Recruiting in China

Finance employees are most likely to be replaced by artificial intelligence (AI) in the future, said a research report by Deloitte on Nov. 30, China News reported.

The research investigated nearly 500 managerial staffs in different fields in China, of which more than 80 percent said that AI is most likely to be applied to financial work, and over three quarters said that AI could be used to provide assistance for their management work in five years.

According to the report, most of the respondents think jobs requiring carefulness and preciseness are more likely to use AI than those requiring professional knowledge, logical analysis, and communication and coordination skills.

Enterprises, therefore, should make full use of innovative technologies and tools such as big data and cognitive computing to get ready for both the opportunities and challenges to be brought by AI, said Xie An, a business partner of Deloitte.

Xie added that China's education sector should also make appropriate adjustments to cultivate talents for the coming era of AI.

Amid the massive enrollment expansion of Chinese universities since 1999 and the global economic downturn, finding a desirable job in China is not easy for most new graduates.

Statistics show that only 62 percent of 177,000 graduates in Shanghai found jobs upon graduation in 2015, resulting in high unemployment rates in the city.

Ironically, more than half of all recent Chinese graduates in first-tier cities end up quitting their new jobs within the first two months, according to the figures released by recruitment platform 58.com.

A large percentage was said to be dissatisfied with their salaries while others sought work that would allow them to better improve their skills. A small number ultimately decided it would be easier just to return to higher education or go travel.

Analysts are trying to uncover the real reasons behind this bizarre trend of graduates giving up so soon after entering China's job market.

Some say that post-1990s and millennial-generation Chinese are notorious for being quick to quit, and others are outright criticizing them for being spoiled, immature and impatient - hallmark personality traits of today's young Chinese.

As a university student in my senior year, I can offer some perspective into this perplexing trend. You see, after spending our entire childhoods preparing for gaokao (the national college entrance exams) followed by four years in a university, it's understandable that many Chinese grads would prefer time off to play, travel, party or simply rest before diving into a lifelong career.

Additionally, as my fellow intern, Zhang Qin, here at the Global Times Metro Shanghai wrote in a recent TwoCents article, "Chinese students tend to sacrifice their personal interests in order to get accepted by a better-ranked university that may not offer their first choice of majors ... the decision of which major to pursue is usually influenced or wholly decided by our parents or teachers."

This, then, is also why so many Chinese grads find themselves feeling dissatisfied or downright depressed about their new jobs. It doesn't help that we are pushed by our families into a profession for which we may have no passion, leading to compromising our personal happiness.

Choosing a vocation and dedicating our lives to it is not as easy today as it was for our parents and grandparents. More options, along with more educated, eligible candidates, mean that most of us will have to enter a job at the very bottom, settling for minimal salaries.

Nonetheless, a few uni students I know are one step ahead of the rat race. There's a girl in my grade who has attended six internships throughout her undergrad years in order to identify a career she will be most competent in, then narrow down which specific company she'd most prefer working for. She is a true inspiration not just to our generation but to me personally.

This leads to my own internship here at the Global Times. Originally hailing from North China, I came to Shanghai to study because it is an ever-evolving metropolis full of opportunities.

Over the past three years I have tried to take advantage of all my spare time; instead of lazing around my dorm room, I have worked a number of part-time jobs and internships. I originally wanted to be an English interpreter, but my current internship as a journalist has allowed me to expand my horizons.

Quitting a salaried job right after starting is a permanent blight on your dossier; prospective employers will see how unreliable and irresponsible you are and probably not want to take a chance spending time and money on training you if they think you are just going to jump ship.

Indubitably, more than high scores or skill sets, what recruiters seek in young candidates are loyalty, persistence and strong character.

Yes, older companies may want to consider altering their archaic business models and outdated recruitment practices to better suit the impatient mind-sets of millennials; after all, it is us who will soon be taking over those companies.

But until then, it is wholly up to undergrads to prepare themselves for today's uncertain job market.

Managers seeking to meet the demands of the digital economy need to radically rethink how they recruit and develop their workers.
They should concentrate less on trying to fill vacant jobs or searching for prospective employees with particular academic or professional qualifications. Instead, they should focus more on attracting candidates with the skills the organisation needs – even if jobseekers come from different industries or lack some of the skills required.
These are some of the findings of the World Economic Forum’s 2016 Human Capital Report. The report makes compelling reading and offers valuable insight into how organisations can align their human capital requirements with the fast-changing digital economy. It examines how 130 countries around the world are developing and deploying their human capital. For the first time, the report’s authors have drawn on workforce information provided by digital employment exchanges and platform businesses. Contributors include LinkedIn, Upwork, Care.com in the US and Chinese firm Didi Chuxing. They’ve combined this information with a wide range of public sector data to produce a fascinating analysis of global skills and work trends.
Important findings for businesses include:
• Skill-sets are often a more accurate and consistent indicator of a recruitment candidate’s ability than job titles or qualifications, and can frequently be transferred from one industry to another. While data analysts in the market research and energy industries might have little in common there are strong similarities, for example, in the skills required for this role in the financial services and consumer retail sectors.
WEF report examines how 130 countries around the world are developing and deploying their human capital. Photo: Reuters
• Focusing on skills broadens an employer’s pool of prospective recruits and increases development opportunities for its workers. For example, only 84 000 of LinkedIn’s 430 million members record their job title as “data scientist” or “data analyst.” However, 9.7 million LinkedIn members possess one or more of the primary or sub-skills required by data scientists and data analysts. Around 600,000 have at least five of these skills. A modest investment in training could equip many of them for the role of data scientist or data analyst.
• Businesses can no longer act as consumers of “ready-made” human capital. They have a social responsibility to work closely with educators and governments to develop education systems that keep pace with an increasingly digital and dynamic labour market. Greater in-house development and training are also needed to enable workers to adapt to constantly changing skills requirements.
• Digital work platforms are accelerating the growth of the global “on-demand” workforce. However, most workers currently using these digital services were freelancing before they joined. Digital talent platforms still account for a very small proportion of the “own account” work performed in major economies.
• High talent mobility is shifting key digital skills between countries. Australia, Chile and the United Arab Emirates, for example, are gaining technology skills while Greece, Canada and Finland are losing them.

In the late 1980s, Japan had over-inflated stock and property markets. Its companies, fleeing the lack of opportunities in Japan itself, vastly overpaid for all manner of U.S. assets. I often dreamed that some Japanese investor would overpay for the house I owned at the time.

The rate of Chinese companies making overseas investments has more than doubled since last year. They often have a business model designed to bring technology and foreign business practices to the huge domestic Chinese market?a much better-defined plan than the Japanese, who were mostly purely financial investors, ever did. But, still I worry that they are paying too much.

Let's take a look at a recent deal. Beijing-based LeEco Global Ltd announced last Tuesday that it agreed to pay $2 billion cash for Vizio Inc, a California-based manufacturer of inexpensive television sets and sound bars. This at a time when the dollar is high relative to the yuan. LeEco argued that Vizio will enable it to gain market share in the coming internet-of-things technology that links all kinds of smart products together. And, it certainly may turn out in that LeEco made a smart move in the long run. But, I still wonder about the pricing.

Vizio filed initial public offering papers with the U.S. Securities and Exchange Commission in July of 2015, but never actually carried out the IPO. According to accounting data in the SEC filing, Vizio's profits were $44.96 million in 2014 and $31.35 million in the first half of 2015.

Since Vizio is privately held and decided not to go through with the IPO, subsequent data are not available. But these numbers imply a profit of roughly $56 million in 2015, assuming that Vizio makes slightly more than half of its profits in the first half, as it did in 2014. Vizio has not been a growth company?its sales and profits in 2014 were about the same as in 2010 and were lower in the years in between.

Vizio's business in the U.S. is in brutally competitive markets. Most consumers in the U.S. consider television sets to be almost undifferentiated commodities?they buy the cheapest one. Vizio has become the biggest-selling brand of TVs in the U.S. by following a low-price strategy. But, this strategy leads to very low margins?profits have averaged less than 3 percent of sales.

Vizio's TVs are connected to the internet, so the company receives potentially valuable data on what shows its customers are watching. But, the company so far has not been able to reap profits from this information. In any case, William Wang, the current CEO and majority owner of Vizio, will retain 51 percent ownership of the Insight division, which will own this data.

The bottom line is that LeEco has agreed to pay about 35 times earnings for a producer of near-commodity products in a highly competitive business. This compares with Apple Inc, which currently trades for 11 times earnings, Google Inc at 30, and Samsung Electronics Co at 3.3.

If Vizio had completed its IPO and received 10 times earnings, which seems about right for a low-margin company, it would have had a market value of $600 million. Even at the current historically high average Dow Industrials price-to-earnings ratio of about 20, which is too high for a company in such a competitive market, Vizio would be worth $1.2 billion.

China Daily reported that Jia Yueting, founder and CEO of LeEco, said that the purchase of Vizio is part of a "big bang plan" to enter the U.S. market.

It may get access to Vizio's distribution channels to sell its phones and other products?but, Vizio sells its TVs through big box stores, such as Best Buy Co Inc, which insist on paying low-margin prices to their suppliers.

It may be able to use its LeEco system to add value to the TVs, but Vizio made its name through low prices?proving that customers are reluctant to pay more for sophisticated TVs. Just about every merger or acquisition is justified on the basis of "synergies", but few actually pay off.

Companies spending their own money have more incentive to get it right than does an outside analyst like myself. But, I do hope the current wave of Chinese companies going-out are not paying too much.

(By David Blair)

An applicant talks to hiring staff at a job fair

Employers in China are the most worried about retaining talent among major global economies while the employees are the most concerned about salaries and health, a Metlife report has said.

The U.S.-based life insurance company said that 47 percent of employers in China are worried that talent shortages will affect their business in the next 12 months, and 71 percent said that retaining existing talent is difficult, the highest among 11 countries and regions where the survey is conducted.

The study found that while raising salaries remain the most effective way in retaining talent in China, 58 percent employees said they will stay with their company if an improved benefits package is offered.

Medical-related benefits are the most sought after benefits, followed by life insurance and retirement plans even if employees have to pay the full costs, it said.

"Globally, we are seeing employers increasingly challenged to find innovative ways to attract, retain and engage talent, and China is no exception," said Maria Morris, executive vice president, Global Employee Benefits, MetLife. "We found Chinese employees are more concerned about healthcare than many mature markets such as the U.S., and we expect fast growth of group insurance market in China throughout the healthcare, life insurance, and pension sectors."

Compared with the U.K. and Russia, Chinese employees are less obsessed with cash incentives, Morris added.

It is the first time Metlife include the Chinese market into its global Employee Benefit Trends Study as the insurer noticed huge potential of employment benefit market driven by domestic and multinational companies demands to retain talent.

The China survey covers nearly 393 employers and 367 full-time employees.

State inspectors in southern Tra Vinh Province have requested that the Chinese contractor of a local thermal power project elaborate on its plans for the recruitment of over 3,600 Chinese workers by 2017, said Duong Quang Ngoc, deputy director of the provincial Department of Labor, War Invalids and Social Affairs.

The department’s Inspectorate has coordinated with the management unit for the Duyen Hai Thermal Power Plant III Project in inspecting the project contractor’s plan for the recruitment of foreign workers to ensure that they are employed only when Vietnamese candidates fail to meet the qualifications required for each job title, Ngoc said.

The inspection was made after Tuoi Tre (Youth) newspaper published an article on July 7, questioning the local government’s approval of the plan, under which thousands of Chinese workers will be recruited for the project.

The article came after the provincial People’s Committee approved the plan based on the department’s proposal that was made after the contractor reported that no Vietnamese candidates met the required qualifications.

The Inspectorate now requests that the contractor, China Chengda Engineering Co., Ltd., report on its construction schedule and the plan for its use of workers for 2014 and each year to follow.

This plan must provide all details on the estimated number of employees to be recruited and their specific skills and qualifications.

When such recruitment plan is made available, the Department of Labor, War Invalids and Social Affairs will examine it and if it meets applicable regulations, the department will approve and broadly publicize it nationwide through mass media, not only within the province as previously done by the contractor.

The department will also assign staff to supervise the process of recruitment under the approved plan to ensure that the recruitment of foreign workers is lawful.

Under the current recruitment plan of the contractor, the company will recruit 1,513 workers from now until the year’s end, and 2,162 others by 2017, including 1,528 technical workers.

What makes an ideal employer for white-collar employees has changed over the years, a report found.

The factors in this changing perception are not all strictly work-related as inflation, general welfare and high property prices also play a role, the report jointly released by Zhaopin.com and Beijing University's Institute of Social Science Survey showed.

The annual report was published on Dec 13, together with a list of what are considered to be the top 30 best employers in China.

The survey conducted interviews in 2,132 companies in 17 industries, mostly in first- and second-tier cities.

"Compared with two years ago, white-collar workers are not just focused on high salaries but want more of a welfare package," said Zhu Hongyan, a senior career consultant at Zhaopin.com, one of the country's biggest job-hunting websites.

"They also care more about whether they can get respect, and enjoy good working relationships in the office, rather than simply promotion opportunities, as in the past," she added.

Xu Jianhong, 25, graduated from a top university in Nanjing in 2011 and began work at a leading consulting firm in Shanghai.

"My salary is considered high compared to my classmates, and that's the main reason I chose the job," he said. "But now I find it not worthwhile as the working hours are too long, and there is no work-life balance. I don't have a hukou (household registration) so I cannot enjoy the benefits that come with it."

Xu said that in a year or two, he will consider changing jobs to a more stable company, preferably a State-owned company (SOE) as they have better welfare packages.

"I don't regret the choice I made as I acquired a great many job skills and the relationships within the company are good, with no hierarchy, no bureaucracy. We can discuss issues with the big boss anytime," he said, wondering whether any new job would offer such a pleasant environment.

"If I change and work in an SOE, I worry that the environment within the company will be different and I will have a hard time getting used to the hidden rules."

Xu's opinion was echoed by many of his peers.

Liang Lin, 29, graduated with a master's degree in business from a top university. She has changed jobs three times over the past five years, and said her preference has changed as well.

"The first job I had was with a US insurance company," she said. "It was good pay but long hours."

She wanted a better work-life balance, where she has time to do the things she wants to do.

Now she is representing her company, which is an SOE, as it opens a joint venture with a local company in Shanghai.

"I have more free time, and I get a good social welfare package," she said. "I can do things I enjoy."

Zhu, the career consultant, explained that this change is in line with the theory of Maslow's Hierarchy of Needs. Maslow was a US psychologist who published a well-known paper in 1943 that prioritized human needs.

"This shows that an employee needs develop from basic physiological to higher psychological needs, as the theory explained," she said. "Maslow describes this level as the desire to accomplish everything that one can, to become the most that one can be."

Zhu also explained that SOEs, as they have a market monopoly in certain industries, can provide employees with better welfare packages, including hukou, medical care, children's education and perhaps housing. That complete package, which is hard to get even if a worker has a high salary, is more attractive nowadays.

"As a fresh graduate, I believed that money talked, but now I realize the importance of work-life balance, and the process of self-actualization. To do what you want to do and be allowed to do so is truly a blessing," said Li Xinyuan, who has worked with a US law firm since 2010 after graduating with a law degree from an Ivy-league university in the US.

Her monthly income is double that of her peers who work in SOEs but she said she feels that the money alone is not reward enough.

Li is thinking of getting a PhD degree and then teaching.

"That is more meaningful to me," she said.

Career development and more room for personal growth are the primary reasons that Chinese change their jobs, global recruitment consultancy Robert Walters reported on Tuesday.

Eighty-one percent of the 400 Chinese respondents surveyed said they will change jobs in 2014. Of those, 47.1 percent said the reason was to seek more room for personal growth, while 20.2 percent of them sought promotions in new companies, according to the Robert Walters 2014 Global Salary Survey.

Salary increase, though not weighing as much now as in the past, is still a significant driver of job-hopping. People who stay in their current position can expect a salary increase of between 8 and 10 percent. But for those who change jobs, salaries can jump 15 to 25 percent.

Arthur Wang, managing director of Robert Walters China, said employers should help their employees to map out a clear career path. "If promises are not kept, employees will definitely leave the company," he said.

Judging by the survey data, many Chinese workplaces are black holes of misery and despair.

Only 6% of Chinese employees said they are "engaged" in their jobs, according to a global Gallup survey released this month. China's numbers equal the numbers out of war-weary Iraq.

Workers across all income levels and industries were surveyed by Gallup in China, defined by Gallup to mean they were "psychologically committed to their jobs and likely to be making positive contributions to their organisations".

Out of 94 countries polled, only six countries scored lower rates of job engagement than China, including Tunisia, Israel and Syria. Unsurprisingly, 0% of Syrians admitted to being engaged at work.

In a related survey, China ranked near the bottom in a poll measuring job satisfaction among 22 Asian countries. Only 49% of Chinese respondents said they were happy in their jobs.

Part of the problem, I suspect, is that very few in China have the luxury of pursuing a career that truly interests them.

Even university graduates often feel they have no choice but to opt for positions with the government or state-run enterprises, since those jobs are thought to be stable and recession-proof.

That makes those who are happy at work in China a rare find indeed.

The BBC's ongoing My Day series tracked a typical day in a selection of people across Asia who are immersed in rewarding jobs, including some from China - a maternity nurse and a jack of all trades designer.

The latest instalment in the series tracks the work of a Chinese genealogist. Huihan Lie runs the company My China Roots in Beijing, which traces family histories and tries to put them in the context of the time.

"With every project, you find things you weren't expecting to find and the client wasn't expecting to find," he says. "Really, every person has their own little quirks and personal stories."

We'll continue to add to this series over the next few months. If you have any suggestions of interesting careers you think we should track, please add your comments below.

Regardless of what business you are in or where you operate, it is great employees that make a great company. While hiring great employees can be a challenge anywhere, the process of recruiting, retaining and terminating employees is especially tricky in China.

First, let’s dispel the common misconception that labor is cheaper in China. That’s arguably still true for factory workers, but skilled staffers draw significant salaries. At first glance, the numbers may seem deceptively low. A skilled office manager, for example, is paid a monthly salary of $1,000 to $2,500 in China, compared to $3,750 to $5,000 for a comparable position in Arizona, where my American business is headquartered. But in China, employers pay additional taxes on these wages in the form of “social insurance.” The rates vary by province, but in Shanghai, where I do business, the cost is 44 percent above the base salary.

So for a worker earning $2,000 per month, the cost to the employer will actually be $2,880. Additionally, it is customary at the Chinese New Year to give employees a 13th month of pay — including social insurance — for 12 months of work. Amortize that over the year and it raises the monthly cost to $3,120, which is creeping up toward the American pay scale.

Some may argue that there’s a qualitative difference in employee abilities between the two countries, but my experience is that the best people in China are equal in skill to their American counterparts.

Another critical thing to note is that job descriptions in China need to be much more detailed than those in the United States. Being as specific as possible in the labor contract about your expectations is imperative to establishing good working relationships with your Chinese employees. Simply including a sentence at the end of a job description that says “other duties as directed by your supervisor” will not suffice.

For example, in the United States, we think nothing of requiring an American office manager to wash his or her own coffee cup at the end of the day, but in China, the expectation is that an “ayi” — literally, it means “auntie,” but we would call her a maid — cleans up after everyone. In addition, a male employee may view typing a report as woman’s work — and thus beneath his position. That’s why it’s critical to be completely clear about a job’s specific tasks during the job interview and contract negotiations.

Arizona is a right-to-work state, so adjusting to China’s employment-contract system has been challenging for me. I have found that the best bet is to keep a close eye on details. Here are two basics that should be checked carefully, because they change often, sometimes several times a year:

• Term length: All employees get contracts, and they are issued in one-, two- or three-year terms.

• Probation: The one-year contract allows a probation of 30 days for an employee, the two-year contract allows 90 days of probation and six months’ of probation on a three-year contract.

In the probationary period you can terminate an employee without penalty; however, changes to this system are coming soon, so it’s smart for you to have a system to check contracts when necessary.

The best resources to keep you on the good side of Chinese labor law are your labor lawyers, who will update you when rules change. You definitely need a lawyer to represent your company. Labor contracts tend to be one-sided, and they really only govern how you will treat your employees with little impact on how your employees will treat you.

For example, if an employee has a three-year contract, he or she is not penalized for leaving before the contract ends. But if you decide to terminate an employee, you will need to pay one month for every year remaining on the contract, plus a prorated annual bonus. If you fire a staff member in the ninth month of a three-year contract, you will pay four months of salary. Failure to do so will land you in labor court. I’ll cover that in my next entry.

It sounds temping to go with a short contract, but I’ve found that it doesn’t really allow enough time to judge whether a new hire has the necessary skills and will fit into the corporate culture. For management positions, we use a three-year contract – with six months of probation – and for other positions we use a two-year term.

