Labor Market and Salary Report

Downward Trend of Salaries Continues: German Chamber’s Labor Market & Salary Report 2024/25

Published on August 12, 2024

In August 2024, the German Chamber of Commerce in China has published the 17^th edition of the Labor Market & Salary Report, a comprehensive benchmark for wages of German companies in China. “The ongoing trend of wage growth moderation is emblematic of the challenges that German companies are facing in the market” says Moritz Berrenberg, Chairperson of the Board of German Chamber of Commerce in South & Southwest China. He adds: “The prospect of even smaller salary increases in 2025 are indicative of the relatively low level of business confidence among German companies as they head into the coming year.”

Key findings:

• Expected salary growth for 2025 below four percent: German companies operating in China are anticipating a salary growth of 3.8% for the year 2025, 0.7 percentage points below the projection of 4.5% for 2024.
• Effective salary increase continues to decline: In 2024, German companies in China raised salaries by 3.9% across all industries, a steep decrease of 0.9 percentage points from the previous year. This marks the lowest value since the question was first asked in 2019. Notably, no industry exceeded its projected salary increases.  
• Share of companies employing foreigners hits all-time low: The percentage of German companies employing foreigners in 2024 reached an all-time low of 65%, a decrease of 11.2 percentage points from pre-pandemic levels. While bigger companies are more likely to employ foreigners (81%), only 43.6% of companies with less than 50 employees do so, a decrease of 18.8 percentage points compared to 2019.  
• Higher compensation remains the primary reason for replacement of foreign workers: 68.5% of German companies name differences in compensation as the main reason for replacing foreign employees, an increase of 6.2 percentage points from the previous year. 

More HR data of German companies in China:

• Average tenure: 6 years
• Sick leave per year: 3.8 days
• Annual leave per year: 12.6 days
• Annual employee turnover: 8%

About the Labor Market and Salary Report 2024/25

The 17^th edition of the Labor Market & Salary Report is based on an online survey conducted between April 15 and May 31, 2024. Overall, it received responses from 446 member companies of the German Chamber. The report is a valuable resource for executives and HR professionals of German companies in China. It provides a comprehensive benchmark of the wage developments, as well as the latest trends and hottest topics on the Chinese labor market.

To download the full version of the report, please go to the Member Download Area in the Member Directory.