Category News of China

China’s high employment levels: adapting their workforce to a fast-changing market

China’s quickly evolving job market is booming and the results of Antal’s 2013 Q2 employment survey on various companies reflect an intent on increasing work efficiency and discovering fresh talent.

In the latest ‘Global Snapshot’ survey, 10,000 organisations in Europe, Africa, India, China and the USA were asked whether they were currently hiring or firing at professional and managerial level.

The survey then went on to identify if businesses planned to do so in the coming quarter.

The results for China were very positive, with a massive 75 per cent of Chinese employers recruiting or replacing staff at senior levels this quarter and 74 per cent planning to hire next quarter, in stark contrast to only 54 per cent expecting to hire in the Q1 edition of the survey.

This demonstrates a significant increase in hiring confidence for replacement and growth positions, as employers clearly defined their intentions and goals for the year.

However, with such an active recruitment market, there was also an increase in the number of companies firing employees.

Consistently high recruitment growth combined with increased labour costs has made employee performance as important as ever, and subsequently replacement recruitment is increasing.

During this quarter, the number of businesses firing staff rose from 14 per cent to 26 per cent, and the numbers are expected to continue increasing over the next three months.

On average, they remain 5 per cent higher than that of APAC. However, this should only be considered in tandem with similarly high hiring levels.

According to James Darlington, head of Asia at Antal International, “there is an increase in cautiousness among job seekers and employers which, together with a changing economy and the necessity for more adapted profiles, explains high recruitment and lay-off rates.”

In a globally stabilised job market, employers prefer higher quality talent, rather than higher quantities.

Furthermore, in many multinational corporations (MNCs), the repatriation of foreigners holding management positions is a significant phenomenon, and many businesses have not found local replacements yet, meaning employee quality is of the utmost importance.

Notably, some industries are booming, while others are lagging behind. The nationwide salary increase over the last two years has led to higher disposable incomes, with the performance of consumer-led sectors having benefited the most.

According to the survey, this quarter’s hiring champions were as follows: the automotive industry (92 per cent), retail & luxury goods (91 per cent), and health care (88 per cent).

Interestingly, the health care industry plans to fire 27 per cent of its employees this quarter, followed by the automotive industry (20 per cent) and luxury goods (8 per cent).

Clearly, specialists in these fields are highly sought after in the country. Demand in these areas is expected to remain high, with sales and marketing, IT and accounting, and R&D being the most demanded positions.

The automotive and aerospace industry “needs specific technical profiles who are bilingual in English” as well as “[a] high level [of] experienced sales talent, professionals with innovative views of the market and marketing experts with challenging and international vision”.

In the luxury good industry, “employers attach great importance to English skills compared to other professional skills” as many youth brands are booming in Beijing and Shanghai.

Due to a growing economy and “more products [are] produced to satisfy people’s daily lives”, the health care industry is “hiring more staff to support business expansion and the influx of foreign companies [into] China.”

As disposable income continues to rise, it is natural for auto and retail industries to continue performing strongly.

This, combined with persistent stagnancy in European markets, means that the major players in these industries will continue focusing their attention on China, thus leading to potentially increased hiring.

The survey reflects accurately what we see and hear from our clients on a daily basis. The talent war in China is continuing to heat up, with many companies prepared to break budgets or head count freezes to hire top level talent.

However, as the market gains in maturity, both employers and candidates are expected to put more emphasis on training and development rather than salary when negotiating a package.

As the world’s second largest economy and a quickly developing labour market, China is now hiring fewer, but “better” people, with HR managers having a clearer vision of their demands for this year and higher expectations on the talents that will drive their business into this challenging but formidable market.

HR company highlights top employers

More than 150 government officials and representatives of the business community gathered in Beijing on Friday for the 11th ChinaHR Best Employers Award Ceremony.

The event was organized by ChinaHR.com, a leading Chinese recruitment website, with the aim of highlighting the 50 most popular employers in China, based on a recent survey conducted by the company.

According to the survey results, the five most popular employers are China Mobile Communication Company Ltd, Bank of China Ltd, Baidu Inc, Lenovo Group Ltd and Microsoft China Co Ltd.