Think of the time you and your staff spend writing up detailed job descriptions and combing through the contractual fine print as an investment in peace of mind. Proper planning will spare you sleepless nights.

Cui Shufeng is a retired government worker in Beijing. She is one of the lucky homeowners who bought her place long before the housing sector galloped out of reach for the average Chinese salary worker.

"It is ridiculously high," she says pointing to apartments in her neighborhood. "These homes near the school here are CNY 70,000 (USD$11,400) per square meter. It's not even worth 7000 yuan (USD$ 1140) per square meter because it's not even good quality."

Her concern is on the radar of the central leadership that is expected to discuss economic reforms at the plenary session starting Saturday. For Chinese leaders, the property sector is an emotional and political hot potato. The dream to own a home is a far out of reach for tens of millions of Chinese citizens.

In the latest housing data, new home prices for September rose at the fastest pace in almost three years. In Beijing, new home prices were up 16%, Shanghai 17% and Shenzhen 20% from a year ago.

"The problem is Chinese people have very few investment vehicles. They've lost trust in the stock market so they turn to real estate," says Xu Si Tao, China Director of the Economist Intelligence Unit.

Xu says the central leadership needs to make bold steps in financial reforms to give citizens more options to invest their money.
One measure China is considering is to allow banks to set their own interest rates, creating more competition.

I was in Beijing two weeks ago and visited a luxury villa compound. It was a large site with tens of dozens of completed but mostly empty villas. A worker in the sales office told me the average home was priced at CNY 23 million (USD$3.8 million) and most were sold. He said half were owner-occupied (though I saw very little sign of residents) and the other half purchased as investments.

I was told the supermarket in the center of the compound was open and often used by residents. It was clearly still under construction. When I pointed this out, I was then told the grand opening would be next year. Message: The bubble is alive and growing. These villas are a pretty -- and by most appearances, empty -- place to park money.

Cui shakes her head at the dilemma facing the government. She doesn't believe recent curbs will work like a ban on third home loans in Shanghai.

"I don't think home prices will drop sharply because our economy is still doing okay," she says. "Our child bought a home in the U.S. recently. The price was about the same as a flat in Beijing, but the area is a lot bigger and the quality is much better."

They're hiring in China, and 51job is making the most of its market leadership in online recruitment services.

The Chinese company that got its start inserting regional job listings in local Chinese newspapers before expanding into the more lucrative realm of cyberspace posted another quarter of growth after yesterday's market close. Revenue climbed 12% to a better than expected $68.6 million, fueled by a 15% spike in online recruiting. That was held back by 51job's original print business that continues to scale back in scope. 51job once served more than two dozen of China's biggest newspapers with weekly job listings, but it's now retreated to just four publications.

Shifting from print to the Internet has historically beefed up 51job's margins, but not this time. Net income inched just 4% higher to the equivalent of $0.64 per ADS. That's in line with Wall Street expectations, and that's actually a good thing. It's the first time this year that 51job doesn't fall short on the bottom line.

This has been a surprisingly strong performer over the years, more than tripling since I recommended it to Motley Fool Rule Breakers newsletter service subscribers three years ago.

Stateside investors may have a hard time wrapping their heads around a growing provider of online recruitment that isn't in the LinkedIn mold of social networking. Domestic leader Monster Worldwide -- which has struggled in 51job's turf with its diminishing stake in ChinaHR.com -- has been a disappointment for growth stock investors.

Monster reported an 11% decline in revenue for the same three months this morning. The market was braced for the decline, and the stock actually moved higher on the news. But during the same three-year run that has seen 51job more than triple, we've seen Monster shed nearly two-thirds of its value.

LinkedIn has naturally fared well. The career-oriented social networking giant saw revenue during the same quarter soar 56%, and adjusted earnings grew even faster. But here's where the valuation appeal of 51job may sway some investors who are reluctant to buy into China's booming employment scene.

51job may not be cheap at 25 times next year's earnings, but it's a bargain when pitted against LinkedIn's multiple of 99 times next year's profit target. There are regulatory concerns in China, and that's partly weighing on the stock this morning, but it's hard not to like 51job's prospects as a proven Wall Street winner.

Given 51job's consistent growth over the years -- and its guidance calls for another quarter of double-digit revenue growth for the new quarter -- it may just be the better stock at getting the job done in your portfolio.

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The job market has become so competitive that even well-qualified graduates need to secure internships to find work

Twenty-three-year-old Baptist University graduate Trista Hon has reason to be excited. She is about to start working at BDO, an international accounting company, after beating many others for the position.

Hon attributes her success to her two-month working experience in Shanghai in the summer of last year. Hon took part in the government's Mainland Experience Scheme, a five-year pilot scheme launched in 2011 to sponsor short-term internships, or learning programmes, in the mainland for about 30,000 students.

"Auditing jobs require frequent travel to the mainland. It helps a lot that I have some understanding of working across the border. I can also adjust to working in the mainland better than other students," says Hon, who will be based in Hong Kong for the near future.

To prepare Hon for her stay in the mainland last year, Baptist University's career centre evaluated her fluency in Putonghua, along with her ability to cope with emergencies when working outside the territory.

In the current competitive economic environment, internships can give potential graduates a head start. Every day, recruiters are flooded with applications from university students who possess stunning academic credentials.

"We come across graduates with impressive academic and extra-curricular credentials all the time," says Sue Kim, founder of LIBBLE, an online platform established two years ago that is dedicated to the development of new graduates, and job matching.

"It's very easy to find a graduate who speaks four languages, has completed more than three internships or won academic scholarships, on our talent database," says Kim. "Competition has indeed become fierce."

In response to this challenging employment landscape, career centres at universities are constantly on the lookout for internship opportunities locally, globally and in the mainland.

Since 2005, Polytechnic University has required students to complete at least one internship before graduation. Every year, an average of 3,000 students from PolyU are engaged in an internship.

This summer, Chinese University placed 570 students in internships in 24 countries, under its global internship programme.

"Employers prefer job applicants with internship experience because they are more mature and more familiar with the corporate world," says Melina Lai, director of the Office of Careers and Placement Services at PolyU. "They tend to have a stronger work ethic and are more adaptable."

"If a new graduate has never done an internship, employers may wonder if the graduate lacks the initiative to look for one," she explains.

The chance of a student being hired is boosted if he or she has international working experience, according to Dr Tim Wong, head of Baptist University's career centre. "Medium to large-sized companies are selective in the recruitment process, and an international internship would improve the chance for a job candidate," he says.

Echoing Wong, Lai says students with international experience had demonstrated better communications skills and flexibility, and were more independent.

Work experience prior to leaving school is especially beneficial for students without a professional degree. For example, an English major with an emphasis on languages and literature has plenty of options other than teaching, including administration, journalism, legal services, sales and marketing, and public relations.

"Employers are looking for people who have been exposed to more than one particular field," Wong says.

Career advisers at the institutes are charged with the task of equipping students with the skills for a smooth transition into corporate life. Training courses and workshops on job hunting skills, interview etiquette, and resume writing, are organised on campus.

Before they start their internship, students are briefed on issues such as foreign culture, if they are heading to the mainland or overseas, and the jargon of particular industries.

The role interns are expected to play has changed over the years. In the past, the youngsters were seen as helping hands to provide support for the regular staff in an office. But now the new entrants are increasingly being integrated into overall manpower planning.

An internship can pave the way for a permanent position in large companies. Banks, in particular, may issue conditional offers to student workers who perform well, before they get their degrees.

Many employers view an internship as an arrangement that is meant to benefit the company as well as the student. "[It is] for the mutual benefit of the students and the employers themselves," says Lai. "We have come across small and medium sized enterprises which offer internships to develop students' interest in their fields.

"Eventually, the employers hope to secure their long-term commitment to the company. This in turn, helps to plug the shortfall from the turnover of regular staff," she says.

While a university degree, stellar academic results and other criteria are often advantageous, employers also take soft skills into consideration to identify the right candidates.

Sectors like banking, asset management, consumer products, retail and technology want to be sure that the young workers have a can-do attitude and are reliable, Kim says. "To impress experienced recruiters, graduates need to be able to show genuine passion and interest for the role. They can do this by having a good understanding of themselves and their interests," she says.

"They are also looking for people who can formulate their own views. Critical thinking and problem-solving skills are useful, as is the ability to construct a sound opinion." Baptist University encourages students to become involved in community projects. They try to get them to help with the co-ordination, rather than just join in. "Students nowadays tend to be less independent. They need to become proactive in finding resources," Wong says.

The recent death of an intern at Bank of America in London, which is believed have been caused by excessive work, raised questions about the exploitation of young graduates.

"We always monitor the situation of our students closely by keeping in touch with them throughout the internship," Wong says.

Staff from the career centre join students abroad to help them settle in, he says, adding that social media is used to share information among students and keep track of their situation.

A few years after finishing university, Jack Dai thought he had scored the holy trinity of success for a young Chinese man: a government job, an apartment and a wife. But he had not counted on one additional factor, less visible from the surface, that soon drove a wedge between him and his conception of the good life.

To buy his Shanghai house, Mr Dai, 30, took out a hefty mortgage. Monthly repayments now swallow up half his salary. Plus he has the other expenses of Chinese middle-classdom – overseas holidays, shopping excursions, movies and restaurants.

Mr Dai is hemmed in by debt. “Every second month or so, I can’t pay off my credit card bill. I save nothing,” he sighs.

This experience for a young professional, hardly unusual in the west, is a radical departure for China. The older generation, that of Mr Dai’s parents, was famous for its saving prowess. Memories of deprived childhoods in the Maoist era led them to squirrel away most of their earnings even as their fortunes improved alongside China’s fast-growing economy from the 1980s on.

But the young urban Chinese who have entered the workforce over the past decade grew up amid plenty, and their views about saving and spending bear little resemblance to those of their parents. Their willingness to borrow for today and worry about repayment tomorrow is beginning to reshape China’s debt dynamics.

Chinese manufacturing remained weak last month with SME businesses suffering a bigger share of the pain, two surveys showed today.

The official China Federation of Logistics and Purchasing's manufacturing index strengthened slightly to 50.3 from June's 50.1.

Separately, the private HSBC purchasing managers' index fell to an 11-month low of 47.7 from 48.2 in June.

Any reading over 50 signals expansion in a sector, while a figure under 50 signals contraction.

The unexpected rebound in the official survey offered a glimmer of hope that China's slowdown is stabilising. But analysts warned that it was still too early to conclude a decisive growth rebound because the pickup "is still far too modest.

The results also reflect how China's small and medium-sized private enterprises, which analysts say make up a bigger share of HSBC's survey, are more vulnerable to efforts to tighten up lending as well as to slumping global export demand for toys, clothing, electronics and other manufactured goods.

China's big state-owned companies have easier access to bank loans and hardly compete in export markets.

The HSBC report, covering 420 companies, said output at Chinese manufacturers fell as total new orders dropped at the sharpest rate in 11 months because of a decline in new business in both China and overseas. Export orders fell for the fourth month in a row, though at a slower pace.

Exporters said that new sales to Europe, Southeast Asia and the US fell from June. Chinese manufacturers also shed jobs at the fastest pace in four years.

The federation's survey of 3,000 businesses, meanwhile, found production, new orders and most other sub-indicators moved higher. New export orders improved but remained below an index reading of 50 last month.

Fallout from China's manufacturing slump may be felt globally, as declining orders result in less demand for commodities from countries such as Australia and Brazil and for industrial components from Southeast Asia, Taiwan and South Korea.

China has recorded five quarters of growth below 8% in a row - a substantial economic cooling for a country that previously grew at double-digit rates. Analysts said the survey results indicate smaller private companies may still be feeling the effects of a credit shortage that began in June as Chinese regulators try to rein in a lending boom over fears it could race out of control.

The credit crunch caused interest rates on loans between banks to spike to a record high. China's central bank wants to tighten lending standards, which should reduce risk but is likely to reduce financing for private businesses that generate China's new jobs and wealth.

Worried about China's slowing economy? Evan Guo, chief executive officer of Zhaopin Ltd., has more than 2.5 million reasons not to. That's the number of job opportunities posted on Zhaopin.com, one of China's largest recruitment websites.

Despite sharply slower growth, the world's second-largest economy continues to create jobs, he says.

Zhaopin, which is majority-owned by Australian job site Seek Ltd., SEK.AU +2.16% chalked up revenue of $138 million in 2012 with a workforce of 3,200, benefiting from a growing economy and an increasingly Internet-savvy, job-hopping young workforce. But they also face challenges from rival Chinese job sites such as 51job Inc., JOBS -1.54% and from the rise of social networks. Mr. Guo, who previously worked at management consultancy McKinsey & Co. and helmed a state-owned enterprise in China's logistics sector, sat down with The Wall Street Journal in his Beijing office to discuss the evolution of China's Internet and why the models you learn at business school don't work in China. Edited excerpts:

WSJ: What did you learn at McKinsey that has helped you in your current role?

Mr. Guo: At McKinsey you learn ways of thinking, analytic frameworks. But often they are not applicable to the entrepreneurial world in China. In the Western approach, you look at key performance indicators, you check the data. But in China you have to respond very quickly to changes in policy, what employees are thinking, often based on little data. You have to act based on gut feelings; if you act according to what the text books say, you will get it wrong.

WSJ: There is a lot of concern about the slowdown in China's growth. How concerned are you?

Mr. Guo: We won't see a return to 10% growth. Expectations now are for something around 7%. But that's not a disaster. If I look at our own business, employment is still growing. High-tech, logistics, services, health care are all recruiting. We're also seeing rapid growth in job opportunities in third- and fourth-tier cities. I've spoken to a lot of small firms and they are growing fast and adding workers.

WSJ: Do you see any sectors that are doing less well?

Mr. Guo: We see fewer job opportunities in manufacturing, and also in retail. Retail is worrying because the government wants to boost Chinese consumption. But when we look at how shopping malls are doing, they are not doing so well. E-commerce explains some of it, but not all of it.

WSJ: In the U.S., social networks like LinkedIn have been a major challenge to recruitment websites like Monster. How will that play out in China?

Mr. Guo: In the U.S., LinkedIn has overtaken Monster but so far it has not had much impact in China. Chinese are very practical when it comes to switching jobs. You can see that in how Chinese talk about salary. In the U.S. it's considered rude to talk about how much you earn, but in China people are quite open about it.

Zhaopin tells Chinese job seekers what they want: "Can I get more money in this job?" LinkedIn is through social networks, so it's very indirect.

We survey students about where they most want to work. A few years ago, they all wanted to work at multinational firms like Google and Microsoft. Now they see Chinese firms doing well and see them as more desirable, so I am not too worried about competition from overseas firms.

WSJ:Guanxi, or personal connections, is meant to be very important in China. But that's not how Zhaopin works.

Mr. Guo: Job seekers always want the best opportunities. Guanxi can tell you about some of the opportunities, but recruitment websites can tell you about all the opportunities and give you salary comparisons. At the entry-level or the midlevel that's important. For top executives, then it's about personal connections again—they won't be using the website.

WSJ: There is a wave of consolidation in China's Internet. What does that mean for Zhaopin.com?

Mr. Guo: The Internet giants can drive big traffic, but traffic doesn't resolve marketplace issues. In verticals like recruitment or real estate, you need deep knowledge of what customers are searching for to succeed, and that's not easy to develop. I don't worry too much about whether we have this business model or that business model—if I did that I would never sleep. It's more important to think about what customers want and how to give it to them.

WSJ: How much space does Zhaopin.com still have to grow?

Mr. Guo: We are already covering 100 cities so that is already quite wide. But in terms of depth we are quite shallow, covering about 20% of the marketplace. The price employers pay to advertise with us is also quite low by international comparison, so in volume terms and in price terms we have room to grow.

WSJ: Is an initial public offering on the agenda?

Mr. Guo: We are considering an IPO in the future. That depends on capital-market conditions, our own strategy and execution, and what employees want—they see an IPO as a source of pride and a landmark for the firm.

WSJ: How receptive do you think foreign investors are to Chinese firms right now?

Mr. Guo: You have to distinguish between private and public markets. In the private markets, I see private equity and venture capital investors are hungry for deals. But there are less and less good deals and they become more and more expensive. On public markets, high-quality Chinese companies still get attention. Some big funds are interested in Zhaopin.com. But for individual investors, it's more difficult to understand the opportunity when they can't even pronounce the name of the firm.

Résumé
Education: Northwestern University Kellogg School of Management, 1999, with a master's in business administration.

Career: In 1994, Mr. Guo was one of the first analysts in China employed directly by McKinsey, a firm he left as a global partner. He started a software outsourcing firm and headed state-owned logistics operation Sinotrans Air Transportation Development Co., before joining Zhaopin as chief executive in 2010.

Corrections & Amplifications
In an earlier version of this story, the credit accompanying the photo of Zhaopin Ltd. Chief Executive Evan Guo misstated the source of the image as Zhaopin Ltd. The photo was taken by Lilian Lin, a Wall Street Journal researcher.

People aren't waiting until they are unemployed to start looking for their next opportunities. New research has found that 73% of employees say they are comfortable searching for a job while they still have one.

However, those respondents are not only looking for a new job while employed: they're searching while they're working. Respondents say they would be comfortable looking for jobs online, exchanging emails, taking calls and submitting applications while they are at their current places of employment.

While the majority of respondents say they would job-hunt while at their place of work, 26% of respondents say they are uncomfortable looking for another job while they are still employed.

SEE ALSO: 50+ Job Skills You Should List on Your Resume

The researchers found a distinct breakdown by age when it comes to comfort in looking for a new job. Workers between the ages of 18 and 34 were most likely to conduct job search-related tasks at their current job. Overall, 48% of workers in that age range say they are comfortable looking for a job at work. Just more than one-quarter of workers between ages 35 and 44 say they are comfortable looking for a new job at their office. Of workers 55 and older, 21% say they would be comfortable looking for a new job while at the office. The research was based on the responses of 427 workers.

"The grass isn't always greener on the other side, so professionals should first consider how they might improve their current situation before looking for a new job," said Max Messmer, chairman of Accountemps and author of Human Resources Kit For Dummies (John Wiley & Sons Inc. 2012). "When it is time to move on, conducting the job hunt using company resources is not only unethical, it places the employee at a high risk of being caught in the act."

SEE ALSO: 11 Resume Myths Busted: Realities Revealed

To help workers who may be looking for a new job while employed, Accountemps offers the following tips.

1. Look at internal openings first. If you've outgrown your current role but are happy with your work environment, see if there are relevant openings within your company before looking elsewhere. When it comes to filling vacancies, many employers prefer internal candidates.

2. Keep it to yourself. If you want to keep your job search a secret, don't mention it to anyone at work. Even the most trustworthy co-worker could inadvertently spill the beans. It's best to stay mum until you announce your resignation.

3. Play it safe online. Be careful when visiting job boards or using social media to conduct your search. A single status update could be enough to alert your employer. You can further minimize the risk of being caught by ensuring your privacy settings are tight and using services that mask your identity when posting your résumé online.

4. Be upfront with potential employers. Most hiring managers understand that you will need to make arrangements to communicate or meet outside of office hours. Schedule interviews before or after work or during your lunch break.

5. Focus on the details. If you work in a casual environment where jeans and sneakers are the norm, showing up in a suit following a job interview could reveal your intentions. Bring a change of clothes so nothing seems amiss.

6. Partner with a recruiter. A professional recruitment agency is often your best bet when it comes to conducting a discreet job search. A recruiter can confidentially distribute your résumé and identify relevant employment opportunities on your behalf.

Beads of sweat roll down Yang’s face as he nervously fingers the stack of résumés in his hand. On a Sunday morning in mid-July, he and several hundred other recent college graduates—plus a smattering of anxious parents—swarm recruitment stands inside Beijing Worker’s Gymnasium at one of several mid-summer job fairs in China’s capital; the air feels hotter and muggier inside than out.

Yang, who gave only his family name, strolls quickly past white stalls for insurance companies, real estate firms, and the Beijing Auspicious Culture Communications Co. Posters outside each one describe the basic requirements for telemarketers, HR managers, and event planners, but Yang isn’t interested. He graduated from Beijing Technology and Business University this spring with a degree in international business, and still hopes to find a job with a multinational company in that field. He estimates half his peers from the Class of 2013 are still seeking employment—all well aware that China’s state media have already repeatedly dubbed this year the “hardest job-hunting season for college graduates.”

Over the past decade China’s government has pushed for rapid expansion of higher education; the country’s leaders aim to upgrade the labor force and tilt the economy away from low-wage manufacturing. This year, 6.99 million students graduated from universities in China, up 190,000 from last year. There are nearly four times as many graduates in 2013 as there were 10 years ago. But the demand for young professionals in China hasn’t risen nearly as quickly. One government study from last winter indicated that the unemployment rate among 21- to 25-year-old college graduates was 16 percent, four times the official urban unemployment rate.

