Companies in China are struggling to retain their professional and support staff, and face either having to pay higher salaries or excessive recruitment costs, according to research by Mercer Human Resource Consulting.

A survey of over 100 organizations in China, many of which are multinationals, shows that 54% have experienced an increase in turnover for professional staff since last year, while 42% have reported higher turnover for support staff.

The survey also reveals that the average tenure for 25-35 year olds (the age group targeted most by multinational companies) fell from an average of 3 to 5 years in 2004 to just 1 to 2 years in 2005.

Brenda Wilson, Principal at Mercer, says, "The employment market in China has ignited in recent years, as more multinational organizations set up operations there and local companies expand. Individuals with transferable skills have become a valuable commodity, and companies are battling to keep hold of them."

The survey found that 83% of organizations offer healthcare and related insurance, while 41% provide health and fitness plans and 24% offer flexible working. Just 21% offer supplementary pension plans and 10% provide subsidized loans. But results also show that 44% of organizations believe their employees are dissatisfied with the benefits on offer.

Offering staff overseas assignments is deemed the most effective tool for developing employees' careers, although only 42% of organizations provide such opportunities.

According to the survey, organizations report that the average cost of replacing staff at any level is around 25% to 50% of annual salary.

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