The survey polled more than 100,000 employees and university students looking for work, and asked people to identify their preferred employer, industry and location, and whether they preferred private or public sector employers. Specific rankings in 16 industries, including hotels and restaurants, construction, education and culture, were also given.

The list of 50 most popular companies reflected preferences for jobs in finance, the Internet, real estate, communications, and energy and chemical resources.

About 30 percent of the companies on the list are in finance and the Internet. The financial sector is seen as being well paid, while Web-based companies are seen as developing steadily and providing a good service to customers.

In a break with previous years, 30 percent of the top 50 employers are State-owned enterprises. More than half of the surveyed university students would prefer to work in government departments, institutions and State-owned enterprises because these jobs are considered more stable.

Among university students hunting for a job, 15 percent are aiming to work in Beijing, with 5.1 percent preferring Shanghai and 1.7 percent targeting Guangzhou. The percentage of university students willing to work in the three cities is less than in 2012, but Beijing is still the most appealing of all locations.

“The survey is a perfect platform for job-seekers and employers to find excellent employers and to present the strength and culture of the enterprises. Therefore, there will be perfect matches between the two parties,” says Ciaran Lally, CEO of ChinaHR.com.

“It’s incredible how China’s economy had continued to grow in the past few years. Online recruitment in China is promising, so we see huge opportunities in China,” says Leslie Buckley, chairman of Dublin-based Saongroup, which acquired ChinaHR.com in February.

Lally points out that micro blogs are a very useful tool in recruitment because job seekers and employers can exchange information in a meaningful way.

“Online is becoming more and more dominant as a way to search for and find a job in the world. In recent years, as there are so many jobs online, we moved from the phase of searching for a job to trying to find the right job. ChinaHR allows the companies to use our technology to make the right decision,” Lally says.

Employment outlook weak

Job supply falls as gdp growth slows, say experts

Chinese employers’ hiring intentions will weaken in the second half of 2013 but the employment rate is not a problem yet in China, human resources agencies say.

“China’s net employment outlook slipped to its weakest level since the first quarter of 2010 after employer hiring plans fell in all industry sectors and all regions,” Manpower Group, a global workforce provider, says in its employment outlook survey for the third quarter of 2013.

The firm uses its net employment outlook to describe employers’ hiring intentions.

The Chinese mainland’s net employment outlook is 12 percent in the third quarter of 2013, declining by 5 percentage points compared with the same period of 2012, Manpower says in its report.

Statistics from the survey show that 14 percent of the employers expect to increase payrolls in the third quarter, 2 percent anticipate a decrease and 45 percent forecast no change.

Zhaopin.com, one of China’s largest providers of human resource services, says recruitment growth in the first half of 2013 was 20 percent, falling by 6 percentage points compared with 2012.

The job supply is related to the country’s gross domestic product growth, so as China’s GDP growth slows down, so does employment, experts says.

Some institutions have different opinions on China’s GDP growth in the second half of the year. Nomura Securities, the most pessimistic, forecast a 30 percent possibility that China’s GDP growth will fall below 7 percent in the second half of the year.

However, China’s employment market is still steady because the workforce supply is declining alongside falling demand.

“China’s employment market will be steady in the short term because China’s working-age population is also reducing,” says Du Yang, a professor with the institute of population and labor economics at China Academy of Social Sciences.

Statistics from the National Bureau of Statistics show the working-age population in the mainland fell by 3.45 million in 2012 compared with the end of 2011.

There is a risk that if economic growth keeps slowing down, the human resource costs will rise and then the labor-intensive enterprises will be under heavy pressure running their businesses, Du says, adding it will lead to job cuts.

Economic transition is a fundamental solution to making sure new technology-intensive and capital-intensive enterprises will offer job opportunities after labor-intensive businesses are eliminated.

This year’s graduate employment is a result of unrealized economic transition, Du says.

College graduates with higher technology skills can meet the demand to improve productivity but there are not enough jobs for them because labor-intensive enterprises still account for the main part of the economy, he says.

On the other hand, the employment in different industries reveals contrasting situations.

“The real economy reflects obviously whether the economic development is healthy, which means secondary industry is affected most by macroeconomic growth,” says Hao Jian, chief consultant at Zhaopin.com.