This spring, China’s economy slowed to an apparent 20-year low; GDP growth in the second quarter slipped to an estimated 7.5 percent. Hiring seems to have slackened as well. The Ministry of Education surveyed 500 large Chinese firms in February about their recruitment plans. The ministry estimates that 15 percent fewer positions will be offered to new graduates this year than last, as Xinhua reported.

Ms. Cai, a wiry woman in her 50s wearing a prim green blouse and brown dress pants, also strolls around Sunday’s job fair—unbeknownst to her daughter, a recent graduate in finance. But Cai feels compelled to help, or try to help, her only child’s prospects, to the bemusement of some recruiters. She is busy collecting pamphlets at one stall when gray-haired Mr. Zhang walks by; he is a father making the rounds, with his son’s résumés in hand.

Yang, the international business major, says he is hoping for a starting monthly salary of 3,000 renminbi ($487). Another job-seeker, who studied software, said 2,500 renminbi ($405) would be OK. That figure is comparable to the average monthly wage of migrant factory workers, which the government-led All-China Federation of Trade Unions calculates as 2,290 renminbi ($372) in 2012. The low salary expectations are also indicative of how an apparent oversupply of college graduates in China has torpedoed their value in the marketplace.

Even with job fairs packed, it’s still common to hear recruiters in China complain they can’t find suitable candidates. Mr. Gao, a bespectacled recruiter for a high-end clothing distributor, stands beside a poster of the company’s founder shaking hands with President Xi Jinping. (Judging from the waistline, it appears to be a much younger Xi.) Gao is looking for sales reps and has collected dozens of résumés in a few hours, but he laments the caliber and attitude of applicants. The most essential factor in the hiring process is not the student’s major, but his or her “capacity”—or willingness to work hard and learn new skills. “China has many talented people, but it is hard to find persistent ones,” he says.

A frequent refrain among recruiters is that China’s educational system ingrains rote memorization, not problem solving, which creates better test-takers than office workers. In a 2013 survey (PDF) of American businesses operating in China, respondents told the American Chamber of Commerce in Shanghai that the “shortage of qualified employees” and “shortage of qualified managers” ranked as their third and fourth greatest concerns, respectively (following only worries about rising labor costs and a Chinese economic slowdown).

One booth at the Beijing job fair is advertising positions for translators and logistics managers in Africa; right now it isn’t drawing a crowd. However, Ms. Pan, a petite recruiter fanning herself with a brochure featuring a map of Africa, isn’t too worried. “Each year most of our recruits come in the late summer and fall,” she says, “after graduates get very desperate and feel they have no more options.”

A record seven million students are expected to graduate from mainland Chinese universities this year, up 2.8 per cent from last year. But with the employment market tightening and competition rising, how are they all going to find jobs?

It should be easy; Chinese students have to be the most diligent bunch of students in the world. From secondary to post-graduate school, they spend every spare minute nose-in-book, cramming for the next test, completing endless hours of homework and taking extra classes at the weekend. A little boy of a friend of mine is six years old. He’s allowed to watch 30 minutes of television a week and play with his friends for an hour. The rest of his time is spent either studying or doing extra activities, such as practising Chinese calligraphy and English, using the abacus, playing tennis and swimming. Surely all of this should lead to a well-rounded student, or could it be a question of quantity exceeding quality?

Let’s examine a few of the reasons why graduates are finding it more difficult to find work. The Chinese economy’s growth is slowing, which would tighten the job market. And often graduate recruitment is the first area to be cut. The Ministry of Education has reported that 15 per cent fewer jobs are on offer for new hires this year than in 2012, according to a survey of 500 leading firms. This causes more competition for the fewer jobs that are available.

While a decade of rapid expansion in China ’s higher education sector has brought many benefits, it has also brought unrealistic expectations from students and an economy that cannot absorb so many graduates into well-paid jobs. This is not limited to undergraduates. A recent survey of Chinese MBA students showed that, on average, they expected to increase their salary by 345 per cent after graduating!

For many graduates, the first choice would be to go into government or to state-owned enterprises; large foreign-owned multinational corporations would be next on the list. The top levels of state-owned companies reserve their places for students from elite universities or those with good connections, and many firms are under pressure to reform. Multinationals are still looking for excellent graduates, especially those with science and engineering backgrounds, but again the competition is tough.

It’s wise to choose as carefully as possible for your first job, but certainly a degree of open-mindedness is needed. Perhaps it is time for grads to forget the brand and consider joining a smaller, local company that can offer real, practical hands-on experience.

Graduates need to maximise their chances of finding work. To do that, they need to consider the following:

Have realistic expectations

In my experience in recruiting fresh grads in Shanghai , salary expectations have almost doubled in the past three years. While starting salary is important for a grad, it should be far less important than training and career development. Find something that you are good at and that you like, and the money will follow, rather than the other way round.

Think very carefully about what major you decide to study

Traditional degrees in science, maths, engineering and medicine will always be in demand, as will other vocational degrees. A business degree can be useful, but it is very important to look into what you will be studying; something that is too abstract or that doesn’t teach you real-world skills is not so interesting to a future employer.

The latest Antal Global Snapshot survey on hiring and firing trends revealed that companies were significantly growing their headcounts in China. In fact, a high majority of companies in the automotive, retail and luxury goods, and health care industries said in April and May that they were hiring specialists for managerial positions. Although the survey targets experienced talents, demand in these areas is expected to remain high, with positions in sales and marketing, IT and accounting, as well as research and development in most demand.

As disposable income increases, demand in consumer-led industries becomes stronger, and fresh graduates should be paying attention to these economic trends when choosing their major and their first job.

Additionally, if you are trying to get a job in an area that has nothing to do with your degree then you are probably going to be near the back of a very long queue.

At university, all undergrads should to do as much non-study as possible

Although your degree is your main focus, participating in charity activities, joining sport teams, doing part-time work or joining societies will add strings to your bow that academic study cannot provide. It might also make you stand out from the hundreds of other first-class students.

Be persistent and flexible

You are very unlikely to find your ideal job, therefore it’s important to be prepared to accept something that was not perfect, but offers you a route to the job you want.

Emilie Bourgois is a PR manager at recruitment firm Antal International China in Beijing

Salaried professionals are facing greater pressure and growing anxieties

Updated criteria for identifying workers labeled "white collar" have been widely discussed among netizens in China in the past few months.

Drafted as of early 2012, the new criteria set the financial requirements for a white collar: a monthly salary exceeding 20,000 yuan ($3,260), owning an apartment with at least two bedrooms and a car worth around 150,000 yuan ($24,450).

The new standard put entry to the club out of reach for most earners.

"Four years ago, people with an annual salary of 100,000 yuan were regarded as white collar. As I finally managed to earn that money, the standard has more than doubled," said an online post by Tangbo Xiaohu.

An online survey conducted by the Beijing-based Legal Evening News and Chinese recruitment website 51job.com in May showed that only three of 562 participating office workers reported to have met all the new requirements.

"The criteria show there is a big gap between Chinese white-collar workers' expected salaries and reality, which put them in a constant state of insecurity and anxiety," said Xia Xueluan, a professor of social psychology at Peking University.

Uneasy life

The definition of white collar in China has evolved a lot since the term was first introduced to China in the 1990s. Decent pay, well-fitted suits and fashionable lifestyles have been the typical impressions of white collars among the Chinese public. But in recent years, the phrase has carried more burdens than benefits.

"If you asked a college graduate in the late 1990s and early 2000s about his or her ideal job, more than 50 percent would list white collar as the first," said Xia. "But now, less than 10 percent would make that choice."

Kong Ranran, a college student majoring in accounting at Peking University's Guanghua School of Management, said that her first job choice is definitely not accounting powerhouses including PriceWaterhouseCoopers (PwC), Deloitte & Touche, KPMG and Ernst & Young.

"Those accounting firms used to be my ideal work destinations and I had dreamed of working there since I was a fresh student in university," said Kong. But she completely changed her idea after a three-month internship at PwC in the summer of 2012.

About a year earlier, Pan Jie, an auditor working for PwC in Shanghai, died of fever-induced illness due to overwork at the age of 25.

"I saw the tough situation behind the halo and it was definitely not appealing," said Kong. "The work hours are endless and it is impossible to squeeze any time for leisure or anything else."

Kong's first choice now switched to civil service, which is the ideal choice among many of her classmates, especially the females. "We need to get married and have babies but we see no hope if we just work, work and work every day," she said.

Ning Xin, working in a law firm in Beijing, recently quit her job and decided to go to the United States for further study. "With so many graduates coming back from abroad every year, it is not the best choice as I might have a hard time looking for jobs after my graduation in the United States, but I can't think about that much as my present work is driving me mad," said Ning.

Ning, for her two years of work in the law firm, enjoyed no vacation at all. On most weekends, she is either working in the office or flying to another city on business.

"Business trips are not as fancy as they sound; we just stayed in hotel rooms and worked on projects day and night," said Ning, who has been to Hangzhou, a famous tourist destination in east China's Zhejiang Province, at least 10 times, but hasn't gotten a chance to walk around West Lake, the most-visited site in the city, for more than one hour.

Even on her last day at work, Ning worked till 11 p.m. to hand over all her projects to workmates. "I don't even have time to enjoy the relaxation," said Ning.

Guomao, a bustling area in Beijing's Central Business District where Ning worked, is the gathering place of taxi drivers after 10 p.m. as they all know people working in companies there often stay late, so it is easy to get passengers.

"We get trapped at work," said 30-year-old Jin Jian working in an advertisement company at Jianwai Soho community in Guomao. "The whole advertisement industry means endless working anyway and we cannot live in this city without salaries since the living cost in Beijing is rocketing."

Jin used to be satisfied with his salary, which is more than 10,000 yuan a month, but it is not enough at all for him. "The mortgage is about 6,000 yuan ($978) a month and the basic living cost is about 3,000 ($489)," said Jin. "If I get married and have a baby, this salary is far from enough."

It is not only the youngsters who feel under pressure. The first generation of white-collar workers in China, mostly in their 40s or 50s, are also in an awkward situation.

David, who declined to reveal his Chinese name, has been working in foreign-funded companies for 20 years and lives a stable middle-class life with the title of marketing director of the Asian-Pacific region.

Since January 2013, the financial report of the company said that some employees would need to be cut due to the slowing economy.

"Foreign companies are no longer glorified places to work, as state-owned and private companies in China are improving very fast with the development of the economy," said David. Some of his contemporaries have started their own businesses with some success, but his time for such entrepreneurship has passed.

"My wife is a housewife and I have two kids studying at an international school," said David. As the only bread winner in the family, he doesn't want to take risks.

Money vs. health

On May 13, 24-year-old Li Yuan died of a sudden heart attack at the office of Ogilvy & Mather Beijing after working overtime for a month prior to his death.

The final message Yuan posted on Chinese social media site Weibo.com shows a photo of the young ad man saluting the camera, presumably as he left the office for the day.

Two days later, a young IT employee working at 17173.com, a Web game operator in Fuzhou City, capital of Fujian Province, died of viral myocarditis due to overwork.

Karoshi—the Japanese term for death by overwork—used to happen mostly in manufacturing factories or construction sites, but is more frequently claiming the lives of people in white collar professions in China. According to a report on China Youth Daily, almost 600,000 people die of work exhaustion in China each year.

According to a survey conducted by the China Moderate Labor Study Center, founded in September 2012, about 70 percent of the white collars working in the Central Business District of Beijing show signs of overwork and 38.4 percent are under serious pressure.

"It is highly competitive nowadays and some workers have to work overtime to compete with their counterparts," said Yang Heqing, director of the center.

Since 1995, China has adopted a standard work week of 40 hours. "But sometimes it is the employees who want to work extra hours, so it is hard to control," said Yang. "It has become a common phenomenon that working long hours turns out to be proof of working hard, while it is not the length of work that matters, but the quality."

"We have the belief that work always comes before life, which also contributes to the stress of working," said Peng Guanghua, a professor at Beijing-based Renmin University of China. "It is a topic for both employers and employees, and the research also shows that working overtime can sometimes lower productivity instead of improving it," he said.

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.

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.

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.

A wave of strikes and worker protests in China's southern export belt is a fresh sign that slowing growth and rising wages have started to pinch the labor market on the world's factory floor.

China Labour Bulletin, a Hong Kong-based labor group, has recorded 201 cases of labor disputes, including strikes, in the first four months of the year in China, almost double the number of cases in the same period last year. In the export hub of Shenzhen alone, 17 cases have been recorded.

China's factories, which have been key components in its export-driven growth of the past decade, are under pressure from rising wages, sluggish demand at home and abroad as well as a stronger yuan. Some are shutting their doors or moving deeper into China's interior, or in some cases to other countries, to hold down costs, often with little compensation for workers.

A survey of more than 4,000 employers by human-resources consultancy Manpower Group found that the net employment outlook deteriorated to 12% in the second quarter, down from 18% in the first, and the lowest level since the end of 2009. The net employment outlook is the difference between the percentage of firms anticipating adding workers and the percentage planning to reduce head count in the quarter ahead.

China's leaders have so far resisted pressure to shift economic policy into stimulus mode. In his summit meeting with U.S. President Barack Obama, President Xi Jinping suggested he was comfortable with the slower pace of growth, according to a government website. But if fraying labor markets trigger rising social unrest, that calculus could start to change.

Still, the situation doesn't so far appear as bad as at the end of 2008, when the global financial crisis triggered a wave of bankruptcies and pushed tens of millions of Chinese workers out of jobs. Then, the prospect of mass unemployment was part of the reason for a massive stimulus package that helped China maintain rapid growth.

When workers of the Jinshuntai Arts Factory came back from China's Labor Day holiday in May, they saw a notice on the factory gate saying the plant in Shenzhen had been closed due to "management difficulties." There was no word on compensation for workers, according to former employee Li Geming.

"I've been working here for 15 years. I just want my compensation for working all these years," said 45-year-old Mr. Li, who had been employed at a company warehouse.

Jinshuntai Arts, set up in 1992, produced a range of toys and Christmas decorations, according to the website of the Shenzhen Municipal Market Supervision Administration. It is owned by Taiwan businessman Zheng Rongwen, the former chairman of Shenzhen's Taiwan Merchant Association. He didn't respond to calls on his cellphone, which subsequently appeared to have been turned off, and employees at his office in Taiwan said they hadn't been in touch with him.

More than 200 former employees gathered at the plant on several occasions to protest the sudden closure, most recently on May 20. But the dispute remains unsettled, said Mr. Li, one of the many migrant workers who have been drawn to the factories of south China from their homes in the interior.

The Shenzhen Federation of Trade Unions said it has already intervened in the dispute but didn't give further details.

China's gross domestic product expanded 7.7% in the first quarter from a year earlier, not bad by global standards but below the norm for China. Economic growth was 7.9% in the fourth quarter of 2012, and economists have been cutting their estimates of growth for this year.

The latest economic data have added to the gloom: Export growth fell to 1% year-to-year in May—pointing to weak demand for the goods produced by many of China's coastal factories.

As export demand slows, Factories are also becoming less competitive. The average monthly wage for migrant workers at the end of 2012 was 2,290 yuan ($374), up 11.8% from 2011, according to official data.

The yuan has also risen strongly against the dollar, hitting sales of exporters and squeezing their profits.

Some smaller firms have left Shenzhen for nearby cities where labor and land are cheaper. Some of the labor disputes arose when workers refused to move.

Shenzhen Grand Best Furniture, which once had about 60 workers, has moved to Huizhou, a smaller city about 68 miles from Shenzhen, according to current and former workers.

A former worker, Xie Shuixian, 46 years old, said he had been making couches for more than a year at the factory when it moved away. He said workers had protested the move but had since accepted a settlement.

"There's no way we can stop them" from moving, Mr. Xie said, saying he received two months of back wages and a small settlement of 1,000 yuan as compensation.

The company's human-resources officials didn't answer phone calls.

Not all the signs on China's labor markets are negative. Continued strong increases in wages point to strong demand. May data from Zhaopin.com, a leading recruitment website, shows a record number of new positions posted. That suggests that outside the factory sector, the hiring picture is stronger.

Still, experts say that trouble for China's blue-collar workers is the shape of things to come.

"As China's growth potential drops and labor costs rise, the number of labor disputes will undoubtedly increase in the future," said Liu Cheng, a labor-law expert at Shanghai Normal University.

—Liyan Qi

Thirty-year-old Ye Lei had worked in a state-owned factory in her hometown Jiangxi Province for seven years. Although she had been promoted to the position of the department head, she quit her job last month to work as a sales representative in a marketing company in Beijing.

"The first thing I want from the job hop is a higher salary. Career opportunities come second," Ye said.

Ye had already received a 13-percent pay raise over the year earlier period before she quit the factory. On April 1, Jiangxi Province increased its minimum wage for the eighth time since 1995. Many workers in Ye's factory have benefited from these wage increases.

Currently, in the most economically developed areas of Jiangxi Province, the minimum wage is 1,230 yuan ($196) per month, or 12.3 yuan ($1.96) per hour. Whereas in some less developed areas in the province, the minimum wage is 900 yuan ($143) per month or 9 yuan ($1.43) per hour.

Even with the raise, Ye still felt her income wasn't keeping up with the increasing cost of living. With profits of the factory dwindling and some of her workers leaving for greener pastures in the service sector, it was time for Ye to jump ship as well.

China's fast-growing service industries are luring workers away from the manufacturing sector. Modest hikes in local minimum wage ordinances do little to staunch the flow of personnel, to which the recruitment postings near the gate of Ye's factory can attest.

A report of The Wall Street Journal presents data showing that in the previous five years, the service industry created 37 million new jobs in China, much more than the 29 million created in manufacturing.

Labor shortage for the manufacture sector in China is not seasonal or short-term, said Kelvin Lau, senior economist of Standard Chartered Bank. Competition for labor is expected to drive up wages.

Stories of wage earners

On May 17, the National Bureau of Statistics of China released last year's average annual wage of the workers in urban non-private sectors, which mainly comprises state- and collectively-owned enterprises and public service institutions. The data show that in 2012, workers in those sectors made an average of 46,769 yuan ($7,459), a nominal 11.9-percent increase over that of the previous year. After deducting inflationary factors, the real annual growth rate was 9 percent.

As often, the release of national salary statistics sparked discussions and prompted people to share their income-related stories.

Lu Mengying, a 31-year-old resident in Beijing, is happy about her current income. She was recently hired as sales representative by a company selling luxury goods.

"My base salary and commission usually add to about 8,000 yuan ($1,276) per month. If things go well, I can make more than 10,000 yuan ($1,595)," she said.

Lu had previously earned rather little at a marketing company in Beijing's Zhongguancun area, China's Silicon Valley, where she had worked for six years after she graduated from university.

Promising earnings prospects drew her to the luxury industry. She enrolled in an expensive training program on luxury industry management. The 15-day training program cost her more than one year's income, but Lu found it worthwhile, as it helped her land her current job.

According to Lu, a "buyer" of a product line under a luxury brand in her company can make at least 500,000-700,000 yuan ($79,700-$111,600) a year. The buyer's duty is to run around the world to collect product information, contact suppliers, place orders and procure products to meet the needs of various consumers.

Currently, buyers are in short supply in China. Lu said that because of her limited ability and her 3-year-old child, she doesn't want to become a buyer, at least not right now. She's more confident about working her way back up to management—of a boutique rather than a factory. Few people in China meet the qualifications for store manager, so such individuals are highly sought after by luxury brands.

Lu's optimism is not unsubstantiated. Last year, a number of international brands exploring markets in second- and third-tier Chinese cities discovered significant demand for sales, human resources, training, business development and leasing professionals, according to a 2013 global salary survey by leading recruitment consulting firm Robert Walters.

Although business executives in many industries get fat paychecks, as indicated by the Robert Walters survey, most first-line workers do not.

Twenty-year-old Li Min, from Huainan City in Anhui Province, is a waiter in Shanghai. His parents also work in Shanghai, and they must support Li's two younger brothers.

As much as he'd like to chip in, Li can barely cover his own expenses, and he doesn't expect his 1,000 yuan ($159) monthly earnings to rise anytime soon. He plans to borrow some money from acquaintances and open a car wash.

Liu Guobao, a 43-year-old welder in Shanghai, also barely makes ends meet. His monthly salary increased to 3,800 yuan ($606) last year from 1,800 yuan ($287) in 2006. Yet having to raise two school-age daughters, he has little money to squirrel away.

The National Bureau of Statistics said that, although average wages in 2012 grew quite fast, income levels differed across regions, industries and positions, and the income gap is yawning wider.

Income disparity in China is quite high. Last year, the country's Gini coefficient, a gauge of income inequality, reached 0.474 after four consecutive years' drop from its peak level in 2008. Nonetheless, it shows an alarmingly wide gap between the rich and the poor in China.

