Fueling Sustainable Business Growth: Annual HR Health Check
In today's rapidly evolving business landscape, a company's competitive edge is driven not only by technological innovation and strategic market positioning but also by the vitality and effectiveness of its internal team. However, many businesses overlook the health of their human resources (HR) systems in the day-to-day operations, allowing potential issues to accumulate. Over time, this can lead to reduced efficiency and competitiveness. The annual HR health check is a strategic tool designed to identify and address these issues early, ensuring sustainable business growth.
Why is an HR Health Check Essential for Businesses?
- Preventing Potential Risks: Issues within the HR system, such as high employee turnover, inadequate management performance, or compliance gaps, are often not easily identifiable at their early stage. Regular health checks help businesses detect these risks proactively, preventing problems from escalating.
- Enhancing Organisational Efficiency: The health check process provides businesses with a clear understanding of whether their current HR allocation is optimal, helping to identify resource wastage or over-concentration. This insight allows businesses to optimise workflows, reduce internal friction and enhance overall operational efficiency.
- Boosting Employee Satisfaction: By examining factors like employee benefits, career development opportunities and the work environment, businesses can better understand employee needs, uncover communication barriers and address any cultural conflicts within teams. This leads to improved team cohesion, greater employee satisfaction and loyalty and the development of a positive organisational culture.
- Supporting Strategic Goal Achievement: Human resources are a core asset of any business. A healthy HR system provides robust support for achieving strategic goals, ensuring that the organisation maintains a competitive edge.
What Aspects Does an HR Health Check Cover?
- Compliance and Risk Management: Ensuring full compliance with labour laws, social security contributions, employment contracts and other aspects of HR-related regulations, while identifying and managing potential labour law risks.
- Talent Structure Analysis: Conducting comprehensive analyses of factors such as age, gender, educational background, and professional skills to ensure the team’s diversity aligns with the company's strategic goals.
- Organisational Structure and Job Positioning: Assessing whether the organisational structure is logical, job responsibilities are well-defined, and identifying any redundancies or gaps within the team.
- Recruitment and Talent Management: Evaluating the effectiveness of the recruitment process, the adequacy of talent reserves and the fairness and transparency of employee promotion mechanisms.
- Compensation and Benefits: Reviewing the competitiveness of the compensation structure, the attractiveness of benefit policies, and ensuring compliance with regulations.
- Performance Management and Incentive Mechanisms: Assessing the effectiveness of the current performance management system and evaluating whether incentive mechanisms are unlocking employee potential.
- Training and Development: Evaluating the training system’s alignment with the company's strategy, talent assessments, and performance improvement plans, as well as the clarity and support for employee’s career development paths.
- Corporate Culture and Employee Satisfaction: Collecting feedback from employees through questionnaires, interviews and other methods to gauge their sense of identification with the company and satisfaction levels, while identifying potential issues within the corporate culture.
Our One-Stop HR Health Check Solution
As a trusted HR service partner, we provide a comprehensive HR health check solution tailored to your business needs:
- Customised Check Plan: We tailor the assessment process based on your company's unique situation and industry characteristics, ensuring the evaluation is relevant and effective.
- In-Depth Data Analysis: Using advanced tools and methodologies, we conduct a thorough analysis of collected information, providing a holistic assessment of your HR system while identifying key areas for improvement.
- Expert Consulting & Recommendations: Our team of HR specialists provides actionable insights based on the assessment, including optimising organisational structures, enhancing performance management and refining compensation and benefits strategies.
- Implementation Guidance & Monitoring: Beyond recommendations, we assist businesses in developing practical implementation plans, offering continuous guidance and tracking to ensure effective execution.
- Ongoing Support & Optimisation: We establish long-term partnerships, providing regular HR health monitoring and continuous enhancements to help your business maintain a strong and efficient HR framework.
China Updates
Accounting and Taxation
STA Announcement on Optimising the Annual Corporate Income Tax Return
Announcement [2025] No.1 of the State Taxation Administration (STA)
To align with the Corporate Income Tax Law, the STA has revised certain statements in the Annual Corporate Income Tax Return (Category A, 2017 Edition) and related instructions. Key changes include:
Cancellation of Certain Schedules: The Schedule of Tax Exemption, Reduced Income and Weighted Deduction Incentives (A 107010) and the Schedule of Income Tax Reduction and Exemption Incentives (A 107040).