Manpower’s report also shows that hiring intentions will weaken in the finance, insurance and real estate sectors with a 20 percentage point decline year-on-year in the third quarter of 2013. Mining and construction sectors will suffer an 11 percentage point year-on-year fall.

“Much of the (employment) weakness stems from considerable declines in China’s finance and construction sectors,” Manpower says in its report.

Recruitment in the telecommunication, consulting and information technology sectors will increase slowly this year compared with 2012, Hao says.

Tertiary industry will contribute more to the employment market. Urbanization is good news for job opportunities in tertiary industries.

Job growth in healthcare, retailing and luxury goods sectors will keep going up, Hao says, although these are not main sectors in the employment market traditionally.

Some human resources management companies have moved their businesses to the rising industries.

“Antal has conducted business in the consumer goods and service-related sector since two years ago,” says James Darlington, head of Asia at Antal International, a United Kingdom recruitment and training consultancy.

He says it is easier for the consumer-related industries to cover the rising cost of human resources in China.

Employment in the third quarter will remain very strong in the sectors, Darlington says. July could be the firm’s best month this year in terms of recruitment numbers.

The fourth quarter may have some seasonal slowdown but the majority of its clients in consumer-related industries are still very optimistic about the job market, he adds.

Top foreign brands in China revealed

BEIJING: Major global companies are increasingly heading to China in a bid to boost sales among the nation’s burgeoning middle class, with growth remaining sluggish in Europe and North America.

Market research company Millward Brown identified the top 20 foreign brands in China for a BBC report, and the UK broadcaster has analysed why they have been success stories.

Millward Brown found that 13 of the top 20 brands are from the US, two each from Germany and France, one from Italy, one was the Anglo-Dutch consumer giant Unilever, while the South Korean electronics firm Samsung was the only Asian brand to make the list.

KFC, the US food group, topped the list, followed by Procter & Gamble’s Pampers babywear brand and Colgate Palmolive’s Colgate toothpaste, while Apple was the leading technology brand at No6.

Unilever’s Omo laundry product and French retailer Carrefour were the only non-US entrants in the top ten, at eight and 10 respectively.

Millward Brown’s study found that opportunities for foreign companies are rising rapidly in China, as consumers move away from purchasing by price and trust in Chinese brands rapidly falls away.

For McDonalds, the US drinks giant, the key to Chinese success is to “work with changing social attitudes and continuous aspirational trade-ups,” while Unilever carried out extensive consumer research before entering the market with Omo.

The opportunities for successful companies are immense, with KFC planning to add another 700 outlets to its estate of 4,400 restaurants in 850 cities this year, while McDonald’s is opening 10 new restaurants a week and Coca-Cola is to invest $4bn to expand, the BBC reported.

Outside the food and drink market Apple is to double its outlets in China, while Volkswagen, the German carmaker has seven new production plants in preparation to cater for its biggest market, with China representing a third of all its sales.

Understanding micro-markets is also important, and L’Oreal and Samsung told the BBC that they tailor their approach to different regions of China.

All the companies said that the key to their success is to recruit local talent and engage in joint ventures with local parties to better understand the consumer.

Chinese Game Developer Quits Job, Sells Street Food, Doubles His Salary

With the potential to make a lot of money as a developer, especially since it is pretty easy these days to create your own app for mobile devices, we’re sure that there are many kids out there whose dream is to one day become a developer of software and games. However in China it is a different story as developers are typically referred to as “Ma Nong”, or number crunchers if you’d rather, since their job involves very long hours and apparently very little pay. Interestingly it seems that over in China, one developer has had enough of the long hours and bad pay, and when he quit his job, he decided at the urging of his girlfriend to start selling street food known as “shaobing”, a type of flatbread.

While it was a means to an end, it turned out that his endeavor proved to be more profitable than he had imagined and according to a report on Tencent, the developer (or ex-developer) now pulls in about $3,259 a month, which is reportedly double that of what he used to make as a developer! Of course $3,259 might not seem like a lot of money stateside, but over in China it is a pretty big deal. This by no means reflects the type of pay that all developers receive, since some employers can be fair while others can be quite stingy, it is an interesting twist on things.