"Since the implementation of the reform and opening-up policy in 1978, China has already established an income distribution system suiting its national conditions and development stage. Yet some salient problems still exist in this area," said Zheng Gongcheng, a professor researching social security at Beijing-based Renmin University of China.

Zheng is also a member of the Standing Committee of the National People's Congress, the country's legislature. He cited such problems as front-line workers' income is still too low, the income gap between various groups is too big, and some people get "grey" and "black" income.

"Increasing ordinary workers' income is a long-term task in the income distribution reform," Zheng said.

Reform suggestions

Public concern over income disparity has prompted government regulatory measures.

Income distribution reform is not as simple as salary reform, said Su Hainan, Deputy Director of the China Association for Labor Studies. Su said that it should involve reform of taxation, social security, social welfare, and other systems.

On February 5, the State Council approved and published opinions on deepening income distribution reform.

The document says that the government will strive to double the average real income of urban and rural residents by 2020 from the 2010 level and let the poor enjoy faster income growth.

Through the reform, the government also aims to expand the middle-income group, sharply reduce poverty, and adjust and regulate excessively high and hidden income.

The government also seeks to raise the share of residents' income in total national income, and increase government expenditure on social security and employment.

The urban-rural disparity is a major contributor to the income gap in China. Some experts say that the urban-rural income gap can explain more than 40 percent of China's income disparity.

Some experts suggest that to shrink the income gap, the government should reform the household registration system, eliminate discrimination against migrant workers, and give farmers greater pricing power when they transfer their contracted farmland.

Monopoly is also another cause of income inequality. Monopoly industries usually pay well, not because their employees work harder, but because of their monopoly of national resources, said officials from the Ministry of Human Resources and Social Security.

Even inside state-owned monopoly industries, income is very unevenly distributed. The Ministry of Human Resources and Social Security and the National Development and Reform Commission once conducted a survey on salaries in dozens of large and medium-sized state-owned enterprises in several monopoly industries, such as petroleum, telecommunications, aviation and electric power generation. The survey showed that in these companies, the highest-paid employee takes home five to nearly 100 times as much as the lowest-paid employee.

Zeng Xiangquan, Dean of the School of Labor and Human Resources at the Renmin University of China, advocates breaking up the monopolies to let markets determine executive salaries as a solution for this particular form of income inequality.

In addition, income distribution reform should not only be an "incremental reform" but also a "stock reform," said Zheng. That is to say, previous unequal income distribution, as reflected in unequal distribution of accrued wealth, should also be adjusted.

To bridge the gap between the rich and poor, both income and property should be regulated, Su said.

The State Council's opinions on deepening income distribution reform indicate the government may soon levy property taxes beyond the scope of the current trials in Shanghai and Chongqing. The possibility of a consumption tax was mentioned, and the government is exploring the feasibility of levying an estate tax in the distant future.

Zheng also suggested that on one hand, the reform should address some pressing issues, and on the other hand, it should set up stable systems to accommodate rational public expectations. He said that confidence in the future can alleviate people's uneasiness and anxiety.

Civil servants are the least happy employees in China, research has revealed.

A survey of over 9,000 respondents found that civil servants had the lowest level of job satisfaction of the 12 sector categories that were included.

According to a report on the All-China Women's Federation website, employees working in the private sector had the second lowest levels, whilst the happiest employees worked in foreign enterprises and joint ventures. The survey was commissioned by the Psychology Institution of the Chinese Academy of Sciences and hosted on recruitment website Zhaopin. Three quarters of those who took it were below the age of 30.

Li Xupei, deputy director of the Mental Health Promotion Centre at the Chinese Academy of Sciences, said some people entering the civil service believed their job would be "easy", but later found that they were "constantly working overtime" and that the work was unexpectedly challenging.

A 2012 survey of civil servants in China's central departments of state also found that 13.5% suffered from severe or extreme stress. Despite this, the number of people taking the recruitment exams for the Chinese civil service rose to a record 1.2m in November 2012.

According to China's Global Times, the Ministry of Human Resources and Social Security has begun a pilot project which offers new civil servants fixed-term employment contracts, ending the widely-held perception that a job in the civil service is a job for life. This may reduce demand for government positions in future.

Li said the survey also found that, despite low satisfaction levels, the "collective happiness" of civil servants was high due to the respect they receive from the public.

China’s migrant workers exceeded 260 million at the end of 2012, with an average monthly salary of 2,290 yuan ($374.09), according to a report by the National Bureau of Statistics of China.

The bureau published the 2012 Investigational and Monitoring Report of Chinese Migrant Workers on Sunday, according to Xinhua News, China’s state-owned news agency. At the end of 2012, the number of migrant workers in China increased by 3.9 percent to 262.61 million, and the average salary of migrant workers rose 241 yuan ($39.37) to 2,290 yuan per month.

Migrant workers were previously farmers or were farmers ancestrally, and as China has modernized have chosen to seek more profitable, most often industrial work, in urban centers across the country. Many – 160 million in 2012 – choose to migrate to metropolitan cities farther away from their home regions.

In terms of income, average monthly salary rose 11.8 percent to 2,290 yuan for Chinese migrant workers in 2012. Workers in Hong Kong, Taiwan and Macau as well as foreign countries make significantly more – 5,550 yuan ($906.63) per month. Workers engaged in transportation and construction work have higher-than-average monthly salaries, 2,735 yuan ($446.78) and 2,654 yuan ($433.55), respectively.

Most migrant workers have not completed more than middle school- level education. In 2012, 1.5 percent of migrant workers were illiterate, 14.3 percent completed elementary school, 60.5 percent middle school, 13.3 percent high school, and 10.4 percent completed higher education. Younger workers and workers who went abroad have relatively higher education levels.

Migrant workers’ average age is increasing as well. In 2008, 70 percent of all migrant workers were below 40 years of age, and in 2012, only 59.3 percent were below 40. Accordingly, the average age increased from 34 to 37.3.

Significantly, many of these migrant workers were not working under contract, and were therefore not entitled to any form of social security. In 2012, 43.9 percent of migrant workers signed employment contracts, a similar percentage compared to previous years.

Meanwhile, 0.5 percent of migrant workers were not paid on time or at all, due to the lack of contracts. Only 14.3 percent received retirement benefits, 24 percent work-related injury insurance, 16.9 medical insurance, 8.4 percent unemployment and 6.1 percent maternity benefits. More than 40 percent of employers of migrant workers did not provide housing or housing subsidies, Xinhua News reported.

The term "hardest job-hunting season in history" has become a buzzword in China recently. According to China's Ministry of Human Resources and Social Security, 6.99 million students will be graduating institutions of higher education this year, a record high since the establishment of the People's Republic of China in 1949.

This intimidating number is inextricably tied with discussion of another pressing issue: the employment rate of college graduates. The latest statistics released by Beijing Municipal Commission of Education show that only 33.6 percent of college graduates in Beijing have signed employment contracts, up 5 percent from April. Meanwhile, a recent report by Tecent-Mycos reveals that college graduates face gloomy employment prospects.

"I just can't figure out why it's so hard to get a job this year," said Miranda Zhang, who is graduating from a university in Beijing. "I feel desperate --campus recruitment is competitive, with dozens of people competing for one position, while HR offices out in the real world usually disregard graduating students because we do not have any prior work experience."

This has not always been the case. Before the financial crisis in 2008, economic prospects for China and Chinese students were a lot better. Businesses were expanding, new companies were emerging, and thus hordes of new employees were needed. However, as China's growth has slowed to 7.5 percent this year, businesses, especially small- and medium-sized enterprises, are showing signs of shrinking. The numbers show that Miranda is not alone in her worries -- the total number of job openings is down 15 percent from 2012.

As Chinese college students come face to face with these gloomy prospects, complaints or expressions of disappointment have grown in online communities such as Sina Weibo (a Twitter-like service), Renren (a Facebook-like service) and Douban (an IMDB-like website for users with shared interests in movies, books, and music).

One of the most common complaints is the unfairness recent graduates have experienced in the job interview process. In fact, a lack of transparency or the use of guanxi (connections) is particularly evident in competition for jobs at state-owned enterprises or in civil service -- these positions are considered much more stable and better-paying than other jobs in China.

Sara Wang, a journalism student at Wuhan University, described what she thought to be unfair competition for a job at Chinese National Radio. She stated that she made it all the way through the resume selection process and written exams to the last round of interviews, but was eliminated during the physical examination. She speculated that someone else used guanxi to get the job, but was unable to prove that this had been the case. Perhaps that is why Weibo user @????? proposed that to solve the problem of unemployment, "the essential thing to do is to ensure the transparency and fairness of the employment process."

Some attributed the large-scale unemployment to the college students themselves. Netizen @???? wrote:
How can you satisfy a bunch of poor college students who have grandiose aims but puny abilities? What they want is a job that does not require much labor, in which they do not need to expose themselves to the elements, one with high social status and a high salary, where they can play games while they are at work and attend social gatherings while they are off work; in other words, a "golden rice-bowl" job within the system. [College students] think that with their educational achievements, they do not belong to the working class anymore and that they deserve a white-collar job at the very least. No wonder they cannot get a job.
While this is true to some extent, a larger proportion of people held the government responsible for the unemployment problem. In fact, the public has long criticized Chinese colleges' blind expansion.

Weibo user @M3MStudio mused:
The Ministry of Education is responsible for maintaining the employment rate -- isn't that ridiculous?" "The Ministry of Education should feel guilty because students nowadays cannot make full use of what they learn in college, and what they learn in college is useless in their careers. Colleges are like companies; teachers are like bosses; and students have become nothing but tools for colleges and teachers to compete for fame and profit. The education system in mainland China has collapsed.
Despite such gloom, Xu Mei, the spokesperson for the Ministry of Education, suggested that the employment rate and the number of graduating students signing employment contracts would increase greatly in June. At the same time, Xu also affirmed that the Ministry would act to ensure that the employment rate of college graduates would not decrease, a statement to which netizens responded with some derision.

Weibo user @??LostMyself wrote, "The Ministry of Education's prediction will be realized with 100 percent success, because this is what they are best at. I believe every graduate knows the real deal with the so-called employment contract signing rate!"

Four years ago, emulating an Australian global competition for the "Best Job in the World," a lavender farm in Guangdong province launched a national search for two gardeners for the "The Best Jobs in China".

The requirements of Tourism and Events Queensland were simple: It wanted a caretaker for a local tropical island who could speak English, swim and blog. But the Guangdong advertisers required only "beautiful" women aged 18-25 and taller than 163 centimeters to apply to work on rolling lavender fields for a weekly salary of 20,000 yuan ($3,260). Candidates were also asked to specify their vital statistics and state "which part of your body you like the most" in the online applications.

The case shows how blatant and direct discrimination can be in China's job market. To understand how prevalent it is, one just needs to take a look at a recent directive of the Ministry of Education that bans universities from hosting recruitment exercises with discriminatory terms on gender, hukou (residency permit) and academic qualifications.

This is the first time the ministry has banned job advertisements inviting applications only from graduates of elite universities on special government support programs. Such universities account for only 6 percent of the total and accommodate less than 10 percent of all college students nationwide. With a record passing out of 6.99 million graduates this summer, discrimination against those with degrees from less illustrious schools may become even worse as the number of candidates far outstrips the jobs on offer.

Despite skepticism about the effectiveness of the measure that will only be enforced on campuses, advocates of equality and justice in China hope it would be the beginning of the end of a chronic social problem that denies many people the opportunity to realize their "Chinese Dream".

Employment discrimination has deep roots in Chinese history and culture. Often poorly educated people are not aware that their basic rights are violated when employers demand discriminatory preferences for jobs. It can be too subtle for applicants to realize that a decision has been made on the basis of personal features unrelated to work.

But on many occasions, employers explicitly discriminate against jobseekers with wide-ranging criteria on age, sex, personal appearance, disease, ethnicity, birthplace, marital status and hukou. The list has been growing, with the bias for "elite" colleges being the latest addition.

Better-informed jobseekers who stand up to the mistreatment may find the costs of lawsuits prohibitively high, and the existing laws and regulations don't necessarily work in their favor.

A Chinese employment promotion law passed in 2007 prohibits differential treatment of jobseekers based on the grounds of ethnicity, gender, religious beliefs, age or physical disability. But the law is difficult to enforce, because it lacks clear standards and does not specify how to deal with violators of the law.

Earlier this year, a jobseeker in Guangdong province was awarded 601 yuan in the country's first gender discrimination case to be ruled in favor of a complainant. However, her lawyer who provided pro bono legal service said the case had to be resolved through labor authorities because the court found it hard to prove discrimination on the basis of gender and to measure the victim's loss.

Public appeal has been growing for a law that provides clear rules on violations and standards for proving job discrimination. Until that happens, the onus will largely rest on the government to promote equality and responsible employment practices. The government can work out guidelines for job ads, like the Ministry of Education's ban on discriminatory hiring activities on campuses, to let people know that discrimination is wrong and should be stopped now.

It's embarrassing to see employment discrimination pervade the lower strata of society six decades after the workers were declared the masters of the country.

Marissa Mayer may want to take a leaf out of the Chinese HR manual when taking on the pyjamas-wearing home-workers as boss of Yahoo.

At many Chinese companies, even sinecures in the state sector, mid-level managers and above are required to keep their phones switched on and answer email within two hours – when they’re on holiday. That gives a new meaning to the concept of “work from home”: in China, it’s what you do when you ought to be on holiday.

Diligence like that comes with the territory, it seems: leisure has had a bad rap in China since the days of the iron rice bowl. And blurring the work-life boundary is nothing new either. Under communism, the party picked your job and your job determined almost everything else: where you ate, slept, birthed your offspring and even spent your dotage. Work and life were kept in perfect equilibrium – or else.

Even today, many Chinese workers find it hard to tell where work ends and life begins. Construction workers live on-site, in the same flimsy prefab shacks, festooned with seemingly the same pair of tattered underwear air-drying outside the window, throughout China. When the shack went up and the undies went out on the vacant lot opposite my home, I knew the cranes could not be long to follow.

And even after completion, Chinese apartment buildings are filled with live-ins – not maids but welders and plumbers and tilers and carpenters. Flats in China are sold as empty shells, and those who fill them with floors and walls and bathrooms and kitchens live there while they work (which is why the sound of drilling never takes a holiday either).

A few outliers in the business world have begun to sing the praises of something other than nonstop toil. Last week Jack Ma, founder of the e-commerce titans Alibaba and Taobao, used his swansong as CEO to announcethat “from tomorrow, my career is to enjoy life”.

Some Chinese companies have begun to offer lifestyle concessions to keep employees happy, says Jennifer Feng, chief HR expert at 51job, one of China’s leading recruitment agencies – such as allowing employees to refuse to take phone calls or answer emails for two to three days. Per week? Per month? “A year,” she says: two to three days out of 365.

And although that particular form of indolence known as “working from home” is out of fashion at Yahoo, where Ms Mayer has told staff to work from the office, it is getting its first tentative trials in China. One local government in Shanghai is trying to promote the concept by working with Ctrip, China’s largest, Nasdaq-listed travel agency.

Ctrip told local Chinese news that it had lowered its usual requirements for age and appearance, and focused more on honesty and responsibility when deciding which employees should be allowed to work without coming to the office.

The company’s CEO, James Liang, wrote up Ctrip’s nine-month experiment in home-working with Stanford University professor Nicholas Bloom, concluding that performance increased dramatically and attrition fell sharply – while the company saved about $2,000 per employee per year worked at home.

Half of the 1,000 studied employees stayed in the office as a control group, while the other half donned their telecommuting loungewear. Attrition rates among those in pyjamas were 50 per cent below the white-collar cohort. After the experiment ended, those who chose to continue telecommuting recorded performance that was 22 per cent higher than the work-at-works.
But Ms Feng of 51job says she thinks most Chinese workers and employers do not share Ctrip’s sanguine view of the supposed win-wins of telecommuting. Some Chinese IT companies banned working at home even before Ms Meyer got around to it and others that offered staff the chance to stay home one or two days a month have not found such offers to be that popular, she says.

Most telecommuters found they were working longer, not shorter, hours, says Ms Feng. “If they work at a particular place for particular hours, that gives them a reason to refuse after-work meetings, but when they work at home?.?.?.?they are required to reply to emails within half an hour, attend meetings and distance-learning courses at night,” she says.

At that rate, they might be better off on holiday: at least that way, they get a full two hours to hit the reply button.

Four years ago, emulating an Australian global competition for the "Best Job in the World," a lavender farm in Guangdong province launched a national search for two gardeners for the "The Best Jobs in China".

The requirements of Tourism and Events Queensland were simple: It wanted a caretaker for a local tropical island who could speak English, swim and blog. But the Guangdong advertisers required only "beautiful" women aged 18-25 and taller than 163 centimeters to apply to work on rolling lavender fields for a weekly salary of 20,000 yuan ($3,260). Candidates were also asked to specify their vital statistics and state "which part of your body you like the most" in the online applications.

The case shows how blatant and direct discrimination can be in China's job market. To understand how prevalent it is, one just needs to take a look at a recent directive of the Ministry of Education that bans universities from hosting recruitment exercises with discriminatory terms on gender, hukou (residency permit) and academic qualifications.

This is the first time the ministry has banned job advertisements inviting applications only from graduates of elite universities on special government support programs. Such universities account for only 6 percent of the total and accommodate less than 10 percent of all college students nationwide. With a record passing out of 6.99 million graduates this summer, discrimination against those with degrees from less illustrious schools may become even worse as the number of candidates far outstrips the jobs on offer.

Despite skepticism about the effectiveness of the measure that will only be enforced on campuses, advocates of equality and justice in China hope it would be the beginning of the end of a chronic social problem that denies many people the opportunity to realize their "Chinese Dream".

Employment discrimination has deep roots in Chinese history and culture. Often poorly educated people are not aware that their basic rights are violated when employers demand discriminatory preferences for jobs. It can be too subtle for applicants to realize that a decision has been made on the basis of personal features unrelated to work.

But on many occasions, employers explicitly discriminate against jobseekers with wide-ranging criteria on age, sex, personal appearance, disease, ethnicity, birthplace, marital status and hukou. The list has been growing, with the bias for "elite" colleges being the latest addition.

Better-informed jobseekers who stand up to the mistreatment may find the costs of lawsuits prohibitively high, and the existing laws and regulations don't necessarily work in their favor.

A Chinese employment promotion law passed in 2007 prohibits differential treatment of jobseekers based on the grounds of ethnicity, gender, religious beliefs, age or physical disability. But the law is difficult to enforce, because it lacks clear standards and does not specify how to deal with violators of the law.

Earlier this year, a jobseeker in Guangdong province was awarded 601 yuan in the country's first gender discrimination case to be ruled in favor of a complainant. However, her lawyer who provided pro bono legal service said the case had to be resolved through labor authorities because the court found it hard to prove discrimination on the basis of gender and to measure the victim's loss.

Public appeal has been growing for a law that provides clear rules on violations and standards for proving job discrimination. Until that happens, the onus will largely rest on the government to promote equality and responsible employment practices. The government can work out guidelines for job ads, like the Ministry of Education's ban on discriminatory hiring activities on campuses, to let people know that discrimination is wrong and should be stopped now.

It's embarrassing to see employment discrimination pervade the lower strata of society six decades after the workers were declared the masters of the country.

Italian explorer Marco Polo spent 17 years working in the court of Kublai Khan's China, but today most foreigners seeking to live and work in the country aren't looking for the same time-invested cultural exchange.

"It's the place to make money," explained Aynura Askerova, a Russian who has lived in the southern Chinese metropolis of Guangzhou for four years.

Work as a fashion model has taken Askerova across China and the rest of Asia, but "now it's time to find a real career," she said last month, in an overly-illuminated hotel conference room in the city's China Marriott Hotel.

Like hundreds of other visitors from across the world, the graduate in software development from Kazan State University was there for the Jobs Fair for Foreigners; one of three annual events organized by the Chinese government, where expats get a rare chance to meet prospective employers face-to-face.

The events have been a honeypot for job-seeking expats, particularly since the global economic crisis of 2008. While economic growth in China has slowed in the last year, the 7% to 8% predicted growth is positively booming compared to Europe and the United States, leading many to believe their prospects there might be better than at home.

However the perception that expats, particularly from western countries, can just walk into a job or career in China is now out of date.

"The novelty of being a foreigner has worn off," said Shanghai-based Simon Lance, regional director in China for recruitment firm Hays. "Employers are seeking value. Demonstrating a genuine commitment to China is key."

That can include language skills and being willing to spend more than just one or two years in the country, he added.
Read more: Can China become a melting pot?

According to a report by the state-run Xinhua news agency, nearly 7 million new Chinese graduates entered the jobs market last year. It's a figure that is set to increase in the coming years as China expands its number of higher education institutions, adding to the challenge for foreigners embarking on their careers in the country.