1. Revise the templates and completion instructions for the Annual Corporate Income Tax Return, including:
- the Annual Corporate Income Tax Return of the People's Republic of China (Category A) (A 100000)
- the Schedule of Asset Depreciation, Amortisation and Tax Adjustment (A 105080)
- the Schedule of Incentives for Weighted Deduction of Research and Development Expenses (A 107012)
- the Schedule of Tax Credit Incentives (A 107050)
- the Schedule of Annual Apportionment of Corporate Income Tax Among Trans-region Operating Enterprises Paying Tax on a Consolidated Basis (A 109000)
- the Schedule of the Apportionment of the Corporate Income Tax Among Branch Offices of Enterprises Paying Tax on a Consolidated Tax (A 109010).
Specifically, the Annual Corporate Income Tax Return of the People's Republic of China (Category A) (A 100000) shall be adjusted to the Main Annual Corporate Income Tax Return (A 100000).
2. Revise the instructions for completing the following schedules:
- Schedule of Revenues of General Enterprises (A 101010)
- Schedule of Revenues of Financial Enterprises (A 101020)
- Schedule of Costs and Expenditures of General Enterprises (A 102010)
- Schedule of Expenses of Financial Enterprises (A 102020)
- Schedule of Revenues and Expenditures of Public Institutions and Private Non-profit Organizations (A 103000)
- Schedule of Period Expenses (A 104000)
- Schedule of Tax Adjustment Items (A 105000)
- Schedule of Deficit Covered with Corporate Income Tax (A 106000)
- Schedule of Incentives for Equity Investment Income Including Dividends and Bonuses among Qualified Resident Enterprises (A 107011)
- Schedule of Incentives for Income Tax Reductions and Exemptions (A 107020)
- Schedule of Taxable Income Offset (A 107030)
- Schedule of Incentives for High-Tech Enterprises (A 107041)
- Schedule of Incentives for Software and Integrated Circuit Enterprises (A 107042)
- Schedule of Tax Credit on Overseas Income (A 108000)
- Schedule of Income after Overseas Income Tax Adjustment (A 108010)
3. For the declaration of tax-free income and other incentives, enterprises shall enter the name of the relevant matter as specified in the Catalog of Matters for Corporate Income Tax Return, which is released separately under the column of "Tax Services" section on the STA website and updated where appropriate in accordance with policy adjustments.
4. Where an enterprise’s disposal of equity (shares) is recognised as enterprise restructuring under tax collection provisions, it shall complete the restructuring information in the Schedule of Tax Adjustments for Enterprise Restructuring and Deferred Tax Matters (A 105100).
If the disposal of equity (shares) by an enterprise is recognised as a loss pursuant to the provisions of tax collection, the enterprise shall complete the loss information in the Schedule of Pre-tax Deduction of Asset Losses and Tax Adjustments (A 105090).
Additionally, the enterprise shall complete the relevant information on disposal gains in the Schedule of Tax Adjustments for Investment Income (A 105030).
5. This Announcement applies to the final settlement and payment of corporate income tax for year 2024 and beyond, thereby repealing the corresponding schedules and completion instructions outlined in the following:
- STA Announcement on Promulgation of the Annual Corporate Income Tax Return of the People's Republic of China (Category A, 2017 Edition), (Announcement No.54 [2017])
- STA Announcement on Issues concerning Revising the Annual Corporate Income Tax Return (2019 Edition) (Announcement No.41 [2019])
- STA Announcement on Revising the Annual Corporate Income Tax Return (Announcement No.24 [2020])
- STA Announcement on Matters relating to Annual Final Settlement and Payment of Corporate Income Tax (Announcement No.34 [2021])
- STA Announcement on Matters relating to Annual Corporate Income Tax Return (Announcement No.27 [2022])
Announcement by the Ministry of Finance, the General Administration of Customs and the State Taxation Administration on Adjustments to the "Zero Tariff" Policies for Raw Materials and Auxiliary Materials in Hainan Free Trade Port
To further support the development of the Hainan Free Trade Port, the Notice on Adjusting the "Zero Tariff" Policy for Raw and Auxiliary Materials in the Hainan Free Trade Port was issued on 24 January 2025.
