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Taking stock of China’s logistical shortfall

Employers in China face such a severe shortage of logistics staff that one British company is offering work to 20% more candidates than it has jobs.

Paul Brooks, sales director of Unipart Logistics, said that the company regularly offered employment to between 10% and 20% more candidates than it had jobs because they knew that within a week this number of candidates would take up job offers from other employers. The firm employs 250 staff in China.

At a press conference during a recent visit to Unipart in Oxford by a Chinese delegation of logistics and education officials to the UK, Brooks said that staff retention was also a major issue, with the industry experiencing an annual staff turnover of more than 50%. Even a small wage increase would entice employees to move to another employer. “They will leave for 30p more, they will just not turn up,” said Brooks.

Haoxiang Ren, vice-president of the China Federation of Logistics and Purchasing, told Recruiter that in China “the skills shortage is for every subject and every position in the sector.”

Ren explained there was a fundamental mismatch between the demands of employers and what the Chinese education system is turning out. “Demand is like a pyramid,” he said, with many more lower level operative-type jobs at the bottom, and relatively few jobs for managers at the top.

Despite this, he explained that around 400 universities in China provided 100,000 graduates a year studying logistics as a major part of their degree, leading to a glut of people looking to enter the sector at managerial level.

The problem is made worse, “because more and more parents are looking for their children to go to university and not college”, he added.

In contrast, Ren said that only 90,000 graduates with a relevant qualification left 800 secondary vocational colleges (for 15-18-year-olds) — an insufficient number to fill the far more numerous lower-level roles. “It [the education system] doesn’t fit the nature of the industry demand,” he said.

Tech and execs see least talent movement in China

China’s technical workers in IT and engineering roles saw the lowest rate of people changing jobs in 2012 of any business function, at 18% and 24% respectively, followed by board-level staff at 27%.

The highest degree of movement was seen in government affairs (55%), construction (50%) and production (42%), according to Chinese recruitment firm RMG Selection.

A survey from the company of 2,000 Chinese workers shows that for 2013, 61% of IT workers have a greater desire to change jobs. Engineers (52%) were also seeing renewed keenness to move, as were production workers (57%) and supply chain professionals (52%).

The full Talent Flow Survey 2012-2013 is available via the RMG website. “http://www.rmgselection.com/downloads/RMG-China-Talent-flow-Survey-Report-2012-2013.pdf”

New working visas for China lack clarity, says Baker McKenzie

New regulations for employing foreigners in China do not identify eligibility criteria for high-level and in-demand professional talent, says global law firm Baker McKenzie.

New proposals to China’s Entry and Exit Control Law, published last week, take effect on 1 July and come after February’s announcement of new laws that raise questions over the future of agency work in the country.

In draft form, the laws do not “identify the eligibility criteria” for a new ‘R’ visa, which will be introduced for high-level personnel and professionals in short supply in the country, Baker McKenzie says.

The current ‘F’ visa for business use will be moved to a new ‘M’ category.

The new laws will also reinforce the illegality of working without a valid employment and residence permit, and redefining the rules for students interning in the country.

Insight on China’s college graduates’ employment report

The Chinese education consulting firm MyCOS has published its 2013 Chinese College Graduates’ Employment Annual Report. The report looks at the job situation of graduates from this year and last, who are just starting off their careers. The report offers important insights for Chinese students choosing their majors.

Q1: What does the report tell us?

A: Mangmang, what we have seen from the report is very alarming. The employment rates for 2013 are far lower than last year. By early April, only one out of three graduates with bachelor degrees have landed jobs. Just last year the employment rate was almost 50 percent in April, and over 90 percent by the end of the year.

For master’s degree graduates, the prospects look even gloomier. Only one of out four were recruited by early April. People are beginning to ask how much is your diploma worth in the job market. And interestingly, in sharp contrast to university students, vocational school graduates are having much less trouble moving into the labor market. We visited one leading vocational school, and were amazed at how easy it was for students to find jobs.

Rural youth encouraged to become self-employed

Many young people in rural China hold the belief that earning money in a city is the only way to be able to afford a home and family. Not Li Shuhua.

The 30-year-old, who was born in Xishan Village of Lianhua County in east China’s Jiangxi Province, decided to run his own ecological farm in his hometown after four years of work experience at horticultural companies in Guangdong and Zhejiang provinces.

“I decided on the farm because of people’s growing awareness of food safety which has made green agricultural produce more competitive,” said Li, who was educated at Jiangxi University of Science and Technology.