"That side of the workforce there's almost an oversupply of junior end candidates," said Lance. "So it's hard for expats to compete. Without Mandarin or local language skills I'd say it's almost impossible."

Nick Cucinella, CEO at CareerBuilder China, advises graduates to have a CV in both English and Chinese, even if they don't speak the language, and that taking the initiative and targeting prospective employers and Chinese companies is the best path to a job.

"Not many people do that, but if they do they will be very well received. Too many just use jobs sites and search engines," he said.

Read more: The best job in 2013 is...

However for those with established careers and particular skill-sets, demand exceeds supply in many industries.

Big infrastructure projects in China mean that recruitment companies are seeing a desire for experienced architects and design engineers, plus a strong demand for those in the pharmaceutical industry, as local and international companies invest in R&D facilities in the country.

"Chinese companies realize they have to offer more than just a job, but show that the city is good place to live, raise children and there's enough going on," said Cucinella.

The recruitment process in China could also seem quite strange to many westerners.

"At a market in China you're expected to haggle and that applies in some way to job negotiations. Westerners don't want to feel like they're haggling over their life, they want to feel wanted," said Cucinella.

However a larger trend is localizing the workforce across positions, believes Lance.

If the employers he recruits for have a wish-list it is usually for a Chinese national who has gained many years of experience studying or working abroad.

These "haigui," or sea turtles as they are called in China, hit the employment sweet spot with "both the cultural connection and the language skills," according to Lance.

"They provide a pretty good compromise between being able to connect and communicate with local Chinese staff, but have a good understanding of western business and management practice. They bridge the two worlds quite well."

Read more: Can Twitter get you a job?

For those expats at the Guangzhou event swimming against the rising tide of competition, employing a number of techniques is necessary to make it in China -- local connections being one of the most useful.

"Having a connection, or 'guanxi,' is important," said German national Max Storz, who found a sales job in Guangzhou through a contact of his girlfriend. "It helps a lot to find a job and get things done in general."

It's worked for Askerova, too. With business partners she met in China, she has been able to register a trading company in Hong Kong alongside developing a modeling career.

"There are cultural differences to work out, and it was hard for me at first (living in Guangzhou), very different," she said. "But there is really nowhere else like it."

At 7.7%, China’s annual GDP growth in the first quarter of this year was slower than many expected. While the data were hardly devastating relative to a consensus forecast of 8.2%, many (including me) expected a second consecutive quarterly rebound from the slowdown that appeared to have ended in the third quarter of 2012. China doubters around the world were quick to pounce on the number, expressing fears of a stall, or even a dreaded double dip.

But slower GDP growth is actually good for China, provided that it reflects the long-awaited structural transformation of the world’s most dynamic economy. The broad outlines of this transformation are well known – a shift from export- and investment-led growth to an economic structure that draws greater support from domestic private consumption. Less well known is that a rebalanced China should have a slower growth rate – the first hints of which may now be evident.

A rebalanced China can grow more slowly for one simple reason: By drawing increased support from services-led consumer demand, China’s new model will embrace a more labor-intensive growth recipe. The numbers seem to bear that out. China’s services sector requires about 35% more jobs per unit of GDP than do manufacturing and construction – the primary drivers of the old model.

That number has potentially huge implications, because it means that China could grow at an annual rate in the 7-8% range and still achieve its objectives with respect to employment and poverty reduction. China has struggled to attain these goals with anything less than 10% growth, because the old model was not generating enough jobs per unit of output. As Chinese manufacturing moved up the value chain, firms increasingly replaced workers with machines embodying the latest technologies. As a result, its economic model spawned a labor-saving, capital-intensive growth dynamic.

On one level, that made sense. Capital-labor substitution is at the heart of modern productivity strategies for manufacturing-based economies. But it left China in a deepening hole: increasingly deficient in jobs per unit of output, it needed more units of output to absorb its surplus labor. Ultimately, that became more of a problem than a solution. The old manufacturing model, which fueled an unprecedented 20-fold increase in per capita income relative to the early 1990’s, also sowed the seeds of excessive resource consumption and environmental degradation.

Services-led growth is, in many ways, the antidote to the “unstable, unbalanced, uncoordinated, and ultimately unsustainable” growth model that former Premier Wen Jiabao’s famously criticized in 2007. Yet services offer more than just a labor-intensive growth path. Compared to manufacturing, they have much smaller resource and carbon footprints. A services-led model provides China with an alternative, environmentally friendlier, and ultimately more sustainable economic structure.

It is premature, of course, to conclude that a services-led transformation to slower growth is now at hand. The latest data hint at such a possibility, with the tertiary sector (services) expanding at an 8.3% annual rate in the first quarter of this year – the third consecutive quarter of acceleration and a half-percentage point faster than the 7.8% first-quarter gain recorded by the secondary sector (manufacturing and construction). But it will take more than a few quarters of mildly encouraging data to validate such an important shift in the Chinese economy’s underlying structure.

Not surprisingly, China skeptics are putting a different spin on the latest growth numbers. Fears of a shadow-bank-induced credit bubble now top the worry list, reinforcing longstanding concerns that China may succumb to the dreaded “middle-income trap” – a sustained growth slowdown that has ensnared most high-growth emerging economies at the juncture that China has now reached.

China is hardly immune to such a possibility. But it is unlikely to occur if China can carry out the services-led pro-consumption rebalancing that remains the core strategic initiative of its current (12th) Five-Year Plan. Invariably, the middle-income trap afflicts those emerging economies that cling to early-stage development models for too long. For China, the risk will be highest if it sticks with the timeworn recipe of unbalanced manufacturing- and construction-led growth, which has created such serious sustainability problems.

If China fails to rebalance, weak external demand from a crisis-battered developed world will continue to hobble its export machine, forcing it to up the ante on a credit- and investment-led growth model – in effect, doubling down on resource-intensive and environmentally damaging growth. But I remain hopeful that China’s new leadership team will move quickly to implement its new model. There are no viable alternatives.

Financial markets, as well as growth-starved developed economies, are not thrilled with the natural rhythm of slower growth that a rebalanced Chinese economy is likely to experience. Resource industries – indeed, resource-based economies like Australia, Canada, Brazil, and Russia – have become addicted to China’s old strain of unsustainable hyper-growth. Yet China knows that it is time to break that dangerous habit.

The United States is likely to have a different problem with consumer-led growth in China. After all, higher private consumption implies an end to China’s surplus saving – and thus to the seemingly open-ended recycling of that surplus into dollar-based assets such as US Treasury bills. Who will then fund America’s budget deficit – and on what terms?
CommentsView/Create comment on this paragraphJust as China must embrace slower growth as a natural consequence of its rebalancing imperative, the rest of the world will need to figure out how to cope when it does.

With escalating labor and rental costs as well as manpower shortages on the mainland, 'relocation' has become the new buzzword for HK factory owners. Sophie He talks to them about their experiences.

Around 25 years ago, many Hong Kong factory owners, including Willy Lin Sun-mo, managing director of Milo's Knitwear (International) Ltd, moved their manufacturing facilities from Hong Kong to Guangdong province on the mainland to take advantage of cheap labor and low rental costs.

At that time, a worker's wage was as little as 8 yuan per day. Currently, wages at Lin's Dongguan factory have risen beyond 60 yuan per day - almost more than seven times what they used to be.

Today's mainland factories, especially those located in the Pearl River Delta, find it hard to recruit enough workers.The trend started with millions heading home annually for Chinese New Year holidays, only for large numbers to refuse to return to work. The workers preferred to stay at home for lesser-paid jobs and be nearer their loved ones and families, enhancing the jobless situation in many cities - a phenomenon that has become increasingly common these days.

As many factories in Guangdong face the triple challenges of rising labor costs, labor shortages and strong increases in rental, many factory owners, including Lin, turned to relocation or investments in factories on the mainland's hinterland, or even transplanting to neighboring countries as a solution to their problems. By moving factories to where labor was both adequate and cheap, owners expected to offset their challenges and be rewarded with bigger profit margins. And while some have benefited from such moves, others have not.

Lin told China Daily that Milo's Knitwear, whose Dongguan factory was established over 20 years ago, faced labor shortages several years ago, a problem shared by many such plants. As most of his workers in the Dongguan facility are from Jiangxi province, Lin invested more than 30 million yuan to set up a plant in Jiangxi four years ago, while answering the central government's call to companies to invest in the central and western area of the country. But he simultaneously invested in automation at his Dongguan factory, replacing semi-automatic machinery with its fully automatic equivalent.

When the Jiangxi factory went operational, Lin planned to recruit as many as 2,000 workers. But despite four years of production, the factory has only hired 300 workers, Lin says, explaining that few young people who lived in the area also wanted to work near their hometown.

"Most of the young people (who are born in smaller cities) on the mainland wanted to experience life in big cities, and thanks to a well-developed transportation system in the country, they can work in big cities and return to their family overnight," Lin says.

For those who choose to work near their family and loved ones, factory owners found these workers are easily distracted by domestic chores.

"The workers (in the Jiangxi factory) never want to work overtime, as they want to go home, prepare dinner, or take care of their children," Lin points out, adding that such distractions from home means the Jiangxi workers are not as efficient as their Dongguan counterparts.

The Jiangxi factory still hasn't broken even after four years. However, Lin has no intention of giving it up, as Jiangxi labor costs are still lower than those of Dongguan, and the local government is supportive.

So Lin improvised change. "Recently, it crossed my mind that since Jiangxi workers are having such a hard time adapting to our business model, maybe we should change our business model to adapt to them," he says.

Lin says that instead of producing entire garments in the Jiangxi factory, his company decided to produce only part of the garments there, thus making it easier for workers; meanwhile, the company can also lower its requirements to adapt to their production habits.

Relocation outside the mainland

Another company Top Form International, a Hong Kong-listed brassiere manufacturer, has two production plants; one in Foshan, Guangdong province, and the other in Jiangxi province. Both were established 30 years ago to manufacture lingerie for export to the United States and Europe. The two factories have a combined labor force of some 4,300 workers.

Top Form used to have a third factory in Shenzhen, but it closed down last year, as workers' monthly wages doubled from 2,000 yuan five years ago, to more than 4,000 yuan today. Difficulty recruiting sufficient numbers of workers was another reason for the plant's closure.

Four years ago, the company decided to close down the Shenzhen factory as part of a "strategic shift" to reduce capacity in high-cost areas and increase capacity outside the mainland where costs were lower.

According to Top Form chairman Willie Fung Wai-yiu, producing brassieres requires numerous manual procedures, so the company is heavily dependent on workers and is highly sensitive to workers' wage fluctuations.

Top Form then set up a factory in Thailand where it has since doubled the number of workers to 4,000 as of 2011. The company also established a factory in Cambodia in early 2012 and hopes to staff it with 2,000 workers. Average production costs in Thailand and Cambodia are 15 percent lower than on the mainland. The company expects to have two thirds of its total production capacity outside the mainland eventually, up from the current 47 percent.

But the relocation of Top Form's factory to Cambodia brought trouble from the outset.

Fung says that by September 2012, the factory had up to 700 workers, but then out of the blue, they downed tools and went on strike.

Illegal strike

"The strike was illegal.We had to take the workers to court, and the final ruling was in the company's favor, but by that time we had already paid dearly for the incident," Fung explains, adding that the strike action saw the company close its factory for weeks and release the majority of the workers.

Top Form's Cambodia factory is already back into full swing and currently has around 300 workers. But the incident forced Fung to do some serious thinking. As a result, he wants to share what he has learned from the relocation initiative with factory owners who may also want to expand their manufacture into Southeast Asian countries.

In retrospect, Fung says it is far better to train a local management team in the country the factory is relocated to, than to introduce a new management team from Hong Kong or the mainland to the country. "As it is hard to keep a non-local manager away from his family for many years, it is better to train a local manager who will ensure smoother operations," he says.

It's good to bring in staff from overseas, but that is only half the job

Since China joined the World Trade Organization in 2001, a great number of its state-owned enterprises have developed businesses overseas. An increasing number of SOEs are also conducting international commerce with other countries. Both trends show us that the need for excellent international talent has become inevitable for SOEs. But the fierce competition among all kinds of companies in the knowledge-based economy has led to an urgent lack of foreign talent in SOEs over the years.

There is no doubt that it is critical for companies to take care of their foreign talent, especially high-end management talent and multitalented expats. From human resource management to human resource development, to retain foreign talent can be presented in every detail. But it is difficult to say whether SOEs have done a good job in retaining foreign talent.

To begin with, I would like to talk about the process of adaptation by foreign talent to the Chinese working environment. SOEs should always bear in mind that foreign employees may not stay at the company till the end of their contract.

If an SOE really wants a foreign talent to stay in the company for a long time, it really needs to take action. For instance, in order to help skilled foreigners get used to the environment quickly, a mentor from the company can be arranged to help the foreign employee with life and work issues. SOEs can also plan team-building activities to encourage them to communicate with local employees. Moreover, SOEs can organize training sessions for new employees so that they can get familiar with the company within a short time.

Another important issue is that fairness, transparency and efficiency in performance appraisals should be improved so skilled foreigners can receive objective feedback about their work. A fair performance appraisal plays an important role in the development of one's career. Foreign employees enjoy positive recognition from their company, while negative feedback may stimulate them to work harder.

It is also very important for a foreign talent to see an SOE's real action. To be specific, if a foreign talent performs very well, he or she expects to see a salary increase that matches what is noted in the performance appraisal.

Developing a better incentive system is also a positive action to take for SOEs.

What needs to be addressed is that both psychological and material incentives should be considered. The psychological incentive refers to an encouraging environment for foreign talent. Positive comment and feedback from management can infuse foreign talent with confidence, which can also develop into work motivation.

As for material incentives, I think SOEs should come up with some smart ones. By saying smart, I mean incentives that are tailored to foreign talent. Take housing subsidies. For foreign employees, a housing subsidy is not really practical. The majority of foreign employees in China rent houses rather than buy them. Instead of paying for the housing subsidy, SOEs could choose to pay for Chinese language courses if they are going to stay in China for a long time.

Another issue is with Chinese medical insurance. The Chinese medical insurance only covers expenditure in Chinese hospitals, but it is difficult for most foreign employees to talk with doctors or nurses in the local language. SOEs should consider foreign hospitals or clinics as options.

Lastly, taking care of the family of a foreign employee is also a good way keeping them. Foreign employees, being in another country, are unable to spend time with their families. Arranging a trip for the family of the foreign employee may be a great idea.

There are still a lot of challenges for SOEs. Attracting and retaining international talent is certainly not an easy task, but it would be helpful for SOEs to solve the issue of retaining talent by considering the suggestions set out here.

The author is CEO & founder of RMG Selection, an Asia-focused human resources and recruitment consultancy.

The refined techniques of recruitment firms are in demand

An increasing number of Chinese companies are turning to international headhunters for high-quality overseas professionals, as they do not have the extended professional connections needed to find such talent.

Zhang Ruguo, the HR manager of the Beijing-based New Oriental Education Group, says that most of the recruitment is directly done by the company, save for some high-level management positions.

"Since we do not have the right connections, we have to ask for help from overseas headhunters.

"They (overseas headhunters) have a rich database and human capital resources. By going through them, we can save a lot of time and energy, and also be sure that the talent we procure is suited for our requirements," Zhang says.

International headhunting companies had very few Chinese clients when they first entered the Chinese market some 15 years ago, but in the past few years there has been a sea change, says James Darlington, head of Asia at Antal International, a global HR consultancy.

"When we first entered the Chinese market in 1998, 90 percent of our clients were multinational companies. But today more than half of our clients are local companies," he says.

Robert Parkinson, founder and CEO of RMG Selection, a Beijing-based recruitment consultancy, says that five years ago his company had hardly any Chinese companies as clients. But now they account for more than 20 percent of the clientele. The company plans to set up a new office in Tianjin this year to handle the workload from Chinese companies, he says.

Parkinson says the main reason why Chinese companies are looking for overseas talent is the fact that the economy is gradually changing. About 15 years ago, China was the manufacturing center of the world with the lowest prices, but now it has changed to a place where more value is added to products.

Moreover, with China emerging as one of the most dominant and resilient players in the global economy after recent financial troubles, and more Chinese companies striving to compete with multinational firms, the need for overseas talent has skyrocketed.

"If you look at what work the law firms do, you will find a lot of their work is not inbound, but outbound investment, to help Chinese companies expand overseas. That's a huge driver," Parkinson says.

There are large demands in two areas: one for the government-backed talent programs, which typically look for top-notch and academically qualified candidates in technology-based areas, says John Benson, CEO of Silu.com, a Chinese career site that focuses on connecting overseas professionals with Chinese companies.

The second is a more across-the-board demand for skillsets that the China talent pool cannot provide, such as professionals with experience in operating in Western cultures, especially from Chinese companies looking to expand abroad, he says.

When searching for high-level talent for Chinese companies, headhunters go through the same process as when they work for other international companies. But the situation varies from case to case, says Ed Zheng, senior client partner of Korn/Ferry International, a global executive search firm. More than 40 percent of its clients in China are local companies, with state-owned enterprises accounting for 50 percent of the total.

"The first thing that we do is to communicate with our client, so that we can understand not only what's on the job description, but also the company's business strategy, its growth target, structure and culture," Zheng says. "Our first job is to help the Chinese companies figure out their specific requirements for talent."

Following this, the company will start to look for candidates overseas. Zheng says that for high-level positions, candidates' personalities and leadership competence probably play an equal, if not bigger, part in their career successes compared with specialized skills.

"We often spend a lot of time in assessing the potential candidate's personalities. Usually in our recommendations about them to companies, only 40 percent are about the candidates' professional skills, while 60 percent is about their personalities and leadership competence," he says.

Approaching candidates is not an easy task, and it is important for headhunters to be aware of the true value of joining a Chinese company from the candidate perspective before doing so, Parkinson of RMG says.

"About 99 percent of candidates that we approach at first will be passive candidates who are not looking for changes or new experiences," Parkinson says.

"Therefore you cannot have people with one year's working experience calling someone with 25 years' experience to have a conversation on career development, as they cannot engage at the same level. Engaging with them is knowing them in a deep way."

When the candidates show interest, headhunters often arrange interviews, to see if there is something they would like to change about the current positions, and the contract-related aspects. After the candidates join the company, headhunters will help them with integrating in the first few months. In most of cases, the recruitment fees can be high and more than one third of the candidates' yearly salary, Parkinson says.

However, even after careful matching, retention of acquired talent is a challenge for many Chinese companies. More than half of the high-level talent leave their positions in Chinese companies after one year, largely due to cultural differences, Zheng says.

"Most of the Chinese companies consider talent as an acquired skill and not as acquiring a talent," he says. "Take a legal director in a Western company as an example. From a Western perspective what makes him tick, besides professional skills, are factors such as pets and hobbies. But in most Chinese companies, the only thing that matters is that he is an expert in legal issues."

Zheng says the good thing about the process is that the appropriate person can be found, and skills can readily applied.
"However, ignorance about a talent's cultural values, personalities and career aspirations will lose their loyalty. When a talent has been abstracted to a skill, and a higher-paid job has been offered, they will leave right away," he says.
Moreover, enterprise culture in Western companies and Chinese companies are quite different. In Western companies, employees' rights and obligations are set down in a contract and the boss is more likely to be open about it, whereas in Chinese companies, personal networks and relationships are more important, and the boss is more likely to give orders than to listen.

He adds that while retaining talent, money is usually not the prime motivator. Instead, it is more about people who have a real interest in the culture and history of China, and those who are ambitious and capable of seizing the available opportunities.

Claire Yang, managing director of the consultancy Accenture Greater China, and an expert on talent and organization performance, says overseas talent should accept that things operate in different ways in different cultures and be more positive in communicating with Chinese bosses and make changes.

Even though the number of companies using headhunters is increasing, it is still small compared with the whole market, Parkinson says.

"Chinese companies are less familiar with headhunting services. In Chinese culture, people pay more attention to their own network and relationships; they come to us only when people simply cannot be found by other channels," he says.

It will take another five or 10 years for Chinese people to start using headhunting companies for outsourcing professionals, he says.

Contact the writers at chenyingqun@chinadaily.com.cn and huhaiyan@chinadaily.com.cn

As a human resources manager, when is the last time you talked to the leader of your company's sales department?

Chong Ng, Greater China managing director of talent recruitment solutions provider FutureStep, is often disappointed with the answer he receives.

One of the techniques his company uses is to set up a one-day workshop and make sure all the client company's business leaders - all its China-based CEOs, board of directors and senior HR leaders - are in the workshop.

Ng then asks them about their business strategy for the year, and the talents they need to implement it. His team will make sure they work together to come up with strategy for the year ahead.