Chinese airline targets ‘Flight Aunties’ in recruitment drive

It seems that not only young and beautiful girls can make it into the competitive world of flight attending in China after all.

A recent move by Shanghai-based Spring Air, China’s biggest budget carrier, will give preference to hiring married women with kids, according to a Wall Street Journal report.

I think it’s good that the airline is doing this. It helps the dynamics of the crew because the older ones have more life experience, making them more mature and reliable, whereas the younger ones are more enthusiastic
These unusual conditions to hire what the airline terms ‘flight aunties’ points towards an attempt to diversify the profile of its 600-strong flight attendant workforce.

The public relations value of ‘flight aunties’ is significant, considering its departure from the airline’s controversial move earlier this year, when it dressed its flight attendants in coquettish maid uniforms.

It also goes against the greater trend amongst big Chinese state-owned carriers, which have hosted pageant-style competitions to choose new flight attendants.

Spring Air said that it is seeking college-educated females aged between 25 and 45, adding that those married with children are given top consideration. The previous age cap for new hires was 35.

Its decision follows the results of a recent survey on Weibo indicating that “72 per cent of internet users polled prefer to be served by experienced flight attendants.”

Wang Yan, a 36-year-old air hostess at Spring Air, is amongst the first batch of ‘flight aunties’ hired by Spring Air.

“I think it’s good that the airline is doing this,” she said. “It helps the dynamics of the crew because the older ones have more life experience, making them more mature and reliable, whereas the younger ones are more enthusiastic.”

The flight attending profession is considered prestigious, with thousands competing for coveted spots despite poor treatment, low pay, and gruelling conditions.

China Rongsheng shares suspended after job loss reports

Trading in shares of China Rongsheng Heavy Industries Group Holdings Ltd (1101.HK), China’s largest private shipbuilder, was suspended on Thursday in the wake of media reports that said it had laid off 8,000 workers in recent months.

The company, suffering from a downturn in the global shipping industry as well as China’s own economic slowdown, said it had sought the suspension pending clarification of the news articles, according to a filing to the Hong Kong stock exchange.

No further details were available and China Rongsheng declined to comment, but analysts said the company’s balance sheet was under pressure. On Wednesday, its shares closed down 10 percent at HK$1.06.

China’s shipbuilding sector has struggled and consolidated since a major shipping market slump in 2008 that saw shipping orders shrivel.

Local media reports said a large number of small to mid-sized shipping firms went bankrupt during the past year due to major overcapacity in Chinese shipyards and the economic slump.

The holding orders of Chinese shipyards dropped 23 percent in the first five months of this year compared with a year earlier, according to the China Association of the National Shipbuilding Industry. New orders meanwhile dropped to a seven-year low in 2012.

“The problem is that their order-books are now running down, creating massive over-capacity,” said Singapore-based Vincent Fernando, an analyst with Religare Capital.

“Moreover, Rongsheng has been suffering due to a major receivables past due problem, thus liquidity is a major concern. I think they are being forced to slash their workforce due to the extreme circumstances the company finds itself in.”

The Wall Street Journal said the job cuts at China Rongsheng represented some 40 percent of the firm’s workforce. The cuts sparked protests by workers earlier this week, according to media reports.

A company executive told The Wall Street Journal the layoffs were not a sign of financial distress but the result of a restructuring aimed at making more specialized vessels used in the offshore oil-and-gas industry.

China Rongsheng is a major supplier of bulk carriers that ship iron ore from producer nations such as Brazil to China. Brazil’s Vale (VALE5.SA) is one of its customers.

“We expect a continuing deterioration in the balance sheet given weak overall demand growth for bulk vessels, Rongsheng’s core product,” Barclays analyst Jon Windham said in a report.

ECONOMIC DOWNTURN

China’s economic downturn is shaping up to be the worst in at least 14 years, with growth possibly missing Beijing’s 7.5 percent target this year.

And an unprecedented cash crunch in China’s financial markets last month, which saw interest rates briefly spike to record highs, may further drag on the economy.

According to its December 2012 annual report, issued on March 26, China Rongsheng’s cash and cash equivalents fell to 2.1 billion yuan ($342.53 million) from 6.3 billion yuan a year ago. It had borrowings of 16.26 billion yuan that were due in less than a year, said the report, the latest financial statistics available on the company’s website.

