COVID-19 has not only severely disrupted the Chinese economy but also brought profound changes to the labour market in China. SMEs and start-ups are experiencing a talent drain as job security becomes more important and the appetite for risk-taking has largely dropped. In the meantime, China’s fast digitalisation has revolutionised the way many industries operate during and after Covid-19, and the same is impacting the process of talent acquisition and other HR practices.
Impact of Covid19 to China’s Labour Market
The coronavirus pandemic has greatly affected the economies of many countries, so significant effects on the labour market are expected.
The majority (79.8%) of Chinese businesses were negatively impacted by the pandemic and the official unemployment rate was 1.1% year-over-year growth, according to a survey conducted by hiring tech firm MoSeeker in February. A detailed report released by Guanghua School of Management shows the most affected jobs are in procurement and sales, and low income groups have found it hardest to find work.
Businesses have taken measures to adapt to the changing circumstances. Almost half (48.7% ) decided not to recruit, which resulted in much higher competition for fewer jobs. There has also been a recruitment freeze among most, especially foreign businesses, although the stated-owned sectors have continued to recruit.
A survey conducted by online recruitment firm Zhaopin finds 66% of job seekers have adjusted their plans during the pandemic. Furthermore, graduates who have failed to find jobs say they are experiencing negative impacts on their mental health.
How has China adapted to the change?
China was the first country to experience the coronavirus pandemic. Now, luckily, many companies are already recovering, thanks to a series of measures and adaptations being put in place.
1. Government support
The Chinese government has taken several measures to create new jobs, including more intakes in public sectors and postgraduate programmes. A “100-day” campaign was launched to hire an extra 400,000 graduates as teachers, and to expand army enlistment. Regionally, Hainan province provided cash allowances for university degree holders.
2. Recruiting online
The use of recruitment websites and internal referrals as a channel to hire talent has increased since the outbreak. Conversely, the percentage of campus and offline recruitment has significantly dropped.
3. Online hiring tech
Mobile applicant tracking systems (ATS), AI chatbots and AI voice assistants are now being used to manage the recruitment process.
4. Innovative Employee Sharing
Alibaba’s supermarket “Hema” launched an “employee sharing” scheme to “borrow” employees from businesses hit hardest by Covid-19.
Talent market trends post Covid-19
Talent acquisition has always been a demanding discipline and hiring talent during coronavirus has become even more challenging. Forty-four per cent of graduates in 2019 chose to embark on further study and 32% chose to immediately start a job. However, 76.66% of graduates in 2020 are continuing to look for jobs and 49.67% of them are starting postgraduate studies, according to a graduate survey by Liepin.
More graduates have moved to state-owned companies, where employees have relatively high salaries and greater stability. Compared with the same period in 2019, foreign-owned companies have appeared less attractive in the light of Covid-19.
For universities, it is crucial to help students start their career planning early and set up realistic goals. Employers prefer to take graduates with work experience, so any activities which improve employability are valuable. Also, rising opportunities for freelancing jobs provide graduates with work experience in the relevant industry.
The rise of the gig economy in China
The arrival of the novel coronavirus hit the job market badly, and it also led to an increase in the number of those who work in the so-called ‘gig’ economy, where workers are paid per job, not by the hour.
Following this rapid growth, the industry now offers 200 million jobs in China. For example, delivery app Meituan added 336,000 new drivers from late January to March. The demographics of those delivery drivers are mostly people born post-90s and have multiple jobs.
Four hundred million people are forecasted to be self-employed by 2036, according to Ali Research. Graduates who take freelance work, such as managing WeChat public accounts, are counted in the overall employment figures.
The advance of mobile internet and e-payment services allows freelance workers to be awarded by their talents wherever and whenever they work. Li Ziqi, who makes Chinese rural-style videos on YouTube, is now an internet celebrity, with 30 million fans globally.
The Crayfish.io Marketplace offers an online platform where freelancing workers with Chinese knowledge across a wide range of sectors can connect with businesses to collaborate on tasks or projects.
How can foreign businesses adapt in China?
Although the pandemic has caused great recruitment uncertainty, it could turn out to be an opportunity for companies and organisations to rethink their talent strategies in a post Covid19 China.
1. Review and adjust your China business strategy
For businesses interested in expanding in China, adjustment of resource plans based on particular sectors is necessary.
2. Follow local health & safety guidelines and best practices
To prevent the second wave of coronavirus in China, employees are taking corporate shuttle buses and offering temperature checks in the office. Foreign businesses should follow the same local guidelines.
3. Maintain frequent two-way communication
Leverage informal and formal communication channels to allow employees to ask questions as well as keep them updated with the latest company policy on a real-time basis.
4. Focus on efficiency and productivity by using technology
Many virtual tools and artificial intelligence technology have been used during the crisis to maintain normal business operations. Those tools and technology could be used more in the post Covid-19 era to encourage efficiency and productivity.
5. Take into consideration the discrepancy of generational and regional culture in career choices
An experienced HR consultant at Crayfish.io says, ‘Empower the local management, not just localise it’. When restructuring business operations to meet local cultural requirements, businesses must seek professional assistance if they don’t have a local HR team.
Crayfish.io provides a wide range of standard services which can be ordered online easily, as well as a tailored option to address your specific talent management needs in the Chinese market, whether in recruitment, employment contract or solving HR problems. We also have a marketplace within our online platform where you can leverage our verified supplier pool to fulfil your China business needs.