Li’s farm covers an area of 1.3 hectares, primarily growing ecological grapes and breeding pigs with an annual income of about 200,000 yuan (32,660 U.S. dollars).

More than half of the 1,000 villagers in Xishan have swarmed to southeastern coastal cities to seek better-paid jobs in the past year.

This is typical of villages in China.

However, with the current record-high 6.99 million graduates struggling to secure decent jobs in cities, Li’s self-employment experience is an inspiration for many.

As the pressure of finding a job grows, more graduates are choosing to go back home to realize their dreams.

The Chinese government has promised to recruit more university graduates who have taken on leadership roles in the countryside in a bid to encourage more college students to work in rural communities after graduating.

About 10 to 12 percent of newly recruited public servants in the country this year will be college graduates who will have had experience of working as “village officials,” according to the State Administration of Civil Service.

The number of university students with official positions in rural communities is expected to increase to 600,000 by 2020 from the current 200,000, according to the administration.

Wu Yongming, vice chairman of the Jiangxi Provincial Academy of Social Sciences, said that more talent is needed in rural areas, especially those specializing in agricultural, medical and educational fields.

“In order to gather grassroots experience, it is also necessary for the Chinese youth to find employment or start a business in rural areas,” Wu said.

During talks with young representatives on Chinese Youth Day on May 4, Chinese President Xi Jinping said he pinned his hope on the Chinese youth for innovation and national advancement.

The president expects the young generation to make great accomplishments, and encouraged them to work at the grassroots and the front line in order to hone their skills and enhance abilities required for furthering their career.

“Young people should emancipate the mind, advance with the times, forge ahead and innovate so as to gather experience and make achievements,” he said.

Just like Li Shuhua.

The end of the expat dream? Foreigners facing increasingly competitive Chinese job market

As the school year concludes in China, many students are ecstatic for the summer break and excited for the bigger and better things they will see in September when they enter the next grade. Their foreign teachers from the West however, will most likely not enjoy the same sense of achievement felt from moving into a higher position. Lately, expatriates holding entry-level positions in China, such as English teachers and interns as well as recent graduates, are finding it increasingly difficult to find fulfilling work.

Amid massive youth unemployment in the West, China once seemed like a land of opportunity for young Westerners to succeed and achieve their dreams faster than they would have back home.

The startling success of the Chinese Chinese economy does not translate however to immediate opportunities for every foreigner considering a move to China. At least, not any more. Increasingly, simply being from a rich, English speaking country is not viewed as a qualification in and of itself.

Even those with engineering degrees, which are known to grab high paying positions in the West, are still facing difficulties securing similar work in China. Take these two examples, who spoke of their difficulties finding work to the New York Times:

Brett Edman, who moved to Beijing in February after studying Chinese and engineering in Australia, said he approached Himin and had no luck. “I can understand if they are looking for specific things, but they didn’t seem interested in talking to me anyway,” Mr. Edman, 25, said. “Even my major is directly related to their business, so that was a bit surprising.”

Max Scholl, 23, who studied environmental engineering at the University of Vermont, has been in China for 10 months teaching English at a kindergarten. His salary is 10,000 renminbi, or $1,600, a month. Most of that is sent home to pay off student loans, and he is concerned that he cannot find employment in his chosen field. “It is a little frightening, the situation I am in,” he said.

The competitiveness of the Chinese job market is governed not by amount of education but rather something else. The reason for the woes of foreigners is simple: their foreignness. They must not only compete with the other 600,000 expatriates in China, but of course also with the young and educated Chinese population. Obviously locals hold a significant advantage, in terms of language, familiarity and experience in China. According to the New York Times Chinese students who have gone abroad to study are the greatest competition for foreigners in China, they are the “more qualified applicants on the market” in part due to their “overseas university degrees, multiple languages and an international outlook.”

This return of students who studied abroad to China is an exponentially growing trend that will continue to exacerbate competition for expatriates. According to The Guardian:

(Foreginers) now have to contend with around 285,000 Chinese students who have been sent overseas to study, up from 24,000 in 1995, according to EIC Group China, an educational services provider. Locals have high expectations when returning to their home country after a stint abroad – and debts to pay off. Most come back with English which is far better than any foreigner’s Mandarin.”