In the annual report, the company said it had “significant” cash outflows since some customers had sought to delay the delivery of new vessels.

Indeed, receivables pending for more than six months rose to 83 percent from 21 percent a year ago, the annual report said.

The industry slowdown was also taking its toll on sales, with inventory turnover up to 136 days from 73 days.

“Short term debt is seven times cash resources. That to me is a liquidity red flag. Industry conditions are terrible, freight rates have been low for the past 2-3 years and ship owners are behind on payments,” said a Hong Kong based analyst who declined to be identified as he is not authorized to speak to media.

China Rongsheng is the country’s largest private shipbuilder by accumulated order books. It is based in eastern Jiangsu province, near Shanghai, and went public in Hong Kong in 2010.

It posted a net loss of 572.6 million yuan ($92 million) in 2012, its worst-ever, despite receiving government subsidies of 1.27 billion yuan.

WILL GOVERNMENT HELP?

The Chinese government has been trying to support the domestic shipping industry since the 2008 financial crisis, and local media reports said this week Beijing was considering policies to revive the shipbuilding business.

The shipping industry downturn cut new ship orders for Chinese builders by about half last year.

Underscoring China’s employment challenge, growth in the country’s vast factory sector slowed to multi-month lows in June on faltering new orders.

The official purchasing managers’ index (PMI) showed a sub-index measuring employment dropped slightly to 48.7 in June from 48.8 in May. A HSBC survey showed factories shed jobs last month at the quickest pace since August.

China’s Sany Heavy Industry (600031.SS) laid off more than 10,000 people in the first half of 2012, although China’s overall job market has been fairly robust so far, explaining in part Beijing’s ease with the country’s slowing economic growth.

($1 = 6.1308 Chinese yuan)

Hong Kong restaurateurs at breaking point amid labour ‘intervention’

Government intervention in the labour market is making it hard to run a restaurant business and more regulations will only make it tougher, says one of the city’s leading restaurateurs.

Simon Wong Kit-lung, executive director of the LHGroup his father founded about 40 years ago, said he supported the statutory minimum wage as it protected workers. He said some cleaners, for example, got as little as HK$5 an hour beforehand.

But further measures would not be good for business, he said.

“In the past few decades, because of the so-called ‘small government, big market’ vision, the government did little to influence the business environment,” Wong said. “But in the last few years, I feel that this is changing.

“The government is obviously rendering changes in the business environment with its policies, such as the statutory minimum wage.”

Wong’s group has 10 restaurants, including The Banqueting House in Kowloon Bay’s MegaBox mall, and he is managing director of the Kabushikigaisha chain of 16 Japanese restaurants.

The 39-year-old businessman is also one of the 12 members of the Minimum Wage Commission, which reviews the lowest statutory pay rate – set at HK$28 an hour in May 2011 and raised to HK$30 in May this year.

While some intervention was needed to prevent injustice in the workplace, he said, too much intervention, such as a standard working hours law and statutory paternity leave, would not be “ideal” for the city’s business environment.

“In some third-world countries, some people, including young people, are forced to work 18 hours a day. A standard working hours law is needed in those cases, but not in Hong Kong,” Wong said.

“And when France legislated standard working hours, it was because the unemployment rate was so high that the government wanted to split one job for two people,” he added.

In the 1980s and 1990s, Wong said, new restaurants could break even in their first half-year. But now it took about three years, if it happened at all.

He quoted government figures as saying that 30 per cent of investments in Chinese restaurants barely break even, while 40 per cent have never broken even by the time the restaurants close down. That meant that only 30 per cent of people investing in Chinese restaurants could make a profit.

Making it even harder, he said, restaurant rents had doubled in the past five years while the price of ingredients had risen 50 per cent in three years.

Since the minimum wage law became effective in 2011, monthly pay for the job of pushing a dim sum trolley had risen from HK$4,000 to HK$7,000, he said.

This had caused a ripple effect, with staff who had been making well over the minimum wage also demanding a raise. Salaries for waiting staff and managers had risen 15 per cent and 10 per cent, respectively.