"You'll be surprised how often this does not happen (in their own boardroom)," Ng said.

"Most often, a sales manager picks up the phone, calls the HR manager and says, 'I want to fill the position immediately, or we want to find a sales manager immediately'."

FutureStep calls this a "reactive" recruitment approach, one that leads to employers failing in the increasingly competitive talent market.

"China's talent market, especially in the high end, is becoming more and more competitive," Ng said. "Employees now have a lot of options. They can work for big US multinationals, big European multinationals or big Chinese companies. How can your company stand out in the market?"

According to Ng, to be strategic, employers have to have a very good workforce plan. Every business plan - from opening a research and development center to increasing sales by 20 percent - should be followed by a workforce plan. As business plans change, the workforce plan should also be flexible and change accordingly.

Ng compared this process to marketing strategies used by consumer goods companies. You have to know your target candidates' genuine needs and try to fit your company's features to their appetites.

Generally, potential employees want to know the company's culture, salaries and development prospects. The HR department should give them this information, in addition to other information that may suit them, such as certain traits about the company that match prospective employee's interests and likes.

Be attractive

These days, large Chinese companies, especially State-owned enterprises, are increasingly popular among China's young job seekers. In its annual list of the 50 best employers in China, recruitment website Chinahr.com listed 18 foreign companies. Chinese companies, most of which were SOEs, took up the rest of the list.

So what can foreign companies do in China to improve their popularity?

Ng said foreign companies should clearly demonstrate their commitment to China. This commitment can be shown by opening research and development or product development centers in China.

"It shows that they are not coming to China just to sell their products. They are also developing their products for China and for the world," Ng said. "When candidates see this, they will feel reassured."

Ng said it is also important for foreign companies to create a stable leadership. In the past, some multinationals' China branches saw a leadership reshuffle every six to 12 months. The frequent changes give employees a sense of instability.

In addition, foreign employers have to make sure growth and development opportunities are available to their local employees, he said. This commitment can be shown by making leadership as diverse as possible to break the perception of "glass ceilings".

Most-wanted talents

Upon being asked about the most-wanted professionals in 2013, Ng said he would rather talk about function than specific industries.

"In fact, except for a few technical people, talent requirements are more or less the same across various sectors," he said.

"For example, all companies need salesmen. Actually, the need for sales managers is rising strongly in 2013."

As markets in first-tier cities are becoming mature and saturated, multinationals have a robust demand for salespeople with a full knowledge of markets in second- and third-tier cities.

In this regard, multinationals have to put in much more effort to fostering their employers' brands in these cities and identifying the talent pools there, because local companies have an advantage in finding local talents, Ng said.

And as the Chinese market is departing from its previous linear growth pattern, corporations operating in China need a new type of leadership, which Ng described as "a shift from operation-oriented toward growth-oriented".

"The good old days are gone. Now not only do you need to run a business, you need also to fight a business," Ng said. "This means leaders should run a factory, but also find business to keep the factory running."

However, Ng said one of the most common mistakes foreign companies make is they expect the local talents they hire to be productive in a very short time, but it does not work that way.

"A lot of multinationals have a mixed organization. You get one boss in Singapore and the other in New York. So you have to be able to work on a global basis. Decision-making there is very different from local companies, so it takes time for new hires to adjust to that environment," Ng said.

Foreign companies should also provide local talents with the resources to be productive, he added. "You can't just send a manager to the office in Beijing and say 'good luck', with no backing resources, no coaching and training."

Throughout the interview, Ng stressed that the qualified talent pool in China is "not very big". To get them, foreign companies should prepare for a fight.

"In 2013, the war for talent, once ferocious, will become more subtle and focused. Businesses will not hire the volume of talent they once did, but against the current economic backdrop and the drive for growth, they will be focused on hiring critical talent," Ng said.

Nearly 85 percent of Taiwan's middle and senior-level managers are considering changing jobs within the next 12 months, citing displeasure with their current salaries and company culture, according to a report released by specialist Asia recruitment firm MRIC yesterday.

The 2013 MRIC Talent Report surveyed 5,387 mid- to senior-level managers across a wide range of and locations, asking 3,820 in mainland China, 279 in Hong Kong, 460 in Singapore, and 379 in Taiwan. Eighty-ninety percent of those surveyed currently work in a foreign company.

“A much higher proportion of Taiwanese say that are dissatisfied (61.7 percent) compared to last year (51.6 percent) and to other (areas) surveyed,” said Patty Yang, General Manager for MRIC Taiwan.

Among those wanting to move to a new company, “increased compensation/commission” was cited as the chief motivation by the most people (42 percent), followed by “opportunity to increase responsibility/challenges” (32.1 percent), “clearer career path” and “company's leadership/strategic direction” (both 23.5 percent).

Among those willing to stay in their current jobs, “better work/life balance” was cited as the chief motivation by the most of those surveyed (42.3 percent), followed by “company's leadership/strategic direction” (32.7 percent) and “opportunity to increase responsibility/challenges” (26.9 percent).

Of professionals in Taiwan, one quarter placed importance on the culture of the company they are employed with, the highest proportion of all locations surveyed. Among all the dimensions of corporate culture dimension surveyed, “admired leadership” and “belief in fairness and promotion on merit” received the lowest ratings.

Social welfare issues have transfixed Taiwan's population recently. Its relevance is also shown in the 2013 MRIC Talent Report. Benefits hold particular prominence in Taiwan compared with Hong Kong or Singapore. Retirement benefits especially were found to be a key concern in Taiwan for 62.3 percent of the professionals surveyed, followed by health care (54.4 percent) and paid time off (47.4 percent).

While Taiwanese professionals have strong capabilities, they lack proficient English and communication skills compared with counterparts in Hong Kong and Singapore, said Yang, and the quality of “humbleness” demonstrated by Taiwanese professionals — although deemed a positive character in Chinese culture — is often not a valued trait in the competitive job market.

Taiwanese professionals' pay is “far too reasonable,” Yang said, adding that “they just need to polish their English skills and improve their ability to better express themselves.”

For those with five to 10 years of experience in management-level positions, Taiwanese managers are usually paid 20-30 percent lower less than their counterparts in Hong Kong and Singapore, according to Yang.

Taiwanese workers are usually willing to move overseas for a 5-10 percent increase in compensation, she continued. Offices in Hong Kong and Singapore are considered “regional headquarters,” and managers there are often charged with more responsibilities, which contribute to their higher compensation.

Almost overnight, China has become the world's second largest online retail (e-tail) market; revenue estimates for 2012 run as high as $210 billion with a compound annual growth rate of 120 percent since 2003.

At the same time, the compound annual growth in Brazil was 34 percent, and in the United States, 17 percent. These statistics are among the key findings of "China's e-tail Revolution: Online Shopping as a Catalyst for Growth", a new report by the McKinsey Global Institute.

China's retail sector already is among the most wired anywhere. Online sales accounted for about 5 to 6 percent of the country's total retail sales in 2012, compared with 5 percent in the United States. In fact, by the year 2020, it "could potentially lift China's private consumption by an additional 4 to 7 percent. Here's why: at 129 million (in 2011), China has the world's largest online population, surpassing the US's 81 million by a remarkable 59.3 percent.

In point of fact, most (about 90 percent) of Chinese e-tailing happens on digital marketplaces, megasites similar to eBay or Amazon. "These megasites include PaiPai, Taobao, and Tmall, which in turn are owned by bigger e-commerce groups. "Moreover Chinese e-tailing is not just replacing traditional retail transactions, but it is also stimulating consumption that would not otherwise take place. That stimulus is "the lift" referred to in the previous paragraph.

Although still in the early stages of growth, China's e-tail ecosystem is already quite profitable, realizing margins of around 8 to 10 percent of earnings, before interest, taxes, and amortization---slightly higher than those of average physical retailers.

Contrasting what's happening in China is the online retail in the US, Europe, and Japan. There, the dominant model involves a more even combination of brick-and-mortar retailers (such as Best Buy, Carrefour, Darty, Dixons, and Wal-mart) and online merchants (such as Amazon and eBay), which run their own sites and handle the details of commerce.

With this kind of explosive growth, China's e-tail business is poised for continued exponential growth. The biggest challenge the megasites will face will be staffing. China is already having serious shortages of skilled personnel. US companies with the right products have an extraordinary marketing opportunity.

Old Yang, a 55-year-old security guard in a residential complex, has been counting the days until his next paycheck. Effective this month, the minimum wage in Shanghai rises to 1,620 yuan (US$261) a month from 1,450 yuan.

Like most low-wage workers in the city, Old Yang is finding it hard to cope with rising prices for groceries, medicine, transport and the other basic necessities of life.

Sitting in the gate room of a residential compound on Anguo Road in Hongkou District, a cigarette glowing in his left hand, Old Yang said “food, transportation, tuition, water, gas and power bills. You have to pay for everything with the minimum wage.”

Old Yang lost his job during the global financial crisis in 2008 and found work as a security guard through a government-sponsored re-employment program aimed at helping jobless people in their 40s and 50s.

“Many jobless people chose to stay at home after the crisis,” Old Yang said. “I chose not to because my family needs money and I want to get a pension after retirement.”

His wife works part-time to help defray the cost of a son in college.

On March 29, the Shanghai government increased the minimum monthly wage by 11.7 percent, or 170 yuan. The minimum payment for part-time employment was lifted to 14 yuan from 12.5 yuan an hour, according to the government notice that took effect on April 1.

Nationally, Shanghai has the highest minimum wage of all 13 provinces and major cities in China. Its most recent rate of increase, however, isn’t as high as in some provinces, such as Jiangxi Province, which showed the biggest increase this year at 41.4 percent, according to People’s Daily.

The minimum wage in Shanghai has more than quadrupled, from 352 yuan, in the last 15 years. By 2020, China aims to double the per-capita income of both urban and rural residents from 2010 levels and narrow the gap between the rich and poor, according to a report from the 18th National Congress of the Communist Party of China that ended last November.

“The minimum wage will also be doubled by that time,” said Jennifer Feng, a senior human resource analyst with 51job.com, a Nasdaq-listed headhunting firm. “But you have to remember we are talking about net income. Actual take-home pay may be less, when social insurance fees and other mandatory costs are included.”

In its Five-Year Plan for the period ending 2015, the State Council, China’s Cabinet, stipulates annual increases of at least 13 percent.

“I think the latest increase is a balanced result, which takes into account the rising cost of living and the payroll tolerance capacity of employers,” Feng said. The risk, she said, is that employers, especially in manufacturing, may lay off staff or recruit lower-paid workers to replace experienced ones in order to lower their operating costs.

There were a dozen security guards in Old Yang’s residential compound last December. Now, there are only six.

“Maybe our boss knew he couldn’t afford so many of us, anticipating that the minimum wage would rise, so he fired them earlier,” Old Yang said.

He said his employer tends to hire local people like him because their social insurance fees are paid for by the government and the neighborhood committee under the re-employment plan.

Still, migrant workers are also commonly hired as security guards and cleaners in Shanghai. One such colleague of Old Yang’s, surnamed Zheng, lives in the basement of a high-rise in the housing complex, along with his wife, who works as a cleaner. Zheng, a native from central China’s Henan Province, declined to give his full name.

Zheng said the accommodation is free and he doesn’t have to pay utilities.

“Rent can gobble up nearly half of the minimum wage in Shanghai,” Zheng said. “The city is really too expensive to live in.”

For employers, the picture is mixed. A rise in minimum wages tends to make higher-paid workers think they should get raises, too. Feng said as wages rise, many employers are caught in a bind. Amid slower economic growth, they are under pressure to make more money, and wages account for a big chunk of operating cost. She suggests the government help share the burden by reducing business taxes or by defraying part of the cost of hiring people.

Professionals in Shanghai overtook their peers in all other Chinese cities in terms of salary, according to the 2013 spring job market report released by Zhaopin.com.

The average salary of professionals in Shanghai reached 7,112 yuan ($1,133) a month, the highest among all the 24 surveyed cities.

Shenzhen ranked second with an average of 6,787 yuan per month. Beijing ranked third with a monthly average of 5,453 yuan.

In general, the industries that offer the highest salaries are energy, automobile and petrochemical.

The industry that offers the highest monthly salaries in Shanghai is the energy/mineral industry to with 9,711 yuan on average. The auto industry offers the second highest salaries in Shanghai with 9,644 yuan per month, and petrochemical is the third highest with 9,218 yuan.

The three industries that offer the highest salaries in Shenzhen are communications and finance with the average monthly salaries above 8,200 yuan.

In Beijing, communications tops the list with 7,633 yuan a month, while the property/construction/decoration industry is second with 7,095 yuan per month. Finance is third with an average of 6,950 yuan a month.

Kindergarten teacher is the favorite occupation of Shanghai women, according to the report from the East China Institute of Talent Science.

More than 35 percent of Shanghai females chose teacher as their preference when given an occupational choice, and most of them would like to work in kindergartens.

The Shanghai Morning Post listed the major reasons for the job's popularity, including the job's stability, economic security, and months of winter and summer vacation.

Shanghai needs at least 10,000 kindergarten teachers in the next three years, according to the Ministry of Education.

The new standards for kindergartens, drafted by the ministry, say that full-time kindergartens must be equipped with three teachers for each of its classes, while two teachers are needed for each half-day class.

Human resource and administrative positions followed kindergarten teacher as Shanghai women's second- and third-favorite occupations, with 17 percent of them choosng the former and 14 percent the latter.

With significantly less optimism in the Chinese economy, only 22.2 percent of respondents gave a definite "yes" to a MRIC survey in terms of the possibility of seeking a job change in 2013, while the figure was 33.2 percent a year ago.

Executive recruitment company MRIC said in its 2013 Talent Report released on Monday that Chinese mainland professionals are increasingly aware of life-quality issues. Given the longer distances needed to travel to work and days away from home, flexible time is the biggest driver behind the desire for greater work/life balance, which is particularly marked among women on the Chinese mainland.

And while junior professionals are still ambitious enough to seek personal development in the earlier years of their careers, most middle professionals, or 40.6 percent of respondents, said that jobs should meet flexible working needs.

Most top and senior professionals, or 39.9 percent of the respondents, said that fulfilling family obligations is the most important factor for them at present.

As a result, some employers in China have started to implement remote working policies such as working from home one day each week or have Friday afternoons off in return for longer working hours on other days.

MRIC recommended that employers consider implementing similar policies and practices in order to attract and retain women and younger professionals, who are not necessarily low performers but have different work/life balance needs.

The manufacturing sector in China grew faster pace in March 2013, indicating that Asia’s largest economy and the second largest in the world, is recovering modestly. The Purchasing Managers’ Index (PMI) was 50.9 last month, according to data from the National Bureau of Statistics and China Federation of Logistics and Purchasing released on April 1. The March PMI is the highest in 11 months an improvement from its 50.1 level in February.

A separate PMI released independently by HSBC Holdings Plc and Markit Economics rose to 51.6 in March from 50.4.

After adjusting for seasonal factors, the HSBC Purchasing Managers’ IndexTM (PMITM) – a composite indicator designed to provide a single figure snapshot of operating conditions in the manufacturing economy posted 51.6 in March, up from 50.4 in February, signalling a modest improvement. Operating conditions in the Chinese manufacturing sector have now improved for five consecutive months.

Production levels increased for the fifth month in a row in March. The rate of expansion accelerated from February to a solid pace, the second-fastest in two years. Behind the rise in output, total new orders rose solidly, and for the sixth month in a row. A number of respondents attributed growth to strengthened client demand. Meanwhile, new export orders also increased, albeit marginally, according to an HSBC press release.

Volumes of outstanding business declined for the second successive month in March. The rate of backlog depletion was broadly unchanged from February, and remained slight overall. Staffing levels, however, were relatively unchanged from the previous month.

Suppliers’ delivery times lengthened in March, following a slight improvement in February. That said, the rate at which vendor performance deteriorated was slight, with just over 6% of panellists recording longer lead times. A number of respondents linked the deterioration to increased orders placed at vendors.

Average input costs faced by manufacturers decreased, following a five-month period of inflation. However, the rate of reduction was marginal, with a number of respondents citing lower raw material costs. Output charges set by manufacturers also declined in March, and for the first time in since last November. The rate of discounting was modest, with approximately 10% of panellists lowering tariffs. A number of respondents attributed the fall to a combination of passing on lower input costs to clients and competitive market pressures.

Purchasing activity in the manufacturing sector rose for the sixth successive month. Growth quickened from February to a solid pace that was the third-strongest in two years. Meanwhile, stocks of purchases fell modestly for the second month in a row. Increased input buying and the depletion of stocks were both associated with increased production at plants.

Finally, inventories of finished goods increased for the first time in six months, albeit marginally. A number of respondents attributed the rise to increased production on the back of stronger client demand.

Burton Malkiel, author of the classic investment book A Random Walk Down Wall Street (W.W. Norton), long has been a proponent of investing in China.

“The transformation of China is the economic miracle of the twenty-first century,” Malkiel says in his 2008 book, From Wall Street to the Great Wall (W.W. Norton).

“The pace of growth is so rapid that it takes less than a year for China to build a new city equivalent to the size of Houston. China is now central to the world commerce; and even if its growth rate slows, it will be the largest economy in the world by the 2020s, as measured in terms of purchasing power.”

That’s a mighty strong statement from the Princeton University professor. There may be good reason for his love of China. Malkiel is chief investment officer for AlphaShares LLC, a Walnut Creek, Calif., investment firm dedicated to providing investors with strategies and products to participate in China’s fast-growing economy.

Nevertheless, don’t bet the ranch on Chinese stocks and bonds. The region is riddled with political foreign currency and market risks because Chinese stocks are thinly traded. In addition, there are concerns about accurate accounting statements from both private and government-run Chinese companies. An investment in China requires patience over the long term.

Lately, China’s growth has been weakening. Chinese stocks were down around 1 percent this year, but they lost 50 percent in 2008, according to Morningstar Inc., Chicago. If you had bought and held Chinese stocks over the past 15 years, your investment would have grown at a 7.3 percent annual rate.

“Chinese (stocks) had a rough two years,” says Morningstar analyst Pat Oey. “China is facing a new normal: weak external demand for exports and slowing infrastructure spending.”

Good time to buy?

“We find the growth of domestic consumption to be very compelling,” says Greg Walker, J.P. Morgan Private Bank global investment specialist in Palm Beach. “It’s very hard to buy Chinese (stocks) and not get exposure to the mature government-owned industries, like banks, energy companies and insurance companies.”

Plus, Walker says, “there are a number of markets and economies in the Asian Pacific rim that benefit from China’s growth.” Singapore, Taiwan, Korea and Malaysia, he says, provide opportunities. Walker expects better earnings growth of around 10 percent in China this year.

Malkiel, in his book, suggests how much to invest in Chinese investments.

He advises conservative investors to keep about 5 percent to 10 percent for their total holdings in Chinese investments. The more venturesome should have between 10 percent and 20 percent.

The best way to invest in China, Malkiel says, is through exchange-traded funds. Exchange-traded funds generally are low cost, although you’ll often pay a brokerage commission to trade them. You also can hedge your bets with short sales.

Malkiel, whose company licenses exchange-traded-fund indexes, has suggested that half of your Chinese stock holdings be invested in China company shares traded in Hong Kong or New York. The other half should be in China’s major trading partners, excluding the United States. About 10 percent of this half of your investments should be in commodities and gold — the favorite savings vehicle 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%).

Prospects for job seekers on the Chinese mainland are expected to remain favorable in the second quarter of this year, according to the Q2 2013 Manpower Employment Outlook Survey released on March 12.

Among the 4,023 interviewed employers, 21 percent expect to increase their staffing levels in the second quarter, while only 3 percent plan to decrease the number of employees. And 41 percent of Chinese employers plan to "wait and see," with no intentions to change hiring levels in the quarter ahead.

The Manpower Group research reveals Chinese employers expect to grow staffing levels in all six industry sectors and all nine regions. Opportunities for job seekers are expected to improve by modest margins for the second consecutive quarter and China's net employment outlook of more than 18 percent is 3 percentage points stronger on a quarterly basis and remains relatively stable year-on-year.

"China's recovery remains on track, but we're not seeing clear signs that the current growth is on solid footing. The momentum of the current labor market is partly driven by increased infrastructure construction," said Zhang Jinrong, managing director of Manpower Group China. "For instance, the Ministry of Railways will invest 650 billion yuan ($104.39 billion) in 2013."

"But we're also seeing other signals that sustainable growth is being aggressively pursued. For instance, many enterprises in the coastal regions continue to search for the skills they need, and many are moving their search inland for management-level talent and technicians," he said. "A moderate recovery brings opportunities for companies to develop business and renew their search for talent. Also, it is probably a good time for companies to recalibrate their human resource practices to cope with the disappearing demographic dividend."

