China Employee Benefits Index report on cities

The China Employee Benefits Index (CEBI) is the first index of employee social protection in China. Launched in 2012 and issued every two years, it aims to enhance the understanding of government departments about the benefits situation of enterprise employees, raising awareness among the general public about this issue, boosting the sense of responsibility of enterprises and public institutions and driving the development of employee social protection efforts in China.

January 2015 saw the publication of the 2014 CEBI report on large and medium-sized cities. According to the report, the CEBI in 2014 stands at 66.5, the “basic level”. As for the demand by employees for higher levels of social protection, only 47.5% of urban enterprises indicate a willingness to increase their contributions to employee benefits, with the rest expressing a preference for no change or declining to answer.

With the internationally established expert rating method incorporated into its indicator design, the CEBI comprises four grade 1 indicators and 22 grade 2 indicators over a range from 0 to 100: the higher the indicator, the better the situation. It is a comprehensive assessment based on systematic research and digitized information about employee benefit adequacy and equity, employee satisfaction and enterprises’ evaluation of benefit efficiency. Benefit levels are rated from one to five, i.e. low level, relatively low level, basic level, relatively complete level and full-fledged level. In 2014 the index stands at level 3, only meeting employees’ basic needs for social protection.

The report indicates that for the four grade 1 CEBI indicators in 2014, the adequacy index, equity index, satisfaction index and efficiency index are respectively 71.4, 62.6, 65.6 and 65.6, showing employee benefits at a relatively low grade at the basic level, the equity index being the lowest. According to research, enterprises have placed conditions on employee benefits. For example, over 50% of enterprises require a minimum number of years of service, over 40% require certain levels of work performance, nearly 40% make requirements about job grades, and nearly 30% restrict commercial insurance benefits to key positions or departments. According to the report, different kinds of enterprises and industries show vast differences in benefit delivery. State-owned enterprise (SOE) employees have the best social protection, with an index of 68.1. Foreign enterprises come second with 67.5. Private enterprises rank last with 65.1. SOEs cover a wide range of benefits, but adopt the strictest restrictions on benefit collection. Foreign enterprises have the highest equity, demonstrating the most lax environment for receipt of benefits. In terms of industries, the indexes for finance, banking and insurance are among the highest; employees in consumption and retailing, trade and logistics, management and consultancy, education and intermediary services, IT, internet, communications and telecoms, energy and petroleum also rank high on the list; while those in manufacturing and equipment production are worst. The index also brings out other issues. For example, the benefits that workers expect and those the enterprise actually offers show a mismatch between supply and demand; both enterprises and workers have an inadequate understanding and are ill prepared when it comes to health insurance and old-age insurance; some enterprises face financial constraints that prevent them raising their contributions to employee benefits; and there are large gaps between worker benefits among regions. In general, employee social protection levels in China need to be improved.

Based on a year’s study, the report is a joint publication by the Association of China Insurance Industry, the ACFTU Labour Relations Studies Institute, the Social Policy Research Centre of the Chinese Academy of Social Sciences and the Ping’an Old-age Insurance Company. A combination of a real-name online survey and on-site interviews sampled over 4,500 human resources directors and employees in 50 representative large and medium-sized cities in China.

  Source: ACFTU  2015-06-10

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