Key points of the notice:
- A total of 297 new commodities, including unroasted coffee, ethylene and machine partshave been added to the "zero tariff" list for raw and auxiliary materials in the Hainan Free Trade Port.
- Expansion of scope for maintenance-related exemptions listed in Article 3 in the Notice of "Zero Tariff" Policies for Raw Materials and Auxiliary Materials at the Hainan Free Trade Port (Cai Guan Shui [2020] No. 42):
- Import duties, import value-added tax (VAT) and consumption tax will be exempted for spare parts used in repairing yachts and self-use production equipment (including relevant spare parts), provided they comply with relevant policies.
- Spare parts imported under the "zero tariff" policy shall not be used for other purposes without the approval of the Customs or the completion of retrospective payments for import tariffs, VAT and consumption tax.
- Amend to Article 4 of Cai Guan Shui [2020] No. 42 as below:
- "Zero tariff" raw and auxiliary materials are strictly for self-use by enterprises within the Hainan Free Trade Port and shall not be transferred.
- If a transfer is necessary (e.g. due to bankruptcy), Customs approval shall be obtained before the transfer and the relevant taxes must be paid. If the "zero tariff" raw and auxiliary materials are transferred to a qualified entity, import duties, import VAT and consumption tax shall be exempted.
- In the transfer of goods processed/manufactured with "zero tariff" raw materials and auxiliary materials, import duties, import VAT and consumption tax on such raw materials and auxiliary materials shall be paid retrospectively.
- The announcement takes effect on 1 February 2025.
Human Resources
Notice on Strengthening Entrepreneurship and Innovation to Promote High-quality Industrial Development in Chongming District (Trial)
On 8 Feb 2025, the Shanghai Municipal Government published the "Notice on Issuing Several Policy Measures of Chongming District on Strengthening Entrepreneurship and Innovation to Promote High-quality Industrial Development in the New Era (Trial)".
The notices covers 5 aspects and 13 key points, with the district human resources and social security department taking the lead in coordinating relevant departments to identify district-level entrepreneurship incubation base (parks) and provide a one-time construction subsidy of CNY 400,000.
Municipal and above business incubation bases (parks) shall receive 1:1 district-level operational subsidies based on municipal standards after an annual evaluation.
Entrepreneurial organisations incubated in district-level business incubation bases (parks) shall implement entrepreneurial innovation projects in emerging industries or subdivisions with new technologies and new business models as their core competitiveness. These projects should have the potential to become industry-leading enterprises and attract upstream and downstream enterprises to enter the business incubation base (park) to incubate and jointly build innovation industry chain projects.
During the start-up period, projects evaluated by the district level authorities as excellent shall receive a CNY 100,000 start-up development subsidy per entity.
Corporate Governance
The State Council Issues Reply on Temporarily Adjusting Administrative Regulations and Departmental Rules in Beijing
On 10 January 2025, the State Council issued a reply approving the temporary adjustment of certain administrative regulations and departmental rules in Beijing. The adjustments include modifications to provisions under the Regulations of the People's Republic of China on Chinese-Foreign Cooperation in Running Schools, the Regulations on the Administration of Entertainment Venues, the Regulations on the Administration of Commercial Performances, and the Special Administrative Measures for the Access of Foreign Investment (Negative List) (2024 Edition).
Key changes include:
- Allowing foreign investors to establish wholly foreign-owned vocational skills training institutions.
- Removing foreign equity ratio restrictions on value-added telecommunication services, such as information service businesses (limited to app stores, excluding areas prohibited for foreign investment) and internet access services (limited to providing internet access services to users).
- Exploring equity incentive mechanisms for foreign employees, including those from Hong Kong, Macao and Taiwan, in pharmaceutical R&D enterprises specialising in cell and gene research.