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Chinese businesses in 2017 recorded the lowest salary increase rate since 2010, according to a study from global professional services firm Aon.

The study, Human Capital Intelligence Study 2017, recorded an average salary increase rate of 6.5% (excluding promotion). The Internet industry saw the biggest decrease in salary growth this year as it was down by 1.3% to 9%, compared with the same period of last year.

Salaries in China are projected to increase at an average rate of 6.6% in 2018.

“In recent years, salary related costs have been increasing. Companies must focus on differentiated pay with the aim of driving performance,” Zhang Zhuolei, COO of Aon Hewitt Greater China, said.

Meanwhile, in 2017, the average employee turnover rate was 19.7%. Of this, 14.4% of turnover was voluntary while 5.3% was involuntary. While the average turnover rate has gone down by 1.1 points compared to last year, the involuntary turnover rate has increased by 4.7 points in engineering; 1.9 points in pharmaceutical FIE; and 1.1 points in logistics.

“Faced with the pressure of an economic downturn, disruptive technology, and changing regulatory environment a number of enterprises have taken the initiative to transform their businesses,” Zhuolei said. “Organisational restructuring, business divestitures, and M&As have resulted in an increase in involuntary turnover. In addition, some sectors have experienced increase in voluntary turnover due to more job opportunities.”

Meanwhile, the study also showed that the continuous demand for AI has resulted in an acute shortage of talent in the Chinese market.

“A limited number of AI university graduates enter the job market each year, exacerbating the already-tense talent supply and pushing up their compensation levels,” the study stated.

According to the study, senior machine-learning engineers saw an average salary increase of about 20% in 2017, and data scientists received an average increase of 15% to 20% - much higher than the industry average of 7.4%.

The study covered more than 3,000 enterprises in first-tier cities such as Beijing, Shanghai, Guangzhou, and Shenzhen, as well as major second-tier and third-tier cities across China.