SHANGHAI - Rising demand for skilled workers is set to push up wages in the eastern economic hub of Shanghai and neighboring cities in the Yangtze River Delta region, a survey by a domestic human resource institute has showed.

The survey by Shanghai-based CIIC HR polled 400 enterprises in Shanghai, Suzhou, Wuxi and Changzhou cities.

More than 80 percent of the respondents in Shanghai said they will raise wages by an average of 7.9 percent this year, up from an increase of 5.9 percent a year before.

The demand for workers in the region has increased in tandem with the strong economic recovery, the survey reported.

Many enterprises in different economic sectors are also competing for qualified workers with higher salaries and incentives, it said.

Competitors reportedly poached six out of 18 employees in the materials department of a Japanese trading company in Shanghai's Pudong district alone earlier this year.

"We had no choice but to raise the salaries of those who stayed by an average of 8 percent in April to keep them," said Michelle Ye, a human resources manager at the company.

The competition for talent also seems to be getting keener, the survey reported.

Up to 40 percent of the respondents in Shanghai said they will recruit more workers this year.

Experienced professionals in research and development with strong academic backgrounds are in most demand, the survey showed.

Labor-intensive industries in the Yangtze River Delta region are also in dire need of more staff, especially in Changzhou, a city in Jiangsu province.

Up to 56 percent of new positions in Changzhou enterprises will be devoted to manufacturing, the survey showed.

Salaries in Shanghai are higher than those of Changzhou, Wuxi and Suzhou.

An engineering manager in Shanghai receives an annual income of 236,039 yuan ($34,555) on average, dwarfing the 175,640 yuan in Suzhou, 132,940 yuan in Wuxi and 95,643 yuan in Changzhou.

Zhao Haiyang, author of the survey report, said enterprises need to calculate the costs from human resources movement in a rational way.

Enterprises need to "balance internal distribution equality and efficiency when competition is fierce", Zhao said.

The report also showed an apparent income gap between different positions. In Shanghai, a procurement manager's annual income is 276,460 yuan, which is about 5.5 times that of a production team monitor.

China Daily

(China Daily 05/28/2010 page2)