Contrarians suffer from an obsession with getting at the unseen forces in any situation; forces that the majority cannot see.

They do this when the majority is heading in the right direction, when the majoity are heading in the wrong direction, and even when there is no direction to be found. Every now and then we get it right, and this is one of those times.

The only guarantee of the correctness of my analysis is that I have invented a syndrome for the malaise that everyone is suffering from. It’s got a name - Beijing Olympic Delusional Syndrome - so it must be true, right?.

The symptoms are an irrational belief in the ability of China, and the Chinese government, to weather the economic storms that are buffeting the world economy, and ultimately come up smelling of roses. Chinese exceptionalism, if you like.

Twenty years of solid economic growth, or 10 years of continuous employment for every professional that you know, will do that to you. Success breeds complacency. It should come with a government warning that says it ‘may cause blindness’.

The false expectations of so many Chinese professionals is not a problem that you have created but it is going to be your responsibility as a HR Manager to deal with it.

People who have been led to believe that everything is going to be better, and that their efforts will be rewarded, will tend to want to find a scapegoat. Staff will put this on your shoulders because you are the only recourse they have when you have to deny them their ‘right’ to 8-9% salary increases, or you reduce over-time, or end the almost continuous merry-go-round of promotions.

Seeking Guarantees

Support for the delusional view comes from a study by Fudan University’s Journalism School. They find that graduates in Shanghai still expect high salaries, and want the security and guaranteed income that comes from working for government agencies.

A full 60% of them expected salaries between 3,000 yuan (US$436) and 5,000 yuan a month, though 46.% of them think this year’s wage levels will be a little lower than a year ago. That 46% are the ones who will actually get a job. Some graduates are looking for salaries as high as RMB 8,000 (sic) a month so it may be a while before we seen any of those lads and lassies in the workforce.

Graduate employment is a huge issue for the government because there are tens of millions of new graduates coming on-stream in China, and they are capable, vocal, and bored. For HR this is an opportunity to build a team of new, trainable staff, at a rate that will not break any budgets. That these young people might be brought in only as interns is also a strong opportunity to build new functions or departments.

The survey indicated that graduate salaries were expected to fall this year to about RMB 2,604, a more than 10% decrease.

The survey found that foreign-invested enterprises offered the highest average starting salaries at RMB 3,627 yuan in 2008. It was followed by joint ventures (RMB 3,371), private enterprises (RMB 2,548) and state-owned enterprises (RMB 2,236).

Oddly, the Fudan study included a Graduate Employment Confidence Index. The index was the lowest recorded, and was even lower for prestigious schools than for average schools. This tends to support the delusional view because it begs the question:

‘Why do graduates, with the lowest employment confidence ever, simultaneously expect to get salaries (and jobs) with high salaries?’