For instance, companies should consider implementing improved training systems and explore ways to increase employees' working productivity to prolong the demographic dividend and drive long-term stable development, he said.

Globally, Manpower Group's hiring confidence index reveals that second-quarter hiring plans are strongest in Brazil, Taiwan, Turkey, India and Panama while those in Italy, Spain, Greece and the Netherlands are the weakest worldwide.

Within the Asia Pacific region, employers in Taiwan report the most aggressive hiring plans while those in Australia have the most cautious.

Since the economic reforms and opening-up policies, China's role in the world economy has been steadily on the rise. Even before the global crisis of 2008-2009, the mainland's contribution to global growth exceeded that of the United States or Europe.

In the coming years, China's economic dominance will continue to increase, assuming there is sustained internal cohesion and a peaceful international environment. However, the nature of this growth is shifting, and the pace of change may be significantly faster than anticipated.

China is moving closer to the Lewisian turning point. In 1954, Sir Arthur Lewis published a highly influential analysis on economic development with unlimited supplies of labour, which contributed to his Nobel Prize a quarter of a century later. It can be read as a story of the rise and decline of rapid growth. In East and Southeast Asia, all successful industrialisers have experienced it, in one way or another.

In the Lewis story, a "capitalist" sector (read: manufacturing) evolves by taking labour from a backward non-capitalist "subsistence" sector (read: agriculture). Initially, there seems to be "unlimited" supplies of labour from the subsistence economy, which allows the capitalist sector to expand without rising wages. Things change dramatically when the supply of surplus labour from the countryside tapers off and industrial wages begin to rise rapidly.

In China, the debates over the Lewisian turning point began in the early 2000s. The coastal export regions were experiencing migrant labour shortages, while there was anecdotal evidence of soaring migrant wages. Consequently, some observers concluded that the huge reserves of supply labour had been exhausted. After all, the growth of the working-age population was also slowing on the mainland.

At the time, I argued that what these observers saw in China was an evolving reality in some coastal regions, but the generalisations did not apply at the national level. Industrialisation had taken off in the first- and second-tier megacities of the coastal export regions. But it had barely begun in the lower-tiered cities, inland and the west.

When the reforms were initiated at the turn of the 1980s, the level of urbanisation was barely 20 per cent. When the Lewis debate began in China, it was in the low-30s. In most developed economies, the comparable figure is over 75 per cent. In other words, China still had huge reserves of "unlimited supplies of labour".

But things are changing. Today, more than half of China is considered urban. Since economic development is unbalanced on the mainland, however, different regions exhibit different realities.

If the focus is on the labour market developments at the aggregate level, the evidence is mixed. Wage developments do not signal the demise of surplus labour. On the other hand, employment, industrial relocation and policy shifts do reflect tightening labour-market conditions.

Most importantly, demographic realities are changing, driven by decades of modernisation policies, and the attendant declining fertility and ageing, which have been amplified by the one-child policy.

Until recently, the UN anticipated that the growth of the working-age (15-64) population would turn negative on the mainland around 2020, along with similar International Monetary Fund projections. However, the pace of change may be even faster. According to the National Bureau of Statistics, China's working-age population (15-59) registered a decline in 2012, decreasing by 3.5 million to 937 million.

The different population bases of these projections explain some of the differences. This is even clearer, if the focus is more narrowly on the young, as most industry employees are relatively young.

In 2010, the growth rate of the core 20-39 population in China shrank to zero. Furthermore, it is expected to decline faster than the overall working-age population until the early 2030s.

While these demographic facts cannot be ignored, they are not destiny, as evidenced by the recent debate and policy developments in China. During the government reshuffle, the task of the population development strategy and population policy was transferred to the National Development and Reform Commission. That allows the central government to assess the population policy from the standpoint of the overall economy.

Over time, Beijing could also take advantage of "pro-natalist" policies - for example, a one-time baby bonus, child benefit payments or tax reductions, paid maternity and paternity leave. It could also promote pro-growth policies, raise the retirement age, increase the share of the workforce and accelerate retraining.

Some observers have argued that rising migrant wages are a result of labour market segmentation - the household registration system, limited portability of benefits, rising rural reservation wages and so on. In that case, overcoming the limitations of such segmentation could support demographic evolution as well.

The huge size of China's population, coupled with a proactive central government, offer opportunities to revise the course of China's demographic future - given a successful transition from extensive growth to innovation-driven intensive growth. But with demographics, change takes time. As a result, policy interventions must be proactive and have a long-term perspective.

In the coming years, several advanced economies, including Japan and Germany, will face demographic decline. Their current growth and prosperity is not sustainable in the long term. It is based on the demise of the ageing rather than the birth of new life. In China, another growth path is still conceivable in the long-term - with proactive intervention.

Salary levels in China are likely to increase in 2013 as the nation expects stable growth in gross domestic product, recruitment consultancy Robert Walters Plc said.

Generally speaking, candidates moving jobs usually will get a 15 to 25 percent pay increase in the nation this year, said a survey released by the London-headquartered company.

Those who stay in their jobs are getting approximately 8 percent salary increases, which corresponds with the forecast for GDP. The World Bank estimated in January China's 2013 GDP growth could hit 8.4 percent.

With the economic environment challenging, salary increments for professionals who moved jobs were generally lower than previous years, said the survey.

Candidates typically received increases of 15 to 20 percent when changing roles in 2012, while the amount was between 15 to 30 percent in 2011. Strong performers could receive as much as a 40 percent increase in some cases, it added.

Financial sector

The banking and financial services industry was the most affected by the global economic recession. As these employers were keen to increase profitability and hire sales professionals, they were also required to minimize costs and, in some cases, were subject to headcount freezes, according to the survey.

"In the second half of last year, international financial institutions bolstered their control functions in response to several overseas banking scandals. Senior professionals with risk, compliance, credit risk approval and anti-money laundering expertise were highly sought after,” said Robert Walters.

A number of overseas financial firms delayed their expansion plans last year because of economic uncertainty. The demand for talent is set to bounce back this year as China's economy stabilizes, said Arthur Wang, managing director of Robert Walters China.

Multinational companies will be eager to recruit candidates with better knowledge of the Chinese market as banks start to explore markets beyond major financial centers such as Shanghai and Beijing.

"Candidates who could develop strong relationships with local clientele and possessed both overseas and local experience were particularly sought after and generally received average salary increases of 10 to 20 percent when moving jobs,” Wang said.

"Meanwhile, as Chinese financial institutions continue to increase their presence within the local market, we expect to see continued demand for local candidates with Mandarin skills.”

Speaking fluent Chinese will also help the candidates to seek jobs in other industries such as information technology.

The survey found that candidates were not only required to master IT systems made by industry giants such as SAP or Oracle: Bilingual proficiency in English and Mandarin will also be expected.

Retail and luxury

In cities such as Hong Kong where IT infrastructure and construction projects were implemented, demand for IT talent also jumped, said Robert Walters.

The industry with strongest talent demand was retail and luxury, boosted by the increasing purchasing power of Chinese citizens. It may grow by up to 20 percent year-on-year until 2015. Salaries in these sectors may jump 15 to 25 percent on a yearly basis, said Wang.

According to the Beijing-based World Luxury Association, Chinese people spent $830 million on luxury goods from Jan 20 to Feb 20 this year during the traditional festival shopping spree.

Although the growth of the Chinese luxury market slowed last year, the association expects that by the end of 2015 China will dominate the global luxury market with 60 percent of market share.

"The expansion of international luxury brands into second- and third-tier cities will boost demand in sales, human resources, training and in business development departments,” said Wang.

Luxury brands such as Gucci and Louis Vuitton have entered most capital cities at a provincial level.

Manufacturing

Companies in the manufacturing sector are also likely to recruit more staff in China to cement their presence in the world's second largest economy, the report showed.

"As the economy showed signs of recovery at the end of 2012 with improving manufacturing activity, multinational conglomerates are likely to continue to invest in China moving into 2013.”

Robert Walters expects this new trend will lead to new jobs becoming available, although organizations will remain cost-conscious and, as a result, will seek local candidates to fill positions vacated by expatriates.

Despite an uncertain economy and a challenging business climate, companies specializing in foreign-made consumer goods, auto parts, machinery and pharmaceuticals performed well throughout the year, Walters said.

Most recruitment activities throughout 2012 were largely replacement-focused as employers concentrated on reducing costs. Although most job seekers were primarily motivated by a better salary, career development is playing an increasingly important role among Chinese candidates, according to the survey.

China's coastal city Hangzhou plans to recruit a tourism image ambassador worldwide by paying 40,000 euros for one year work. The recruitment has been posted on well-known social networking services, including Twitter, Facebook, Pinterest and YouTube, reported the official website of the Hangzhou municipal government.

The "Modern Marco Polo -- Dr. Hangzhou" global recruitment campaign is looking for a tourism ambassador by providing Chinese culture lovers around the world with a chance to experience the best of Chinese tea, silk, sigillography (the art of Chinese chop and seal making), kung fu and traditional Chinese medicine while being remunerated to the tune of 40,000 euros plus a 15-day free trip to Hangzhou. The only work for "Dr. Hangzhou" is to share his or her experience in Hangzhou through the internet

Participants must complete an online training program and games about Hangzhou culture first and the top 20 will enter the next round. The government will select the winner from the 20 candidates.
The unique competition procedures and the high payment are attractive for young people, and recruitment through modern media will help raise Hangzhou's image and competitiveness, said Li Hong, head of the Hangzhou Tourism Commission.

In 2009, Australia's Queensland tourism authority started a recruitment campaign of caretaker of the Islands of the Great Barrier Reef. The "dream job" attracted 35,000 applicants and adventurer Ben Southall from Britain finally won the job. He worked only three hours a week and enjoyed a salary package of 150,000 US dollars for the six-month contract.

The recruitment triggered hot debate among netizens. Some think the competition is interesting and the work is attractive. Some criticized the extremely high salary as a waste of money and said the government should spend money in more urgent issues.

China’s corporate job market has never been so attractive and yet so competitive.

Boosted by steady economic growth in the country and across the region, many multinational companies are starting or dramatically increasing their operations here. Despite health concerns arising from pollution and food safety issues, foreign nationals are still transferring into China. Meanwhile, better education and international company exposure have also made the local workforce much more competitive. This perfect storm now poses a tough question to job seekers in 2013: how do you stand out among this fierce international competition?

To those based outside China, this could be quite a surprising read. It is common knowledge that there are plenty of jobs across many industries in China. However, recent graduates might be shocked to learn that companies just aren’t interesting in education anymore: they are looking for real practical experiences. Below are some factors working against different types of job-hunters:

-- The number of Chinese graduates with rich internship experiences is traditionally low compared to the West. Multinationals also find many local graduates not “international” enough for them, or their language and communication skills not up to standard.

-- On the other hand, the sheer volume of Chinese graduates returning home with shiny diplomas from prestigious foreign universities has unfortunately diluted the value of, even created a slight distrust in, such degrees. State media have reported that nearly half of all Chinese returnees earn no higher than 5,000 yuan (HK$6,000) a month.

-- Finally, foreigners job-hunting in China can be considered expensive and potentially unstable, merely looking for another two to three years of employment in China while maintaining their expat benefits. Companies are also looking to reduce the number of foreign senior managers and replace them with local professionals to localise their business, so the smaller number of roles open with this expat capacity is fiercely contested.

Recruitment companies themselves are actually an excellent barometer for the local recruitment market. These companies, such as Antal International where I work, tend to focus on hiring their own staff based around their clients’ needs. If we are to work with a client, it makes sense that the consultants would be familiar with that industry and company style. At the moment, we will hire local professionals with international experience, good English-language skills and with strong technical understanding of an industry. This is because the majority of positions clients ask us to assist with require those skills too.

When a job market is aggressive and competitive like China, it is more important to stand out from the crowd. Here are some ways job seekers can ensure that:

For a recent graduate, the best way to get into the largest firms is via internships. They offer very little risk to a company, and a young professional can get to know an industry by actively participating in company projects. Even if that training does not result in a full-time employment opportunity, other companies will be more impressed for future opportunities. Also the level of risk is diminished for companies with someone who has working experience.

For the more seasoned professional, it is incredibly important to research the market, to check – for example, on websites like LinkedIn or Zhaopin.com – which job titles are in demand in the industry, and what are the requirements of a job description. Gone are the days when a sales manager of a competitor company could simply walk into another role in the same industry and be hired.

As the market matures, more strategy and more prudence are required. Look at today’s job interviews – they are much longer and stricter than a few years back. A candidate has to stand out by using previous experiences of management, difficult situation resolution and tenure to look like a valuable addition to a team.

In short, China is not the pot of gold at the end of the rainbow. Competition is rife, but for a well prepared professional with patience, it is still the place to be for opportunity and excitement.

“China has slowed down its economic growth, but the employment goal has not been downgraded, which shows the Party and government’s determination to guarantee and improve people’s livelihood”, said Mo Rong, the director of Institute of International Labor and Social Security under Ministry of Human Resources and Social Security (MHRSS).

Mo said that thanks to the country’s positive employment policy, the employment target has been over fulfilled in the past few years. New records of employment rate were set Last year. But it does not mean that the employment plan in 2013 will be easily completed. Mo added that compared with the past five years, it is more difficult to achieve the employment goal in 2013 because the employment trend has changed this year.

Employment issue is the derivative demand of economy development. The increase rate of gross domestic product (GDP) decreased to 7.8 percent in 2012, and the increase rate of investment slumped last year.

Mo said the impact of investment decrease from last year will emerge this year. The government report in 2013 targets GDP increase rate of 7.5 percent extending last year’s situation, which will generate negative effects to increase new jobs by expanding scale of production. In addition to that, the complicated international economy situation and foreign trade pressure are adverse for the realization of the employment goal.

The government work report has presented some new methods to promote employment goals:

First, increase new jobs by stabilizing economy growth and adjusting economic structure. With a better performance of enterprises, stable economic growth and extended production scale, more jobs will be created. Meanwhile, structure adjustment will also increase working posts.
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Second, improve employability and entrepreneurial capabilities and encourage people to start businesses to motivate employment.

Third, promote the steady growth of urban and rural residents’income to fuel economic growth by strengthening consumption ability.

The Chinese Apple manufacturer is finding it hard to find enough staff.

New reports suggest that Foxconn, the Chinese tech manufacturer that's perhaps the most famous member of Apple's Eastern supply chain, is having a tough time finding enough workers for its many plants. Now Foxconn is opening plants deeper in China in an effort to find more staff. Despite the widely publicized plan to implement a million robots on its production line, it now seems that Foxconn's expansion plans are placing it in a tricky recruitment position. The company has doubled its workforce over the last two years to over 1.2 million souls, and has been said to be planning expansion into the U.S., and recently revealed it has big plans to expand into Taiwan.

Recently a report that Foxconn had temporarily frozen hiring, allegedly due to weak iPhone sales, hit Apple's share price. Since then it's been argued that Foxconn, a firm that has a very dynamic recruitment cycle, was merely reacting to a glut of employees returning to work after the Chinese New Year.

The employment rate of Chinese secondary vocational school graduates maintained above 95 percent in the five years between 2007 to 2011, according to a report released Wednesday.

The report, issued by the Chinese Society of Vocational and Technical Education, said about 30 million students graduated from vocational schools during the period, with half of them working in the tertiary industry.

Over half of the graduates earn a starting salary of 1,500 yuan (about 241 U.S. dollars) or more, according to the report, which was jointly compiled by experts from vocational schools, research institutes and the media.

The rate of self-employed graduates kept rising in the five years, it said. In 2007, 11.01 percent of secondary vocational school graduates chose to open their own businesses. It was 13.36 percent in 2011.

Rural students accounted for 82 percent of the 22 million students in vocational schools in 2012. Among them, 45.7 percent come from households earning an annual income of 3,000 yuan or less, the report said.

According to Wang Jiping, the report's chief editor, China now has more than 13,000 vocational schools. More than 90 percent of vocational school students are subsidized by the state.

JINAN - Migrant workers who used to demand unpaid wages from their bosses before traveling home for a family reunion may find their positions reversed after the Spring Festival.

After the week-long national holiday, Wang Jiwan, board chairman of Qingdao Hengda Co., a shoe manufacturer based in eastern China's Shandong Province lined up with 50 senior executives at the factory gate, bowing to welcome returning workers.

It may seem odd, but he is not alone. Many companies are trying every trick in the book to attract workers and make them feel wanted. Some distributed cash ranging from 200 yuan (31.85 U.S. dollars) to 500 yuan to parents of employees who promised to come back after the holiday. Others offered a 15-percent pay rise in the new year.

Due to a lack of fixed employment contracts and rising living costs, each year after the Spring Festival, a traditional family holiday, it is common that migrant workers default on their jobs to settle back down again in their hometowns.

Labor shortage, a concern that has long plagued Chinese business owners, is an old problem and as the economy picks it will only get worse.

This year, manufacturers are suffering from shortages. However, it is not due to staff leaving but the warming economy, which has meant more orders on the books.

Labor shortages become particularly acute after the Spring Festival. However, this year is somewhat different, said Wan Zhong, manager of Wanjiashengshi, a human resource company based in Jinan, Shandong Province.

Enterprises have not lost a significant number of staff. Instead, they need more employees to fulfill rising orders, according to Wan.

"The 40 companies that had outsourced a recruitment process to us reported a lower staff turnover compared with previous years. They want more workers simply because the economy has survived the crisis and they would like to expand production," he said.

China's economic growth quickened to 7.9 percent in the final three months of 2012 after hitting a three-year low in the third quarter, according to data from the National Bureau of Statistics.

Official data also showed that the purchasing managers' index (PMI) for China's manufacturing sector has been kept above 50 percent for four straight months since October. The January figure fell slightly by 0.2 percentage point from December to 50.4 percent.

A PMI reading above 50 percent indicates expansion, while a reading below 50 percent indicates contraction.

Manufacturing is regaining momentum, boosted by domestic and global recoveries, said Zhang Weiguo, an economic expert with the Shandong Academy of Social Sciences. He forecast that manufacturers will do much better than last year.

"This year the company has plenty of orders. Workers can soon start work once they are in place," Wang Jiwan said, adding that Hengda, which ships 40 percent of products overseas, will see sales up about 30 percent in 2013 as international demand rebounds.

Meanwhile, Shandong Haosheng Group, a home textile manufacturer, is short of about 500 workers due to increasing orders from the domestic market.

The company has seized orders from seven upstream firms in Jiangsu and Zhejiang provinces after the Spring Festival, according to the company's human resource manager, Sun Luguang.

Most employers will scale up hiring in the first quarter this year, especially the post-Spring Festival period, as the economy rebounded in last quarter, said Feng Lijuan, a human resource expert with 51job.com, China's leading online job-hunting service provider.

Labor-intensive industries including real estate, automobile parts manufacturing and pharmaceutical companies posted a high number of recruitment requests, according to a survey conducted by 51job.com.

Meanwhile, experts said China's economy will pick up steam this year. A report compiled by Xiamen University forecast that the country's economic growth will rise by 0.43 percentage points from last year to reach 8.23 percent in 2013.

More than one third of Chinese businesses are struggling to recruit skilled workers, posing a major challenge for their growth prospects, a report by international accounting firm Grant Thornton said on Wednesday.

Almost 50 per cent of enterprises from industries such as technology have reported difficulties in hiring skilled workers, the report said.

The survey suggests a lack of general work skills and specific technical skills is the key factor making recruitment difficult.

"In such circumstances, job seekers should improve their general workplace skills in areas such as teamwork and communication and their specific technical skills in order to stand out in the fierce competition for employment," said Xu Hua, CEO of Grant Thornton China.

The Grant Thornton International Business Report revealed that 61 per cent of businesses in China cite shortage of general work skills as the primary problem in recruitment and 55 per cent of them cite a shortage of technical skills as the major concern.

Over half of both traditional industries - construction, food and beverage and healthcare - and emerging industries such as technology and business services, said that both factors hinder recruitment.

"The dilemma and difficulties in both obtaining employment and recruiting workers are still prominent," said Xu. On one hand, the labour market is saturated and the employment situation is still severe for graduates, and on the other hand, businesses find it difficult to recruit qualified labour.

"In the long term, businesses need to improve their own training programs which will be able to help staff's growth and deliver talent in a sustainable manner, rather than pinning their hopes on recruiting skilled workers from the talent market," he added.

Businesses are also worried about the upcoming "job-hopping" season. According to research, besides increasing the workload for the remaining staff, 32 per cent of businesses said losing staff also results in loss of business orders and increases operating costs.

Hospitality enterprises are more worried than other businesses that a loss of staff may result in a fall in customer service standards, with 37 per cent citing this as a concern.

And 25 per cent of businesses in technology said staff losses will delay the development of new products or services, more than any other industry.

"A business is nothing without its people. A great team with an average plan will be far more successful than an average team with a great plan. With the upcoming job-hopping season, businesses need to do more communication work with its staff, and build up their talent pool at the same time," Xu added.

