mean was $263,110 in 2009 study, which was a 6% decrease compared with the 2008 data. On the contrary, Returnees mean has dramatically increased by 70%, compared with that of 2008. Returnees mean was $284,532 and, for the first time it exceeded the Ex Pats’ mean. In fact it was  6% greater.  

There were 33% Returnees in the highest end of the scale, while the Ex Pats only accounted for 8%. The repatriation during the GFC of many Country Heads who were on Ex Pat assignments may be the root cause of the Ex Pats mean being lower than 2008. The Ex Pat distribution was fairly evenly spread across the category, but Returnees were grouped at the lower and higher ends of the range.

There were no significant factors influencing salaries in this group, except that longer working experience may have positive correlation.

 

Executive Management

 

People are assigned to this group for the study if they are the Business Unit Head and most senior person in the BU in China. The personnel breakdown of this group is very different from Country Heads.  The most significant feature has been with regard to the growth in Local talent’s representation. Since 2007 when the percentage of Local people in the “Executive Management” category doubled that of 2006, Local talent has continued to boom and became the majority in this group in 2009. The pie chart below shows the representation of this level.

 

Graph 4: EXECUTIVE MANAGEMENT REPRESENTATION

                             

 

The graph below shows the distribution of the salary groups in this category and it can be seen that the largest proportion fall into the $17,500 - $84,600 range. 

 

Graph 5: EXECUTIVE MANAGEMENT SALARY

 

The mean for each group was Ex Pat $196,750 Returnee $187,959 and Local $118,188.

 

Although the Ex Pats’ mean for Country Heads  saw a decrease,  in the Executive Management mean for Ex Pats increased 30% from 2008 study. This movement was counter to the more senior Country Manager Ex Pat mean, reported above. Returnees mean has declined by a moderate 6%.  Locals mean increased by 34% from 2008 and has the largest proportion in this category. However, the mean for Locals was still considerably lower than the Ex Pats and Returnees. As the bar chart shows below, 64% Locals were in the lowest end of the scale and this pulled down the average rate for this group.