Exacerbating this trend, how Chinese society views foreigners is also experiencing great change. Their presence is no longer thought of as a new and exciting concept and the special status that foreigners once received simply by dint of being foreign is diminishing (as it should do). Tea Leaf Nation explains:

First off, they are less and less a novelty. Once upon a time, they were asked to pose for photos wherever they went. While this is still true in most areas, they are now hardly given a second glance in the trendier areas of big cities. With more of them around, expats have been demystified – and more opportunities for interaction have perhaps led local Chinese to a startling revelation: that many foreigners are poor students, or are struggling to make ends meet, while China’s middle class is only growing more and more wealthy.

With all of this, perhaps many young and educated expatriates will leave the country disillusioned with their personal “Chinese Dream”, disappointed that it wasn’t easy to jump right into a high paying job. This sort of entitlement and indignation is a trait pervasive among graduates in my home country of Canada, and it certainly isn’t doing anyone any favours in China. Being a successful expatriate in China has become more difficult, but it is by no means impossible. China and the West only become more interlinked every year, and qualified individuals will always be needed to help maintain and grow this bond. China has done its part by improving rapidly over the past 30 years, now it just wants its foreign guests to keep up the pace.

Alibaba Plans Worldwide Intern Indoctrination Program

China’s Alibaba Group announced the launch of an intern training plan, aiming to recruit 102 interns around the world and provide one-on-one training by business leaders and executives within the organization.

According to Alibaba, interns who participate in this program should have dreams and positive energy. Those dreams do not need to be related to e-commerce, said Alibaba.

The internship will last for one to two months. The first batch will include about 30 people, who can be students or those already having some working experience. Once admitted, they will gain meals, accommodation as well as a salary.

To ensure the efficiency of the internship, the classes of the interns will be led by Alibaba’s executives and business leaders. In addition, those executives and business leaders will provide one-on-one trainings to interns. The performance in training interns will reportedly influence the promotion of the executives.

Alibaba said they will not require those interns to stay in the company after the training. They hope the interns can gain something from the training and become outstanding rural teachers, cooks, lawyers, entrepreneurs, or participate in politics in the future. The leader of this internship program said that during the program, the interns can learn the unique culture of a Alibaba and the company hopes more young people can access the ongoing huge changes of Chinese economy.

Antal International reports strong performance among professionals.

The Chinese professional job market is still booming this quarter, with higher employer activity levels and more focus on employee’s work efficiency. The news comes from Antal International’s latest ‘Global Snapshot’ survey which asked 10,000 organisations in major markets all over the world whether they were currently hiring or firing at professional and managerial level. The survey also seeks to identify whether businesses planned to hire or fire in the coming quarter.

According to the survey a massive 75 per cent of Chinese employers are recruiting or replacing staff at senior levels, despite only 54 per cent saying they expected to do so in the previous Q1 edition of the Snapshot. This shows a significant increase in hiring confidence for replacement and growth positions, as employers clarify their needs for the year.

However, the downside of the active recruitment market is that there is also a clear increase in the number of companies firing employees. The region has demonstrated high recruitment growth over the past years but this has occurred alongside increased labour costs so overall employee performance is becoming much more important which in turn is driving replacement recruitment. This quarter is seeing the number of businesses letting staff go rising from 14 per cent to 26 per cent, and firing levels are expected to further increase to 28 per cent in the next three months, five per cent higher than APAC’s average. According to Antal’s analysis however, this should only be considered together with similarly high hiring levels, and a stabilising job market, where employers now look for higher quality talents, rather than quantity.

“Jobs and opportunities are still available, but there is an increase in caution among job seekers and employers,” observes James Darlington, Antal’s Head of Asia. “The market is constantly evolving and companies are adapting to these changes and replacing people with the necessary new skill sets. Sales and Marketing remain strongly in demand within companies as they focus on acquiring market share with tier 2 / 3 / 4 cities in China. There remains to be strong hiring within the back office functions as companies improve their internal capabilities.”

Indeed, it appears growth is not consistent across the region. Some industries are booming, while some are being more conservative in their growth. The salary increase over the last two years brought more disposable income to the population and the consumer led sectors are performing very strongly. Among this quarter’s hiring champions, the survey revealed: Automotive industry (92 per cent), Retail and Luxury goods (91 per cent), and Healthcare specialists (88 per cent). Demand in these areas is expected to remain high, with Sales and Marketing, IT and Accounting, as well as R&D specialists highly sought after in the country.

Chinese fixed asset investment fall more-than-expected

China’s urban fixed-asset investment fell more-than-expected last month, official data showed on Thursday.