“And it is now very hard to hire restaurant staff,” Wong added. “Some of us in the restaurant business have a WhatsApp group where we ask for help in recruitment if it is urgent. But everyone is saying they need help, too.”

China begins oceanauts recruitment process

China on Tuesday kicked off a five-month recruitment process for oceanauts to serve in its deep-diving submersible Jiaolong.

Six individuals, including two women, will be selected to train as oceanauts for Jiaolong’s future missions, said a National Deep Sea Center statement.

“We have very strict physical, psychological and professional requirements for selecting oceanauts,” said Liu Baohua, the center’s Party chief. “The strict requirements can compare to those for astronauts.”

The center is looking for male candidates aged between 22 and 35 and female candidates between 22 and 30, who should be college graduates or postgraduates having majored in engineering, electrical science and technology, or naval architecture and ocean engineering, the statement said.

There is not much room inside the submersible, which means candidates have to be of moderate height and weight, Liu explained.

Male oceanauts should be between 1.65 and 1.76 meters high while females have to be between 1.6 and 1.7 meters, according to Liu.

Candidates have to be mentally and physically stable as they will be spending several hours in darkness inside the submersible.

“People who suffer claustrophobia and seasickness are definitely not suitable,” Liu said.

Besides physical requirements, oceanauts should be skilled in engineering and have an academic background of ocean sciences.

Chinese citizens can sign up for selection through the center’s website, www.ndsc.org.cn.

The selection will last for five months and applicants will go through a number of tests, interviews and medical examinations in order to make the final list.

However, to be a qualified oceanaut, they will have to receive training for at least two years, Liu said.

“It will take time and hard work from being a trainee to becoming an oceanaut,” he said.

So far China has only two oceanauts, both male. They took the Jiaolong to a record depth of 7,062 meters in the Pacific Ocean’s Mariana Trench in June 2012.

This year, the Jiaolong completed four deep-sea dives from June 17 to 20, collecting rare creatures and mineral samples, and has entered a five-year trial operation before it goes into regular service.

Ease Employment Discrimination on College Graduates

About 7 million students are graduating from China’s colleges this year, marking the hardest job-hunting season in the country’s history. However, widespread employment discrimination in the job market has made the situation even tougher for China’s youth.

CRI’s Zhou Jingnan finds out more.

A fresh graduate of Guangdong University of Finance surnamed Ge, complains about discrimination as employers raise their requirements based on academic background of applicants, such as their degree and alma mater.

“I attended a job fair recently. Most of the employers there told me they only recruit students graduating from about 110 top-notch universities from the country’s Project 985 and 211. I was so depressed because I believe I am just as able.”

Project 985 and Project 211, similar to Ivy League universities in the US, was launched by the Chinese government to promote the country’s higher education. However, it has been often used by those companies hiring as a reference when it comes to recruiting.

Macroeconomic researcher Liu Xiao, from the consultancy firm Anbound analyzes the phenomena.

“The supply of job-hunters has exceeded the demand of the job market among university students in recent years. Thus, whether a graduate comes from an elite university or not, it is natural for enterprises to select potential employees from a large number of applicants.”

Some experts think that the discriminatory recruitment practices infringe upon the rights and interests of ordinary college graduates. It is also believed that such discrimination might cause students to shy away from the job market and instead pursue higher education rather than attempt to promote their ability and efficiency through employment.

Liang Chen, a junior college graduate, talks about why he chose to pursue a higher degree from China University of Petroleum.

“Nowadays, it is impossible for me to find a job with a junior degree. I believe there’s a larger chance of success to land a decent job with an undergraduate degree.”

In order to make the job market fairer, the Ministry of Education recently issued directives banning recruitment advertisements with discriminatory requirements.

Researcher Liu Xiao suggests ways to eliminate discriminatory employment practices in the long run.

“The spontaneous regulation of the job market is the most effective way. Employers will change their prejudices against lower-educated students when they realize that degrees and gender have nothing to do with a graduate’s capability and efficiency.”

Liu suggests that graduates lower their expectations for the first job. Individuals are more likely to land a decent job after gaining rich work experience and becoming an expert within a certain industry.

For CRI, this is Zhou Jingnan.