In a report, National Bureau of Statistics of China said that Chinese Fixed Asset Investment fell to a seasonally adjusted 20.4%, from 20.6% in the preceding month.

Analysts had expected Chinese Fixed Asset Investment to fall to 20.5% last month.

COUNT THEM IN OR OUT? CHINA’S NEXT GENERATION OF JOB HUNTERS

Ever since 2002, when the first batch of students graduated after national expansion of university enrollment, the difficulty for educated young people to find employment has become a hot topic each summer.

The total number of graduates has grown every year. With 6.99 million fresh graduates this year, the number is hitting another record high.

The market needs time to absorb this sudden growth of employment demand. Though it isn’t easy, the situation isn’t as serious as it is sometimes presented. Based on the experience of the past decade, the growing number of China’s college graduates has been largely absorbed into the workforce.

So why the annual alarm and panic about the job hunt for these young people?

A part of the explanation, I believe, is a faulty method for calculating the unemployment statistics. The alarm has always been sounded around March or April because the universities have started assessing their students’ employment rate. Nothing is more absurd than a student who is pressed to sign up for a job before he even walks out of college.

Choosing a career is a complex and lengthy process, and can never be as uniform as the orderly assignment of jobs in China’s era of a planned economy. It’s completely normal that graduates take up to six months or even a year to find a job after finishing their studies.

Moreover, false employment rate calculations by Chinese universities are highly prevalent. This not only greatly reduces the reliability of the data, but also prevents us from acknowledging the real job hunting situation for graduates. This also makes the senior year — and the second semester in particular — into little more than a job-hunting season.

Obviously, as time goes by, the graduate employment rate will increase. The statistic released by China’s Ministry of Education has basically always been above 70% in the past, with its time node set on September 1. The employment rate of graduates on December 31, 2005, published by China’s Ministry of Personnel, showed a figure of 87.7%. This was 15% higher than the data on September 1. If the calculation were pushed back to be one year after graduation, one could expect a further 10% increase. Since this means an employment rate of over 90% one year after graduation, where is the big problem?

The way foreign colleges assess their alumni employment situation is always based on one year after graduation. It is only in a planned economy where jobs are assigned that the rates are measured before the students leave school, on July 1.

It is thus imperative that China set its statistical clock in accordance with international practice, i.e., December 31 for the six-month mark, and July 1 for one year after graduation. Not only will this largely increase the usefulness of the employment rate data and avoid panic, the statistic will also be more credible.

In addition, the statistical methods must be reformed. Currently the data comes self-reported from colleges, which are lax in effective monitoring and regulation. The more pressure the colleges suffer, the worse the data is distorted.

Establishing a new statistical mechanism for the rate of graduate employment can be part of the government’s new attempt at raising the quality of its information dissemination, and communicating through social media.

As for the latest information, the most noteworthy is how certain fields of study can lead to vastly greater difficulty in finding a job after graduation.

What employers want

According to surveys by MyCOS, an education data consulting firm, the “Top 10” unemployment list features graduates who recently majored in English, computer science and technology, law, art and design, international economy and trade, business administration, accounting, electronic and information engineering, Chinese language and literature, information management and systems.

The major reason is that when China set in motion the “Great Leap Forward” in university enrollment, a large number of low-cost liberal arts majors were created. This has resulted in an imbalance between supply and demand. Meanwhile, the once popular disciplines such as international trade or computer science have changed from being in short supply to being in surplus.

The high draw for art courses, as well as audiovisual and animation professions, is obviously illogical. Yet, year after year, these disciplines produce an excessive number of graduates and continue to admit massive numbers of students. This is the clearest reflection that China’s higher education system is disconnected from the job market.

Businesses’ appraisal of graduates is worth paying attention to as well. The employers’ dissatisfaction with graduates isn’t just because they lack updated expertise or don’t have certain practical skills, but due to, first of all, their value system: questions such as integrity, professionalism and a good working attitude.

What depresses employers are the half-hearted, frequent job-hoppers — or worse, the dishonest ones who take them as a springboard and quit their jobs without even giving proper notice. Businesses tend to prefer to pay higher salaries for proficient workers rather than training them from scratch. This certainly makes matters worse for fresh graduates desperately looking for work.

Apart from all these longer term trends, there is also a brand new tendency. Because of China’s economic downturn, the recruitment needs of enterprises have significantly decreased over the past months. This is unprecedented in the past decade. Alas, the resolution of this issue is beyond the sphere of education and it seems that there is no instant answer.