Contact the writer at huyuanyuan@chinadaily.com.cn

More than one-third of Chinese companies are struggling to recruit skilled workers, posing a major challenge for their business-growth prospects, a report by international accounting firm Grant Thornton said on Wednesday.

Almost half of the companies from sectors such as technology and clean-tech reported difficulties in hiring skilled workers, the report said.

The Grant Thornton International Business Report revealed that 61 percent of companies in China cited a shortage of general employability skills as the main problem, while 55 percent said that a shortage of technical skills is the major concern.

Over half of both traditional industries — construction, food & beverage and healthcare — and emerging industries — technology, clean-tech and business services — believe that those two factors are hindering the recruitment process.

Xu Hua, CEO of Grant Thornton Jingdu Tianhua, said that job seekers have a hard time obtaining employment, while companies also have difficulties during the recruitment process.

On one hand, the labor market is saturated and the employment situation is difficult for graduates, but on the other, businesses find it difficult to recruit qualified employees, the report said.

"In the long term, businesses need to improve their training programs, which will be able to help with the development of their employees and deliver talent in a sustainable way, rather than pinning their hopes on recruiting skilled workers from the talent market," Xu added.

Businesses are also worried about the upcoming job-hopping season to a certain extent.

According to the research, besides increasing the workload for the remaining staff, 32 percent of businesses cite loss of orders as the main problem that staff retention issues have caused, while 32 percent think that increasing operating costs is the most important issue.

Compared with other industries, hospitality businesses are more concerned about the fall in customer service standards. And 25 percent of businesses in the technology sector consider that turnover will delay the development of new products and services, a higher percentage than any other industries.

China created 12.7 million new jobs in urban areas in 2012, the Ministry of Human Resources and Social Security, said on Friday.

The increase from 2011's 12.2 million new urban jobs left China's urban jobless rate steady at 4.1 percent at the end of 2012 - the 10th straight quarter officials say it has been at that level.

The urban jobless rate is China's only official unemployment indicator, but analysts say it grossly underestimates the true level of unemployment because it excludes about 250 million migrant workers from its surveys.

The National Bureau of Statistics said last week that China had created 11.9 million jobs in 2012 in urban areas. The differing numbers highlight the discrepancies in China's employment data which feed analysts' doubts.

Economists at Nomura in Hong Kong said other data signalled that China's labour market had tightened in the fourth quarter of 2012, with an index of the ratio of urban labour demand to supply rising to 1.08 from 1.05 in Q3 - its highest since the index was first published in 2002.

A group of about 20 migrant workers from Dalian in China's northeastern Liaoning province were demonstrating outside the labour ministry on Friday as the jobless data was presented at a news conference, demanding the ministry help them collect unpaid wages after completing work on a construction project.

China's migrant workers are the backbone of the country's labour force, working mainly in low paid jobs on construction sites and in factories.

Beijing has mandated that minimum wages rise at least 13 percent a year during the course of the current five-year plan that runs to 2015.

The same plan mandates annual increases in urban and rural household incomes of more than 7 percent, which would result in them doubling over 10 years.

The labour ministry said on Friday that 25 of China's 32 provinces raised minimum wages at an average of 20.2 percent in 2012.

In 2011, 24 provinces increased minimum wages by an average of 22 percent. In 2010, 30 provinces delivered increases of an average of 22.8 percent.

The most recent data available shows minimum wages in 2011 ranged from 1,500 yuan (152.79 pounds) per month in Shenzhen, the highest, to 870 yuan in Chongqing, the lowest.

The disparity of incomes has become a politically sensitive issue in China over the last decade as the gap between rich and poor has widened into a chasm.

About 13 percent of China's 1.3 billion people still live on less than $1.25 (79 pence) per day according to the United Nations Development Programme and average urban disposable income is just 21,810 yuan a year.

Meanwhile China has 2.7 million U.S. dollar millionaires and 251 billionaires, according to the Hurun Report.

As the Spring Festival is coming to an end, graduate students may find it harder to get a desirable job than usual, as a recent survey shows that only 29 percent of students with master's degrees have secured jobs, down from last year.

A survey conducted from December last year to January 2013 by My China Occupational Skills (MyCOS), a higher education consulting and outcome evaluation facility in China, found that only 29 percent of the graduate students surveyed have found jobs, seven percentage points lower than last year, Xinhua News Agency reported Wednesday.

The survey collected 10,940 valid questionnaires, of which 3,802 were from graduate students, 3,699 from undergraduates and 3,439 from graduates of vocational training schools.

According to the survey, 35 percent of postgraduates with an employment history have signed for a job, while 47 percent of fourth-year undergraduates with internship experience have signed, compared to the overall rate of 38 percent.

Another survey by MyCOS found that as of November 14, 2012, employment pressure on postgraduates has increased by three percentage points compared with the same period last year, while pressure for undergraduates has dropped by six percentage points.

"I've spent three years and tens of thousands of yuan getting a master's degree, but ended up with so much difficulty in finding a job... It feels like my graduate school years were a total waste," a graduate student, who wished to be called Li Yan, at the Central China Normal University was quoted by the Outlook Weekly as saying.

Chinese young people are seriously considering making a living online as the economic slowdown bites China's more conventional jobs market.

An Internet business boom has helped create more than 10 million jobs in China, which greatly alleviates current employment pressure, according to a new report by the Ministry of Human Resources and Social Security (MHRSS).

The report, the first of its kind by the ministry, showed that young people made up the majority of those involved in Internet entrepreneurship, including online shop owners and employees, as well as practitioners in areas closely related to e-commerce.

"The Internet goes beyond physical restrictions, so our power can be magnified to an enormous scale," Li Xueling, founder and CEO of Chinese social platform company YY Inc. was quoted as saying by Tuesday's edition of the People's Daily.

Li, whose company made its NASDAQ debut in November 2012, said the Internet quickens the process of trial and error in entrepreneurship, citing the example of a college graduate who was made a millionaire by teaching others how to make PowerPoint files online.

Internet business also allows more freedom and diversity in employment choices, according to the MHRSS report.

In 2012, a record 6.8 million people graduated from universities in China. Yet a large number of graduates were unable to land a job due to a discrepancy between the workforce and the actual needs of the economy.

Some of the jobless new grads may have flowed to the more flexible online commerce.

The MHRSS report showed that almost half of Internet practitioners surveyed own an associate degree or bachelor's degree, and another 33.4 percent received education from middle schools or technical schools. People with strong backgrounds in marketing, management, technology and law are most needed, it said.

Many young entrepreneurs said online business helps lower costs and increase efficiency, and also offers opportunities to make friends and find fun.

Moreover, the flourishing of Internet economics makes consumers more confident and comfortable with buying online, especially amid a current crisis of confidence in the country's commercial activities, the report said.

Taobao.com, a leading Chinese online shopping platform, sees an average of 18 million transactions each day, representing millions of deals closed on mutual trust and the guarantee of contracts, according to the People's Daily.

To further boost employment through online business, more measures, including credit support and tax exemptions should be rolled out to help small start-ups stay sound financially, the MHRSS suggested in the report.

Authorities should also guide private funds to invest in Internet businesses with potential for growth, the ministry added.

"The Internet makes improbable things possible. That is the most inspiring thing of our time," Li said.

With the smell of fireworks hanging in the air, we are rushing headlong into the Lunar New Year holiday. Common sense tells us to put our feet up and spend time with the family, and begin the job search again with a new sense of urgency after the holiday. After all, hiring managers are winding down, human resource professionals are busy with annual pay reviews, promotions and the endless year-end reports.

However, a lot of evidence would suggest that this is currently the best time to be searching for a new job. Firstly, your competition (i.e. other job hunters) is probably thinking “I’ll wait”; this makes it the best time for you to step up your job search. Research shows that calling off your job search is very counter-productive; instead of waiting, now is the time to redouble your effort to find that ideal new job, and gain an advantage over your relaxed competitors.

The other factor is, recruitment budgets are still there and HR people are still coming to work every day, looking for candidates. There is a great deal of pressure on managers to have people in place before the Golden period begins.

“During this time of year, I get so many calls from managers telling me how urgent their vacancies are and how few CVs they are receiving. They push me very hard. Candidates who make themselves available for interview, who answer their phones, who return emails the same day have a huge advantage at this time of year,” a Shanghai-based colleague told me.

So what are some of the proactive things that you can do? For one thing, make sure that your online presence is up to date. Touch base with any recruiters and HR people who have connected with you through LinkedIn during the past year. Make sure your profile clearly details your experience and strengths. It’s a great time to get in touch with any companies you interviewed within the past year. Send an e-card wishing them a happy holiday and remind them that you are available; they might have a new opening in their organisation that you are unaware of. Thirdly attend as many of those holiday parties as you can. Every business chamber and networking organisation holds one at this time of year; get out there and press the flesh.

And whilst we are on the topic, let’s remind ourselves of the few key points when planning a career change:

* Be very clear about what you bring to the table. Start by writing down your key skills and accomplishments, and then build the case for hiring you around those.
* Make sure that you are applying for the right jobs. It is too easy to fire your CV off to a hundred online postings that mention one key word you are interested in, but this is a waste of your time. Be realistic, and only target organisations that you want to work for.
* Use your network to better target your ideal jobs. Use Linkedin to see how many of your connections work in the company you are applying to.

Once you have got the interview, it is really important to be able to convince people that you have what it takes to succeed. Employers are looking for good cultural fits; you have to show that you understand that. Be clear about your salary and your expectations. Any sign of an ‘errrr’ or an ‘ummm’ before answering raises doubts in the interviewers mind. Demonstrate your worth by providing clear examples of where and when you have exceeded expectations in a similar role.

Follow the steps above and you’ll beat the competition to your new job, even in the so-called slowest period of the year.

50 universities, colleges provide strong, reliable workforce for southwestern city

Ask Liu Jia which city he would choose if he had to re-launch his business, and his answer is unequivocal: "Chengdu, definitely Chengdu."

Liu is chief operating officer of Goodteam Studio, an APP development firm based in Chengdu, and he insists the southwest inland city is quite simply unequalled as a source of the kind of top talent he needs to remain competitive, not just in China, but globally.

Goodteam became top 10 on the Google Play store in terms of revenue in 2012, with more than 40 million downloads worldwide.

The young COO adds that even if one day he plans to open offices in other cities, its R&D team will still be based in Chengdu, because it harbors a pool of IT talent unavailable elsewhere.

As China's economy remains robust, cities across the country are thirsty for talent. Yet at the same time, they are being scorched by rising labor costs.

However, Chengdu's talent pool remains healthy, fed by more than 50 universities and colleges that provide around 150,000 graduates every year.

"Businesses here enjoy relatively low labor costs as well as low turnover rates," said Liu Jianing, head of the investment sales division of Chengdu Investment Promotion Commission.

He reckons that compared with coastal cities, labor costs and turnover rates in Chengdu are a quarter to a third lower.

"We have a comprehensive talent pool, from management to skilled workers," added Liu.

Chengdu's reputation for providing the very best talent has also grown outside of China.

ThoughtWorks, a global IT consultancy headquartered in Chicago, is a good example.

It has set up its software technology company in the city staffed by 50 recruits, 35 of whom are local IT graduates.

ThoughtWorks is well-known in the industry for intensive recruitment processes, with numerous rounds of interviews often spread over weeks.

"When we choose a city to start our business, the only thing we care about is whether there is enough talent," said Xiong Jie, ThoughtWorks' office director in Chengdu, who stresses that a lack of talent can be a real problem in the IT industry.

Xiong added that countries including Australia, the US and many in Europe are facing a lack of talented IT staff, but China is rich with potential stars in many cities including Chengdu.

According to the 2012 Chengdu Investment Guide, produced by Chengdu Information Office, there were 58,243 IT graduates in the city, meaning one in five graduates in the city is either a programmer or a software engineer.

"Companies like us are always in hot pursuit of programmers. That's why we come here," said Xiong, a 32-year-old from Chongqing, a municipality just an hour's train ride from Chengdu.

The city's 2012 investment guide claims that 233 of the Fortune 500 companies have a presence in Chengdu, including global giants such as Intel and IBM, which have set up research labs in cooperation with universities in Chengdu.

Companies have also built 180 training bases to better prepare their potential employees when they are still on campus, says the guide.

Besides holding onto its own local talent, the Chengdu government also goes to other big cities like Beijing and Shanghai to attract talented recruits for its IT industry, added Liu Jianing, head of Chengdu Investment Promotion Commission's investment sales division.

"Sichuan province used to be known as a great source of labor, but now we are seeing the opposite trend in some of our industries," said Liu.

"Low living costs, comfortable lifestyle and weather, low stress and large job opportunities are Chengdu's great advantages in attracting talents to come here to work."

The latest list of the 10 happiest Chinese cities, based on a survey conducted by Oriental Outlook magazine and the China Association of Mayors, released in December, had Chengdu and Hangzhou at the top of the list.

According to a human resource report released in 2011 by 51job, a Chinese online jobseeker website, the turnover rate of software engineers with three-year experience in Chengdu is 8 percent, in stark contrast with Beijing's 21 percent and Shenzhen's 20 percent.

While MyCOS's Fresh Graduates Employment Annual Report 2010 showed that Chengdu's retention rate of fresh graduates was 61 percent, against 28 percent for another major information technology and education hub, Wuhan.

"Low turnover rates are good for company development in the long run. Our workforce and the huge reserves of talent we have get high praise from employers," added Liu Jianing.

Qing Chuan is the manager of a drugs company, which produces sterile injection devices to American market, and he says Chengdu's dependable workforce is crucial for the business.

"Because of high living costs in big cities like Beijing and Shanghai, staff can move on quickly. The workforces there are not as stable as cities like Chengdu," he said.

Qing added that the talent pool is especially strong for engineers, a sector particularly targeted by universities in Chengdu.

Game APPs developer Liu Jia says he is proud of his Chengdu team, all of which are local to the city. As the city's APP developers continue to attract worldwide attention, Liu adds that he is getting regular enquiries from companies around the globe looking to send their staff to be trained by his company.

"Having a solid workforce means we can whole-heartedly devote ourselves to developing games.

"But in markets like Shanghai and Beijing, there are too many distractions and temptations."

Li Yu in Chengdu contributed to this story

Summary: Small and mid-sized e-retailers have started sacking people before the Chinese New Year amid pessimistic forecasts for the year, but despite Internet sales surging another 65 percent in 2012.

After one of the country's most prominent electronics retailers, Gome Electrical Appliance, last week announced that it would lay off 200 staff on its e-commerce platform Gome.com.cn, a number of other B2C (business-to-commerce) retailers in China have also followed suit.

With the Chinese New Year approaching, Qianpin, one of China's top 10 group-buying sites, confirmed in a First Financial Daily report that the company had fired around 200 employees in a new round of layoffs executed at the end of 2012, accounting for almost 40 percent of Qianpin's total headcount.

In 2011, the company announced that it had successfully attracted venture capital totaling 100 million yuan (US$16.1 million), touting "not-short-of-cash" as its recruitment gimmick.

Some of China's local clothing brands also closed their online stores on Taobao Mall (TMall), the country's largest B2C marketplace. Some companies hold negative views on the market outlook for 2013, and have laid off staff before the start of the year's peak recruitment season.

At the same time, larger players, including 360buy.com and Suning.com, launched aggressive promotions in 2012, which pushed up overall costs for these smaller-sized e-retailers in attracting consumers and affected sales. This led to attempts by these retailers to reduce staff costs in a bid to survive in the market, according to the First Financial Daily report.

However, a report released by 100EC.cn on January 29 showed that the size of the Chinese online retail market reached 1.3 trillion yuan (US$209 billion) in 2012, representing a year-on-year increase of 64.7 percent. This indicated that the overall e-retail market maintained a "fast pace of development" in China.

But sales promotion wars between large e-retailers also brought up several issues in the market. Consumers would only make purchases when there are huge discounts, which further squeezed the margins of smaller players in the market, according to analyst Wang Zhouping from the China e-Business Research Center. He anticipated that more small and mid-sized e-retailers will implement staff layoffs or close down in early-2013.

According to Antal China, the oil and gas sector is about to experience significant growth thanks to the growth of the Chinese economy. The company state that since 2011, the two China oil giants CNPC and Sinopec, have been pushing the wholesale prices down at a minimum, while increasing the prices of the retailed refined oil, thereby delivering high profits. However this year, at a time when the price difference between retailed and wholesaled oil has reached RMB 300/ton, foreign and private retail stations are facing a serious lack of oil source. For this reason some oil companies are now setting up their own depot – a move which has been recorded and supported by recruiting firm Antal China. In part, these new ventures ensure the companies retain enough oil reserve, but they also help companies to respond to price fluctuation which remain a clear feature of the Chinese market.

Antal have also perceived that deep-sea oil and gas field Exploration and Production (E&P) is becoming a greater focus in the region. However, this area of business requires higher quality of equipment, technology and talent. There are clearly new opportunities here for foreign companies who wish to supply this kind of technology to the region and alongside this there will be a higher demand for skilled personnel in deep sea development, project management, sales and application.

Antal have already been working in this area, recruiting for a foreign company who specialise in high-end sub-sea products. The company concerned set up a new office in Shenzhen in order to supply the deep-sea E&P development.

Although statistics are sketchy, the chasm between rich and poor seems to have widened in China.

Shanghai, China - This country's economic boom has lifted millions of its citizens out of poverty and led to predictions it will become the world's largest economic power by 2030. However, while China's GDP has increased, so has the gap between its wealthiest and poorest citizens, placing the country among the most unequal nations in the world, according to a study by a Chinese institute.

China's Gini coefficient, a widely accepted measure of income distribution, reached 0.61 in 2010, according to findings by the Survey and Research Centre for China Household Finance. A score of zero represents perfect equality while a score of one represents total inequality, with one individual possessing 100 percent of a country's income.

Inequality is starkly visible in large cities such as Shanghai, where Lamborghinis and Porsches are a regular sight outside expensive restaurants, while beggars sit on the pavement with plastic cups looking for change. In the shadow of looming skyscrapers lie cramped dormitories for migrant labourers who work on some of the world’s most expensive properties.

"There is a huge gap between rich people and ordinary people in China," said Yang Zhang Yi, a retired worker, as he was waiting for a subway train in Shanghai. "Maybe the government should pay more attention on ... how to tax the rich people and reduce the taxes for the poor people."

The Chinese government has not released official Gini coefficient figures since 2000, when they put the figure at 0.412. In 2012, the National Bureau of Statistics said it was "slightly higher than 0.412" in 2010, but didn't give an exact figure, reported Xinhua, the Chinese state news agency. In March, Bo Xilai, the now ousted former Communist Party secretary of Chongqing, said that the figure had exceeded 0.46.

The World Bank, in a report published in February, cited income inequality as one of the main challenges facing China. The report stated that "the sustained increase in income inequality places China at the high end of income inequality among Asian countries". The World Bank hasn't issued Gini coefficient figures for China since 2005, when it estimated it to be 0.425.

Chinese estimates of the country's Gini coefficient have varied considerably. For example, in September, the International Institute for Urban Development in Beijing calculated China's Gini coefficient to be 0.438 in 2010, much lower than the Survey and Research Centre's result. Professor Gan Li, the centre's director, said he could not explain the differing figures but added that their study, which surveyed 8,400 households, was the first to publicly release all its data.

In an interview with the Communist Party-owned Global Times newspaper, Zheng Xinye, a professor at Renmin University, said the real figure may be even higher than 0.61 - as it is difficult to survey the super-rich in China. He blamed the widening income gap on "restrictions that kept small and medium-sized companies from entering high-profit sectors, as well as by employment discrimination".

However, Professor Martin Whyte, a sociologist at Harvard University who has carried out research on attitudes towards inequality in China, said he found the figure of 0.61 hard to believe. "The best survey research on income gaps leads to the same conclusion that the figure [Gini coefficient] is rising but is nowhere near these sort of figures," he said.

Regional differences

Inequality may also have increased between the country's wealthy east coast, where the major cities of Shanghai and Beijing are located, and the rural interior. Earlier this year, the gap between urban and rural areas was highlighted with the news that students in an area of Hubei Province had to provide their own desks for school, in stark contrast with the air-conditioned schools in the country's largest cities. The gap between urban and rural incomes is about 26 percent higher than in 1997 and 68 percent higher than in 1985, according to a report by the Chinese Academy of Social Sciences.

More than half of China's workers now live in urban areas, as rural migrants move to cities for better employment options. According to official figures, there are now 252 million migrant workers, many of whom now live in the country's cities. They usually are not entitled to healthcare, a pension or free education for their children under China's household registration system or hukou, which divides citizens into urban and rural residents and allocates public services accordingly.

Whyte said one of the reasons for inequality in China is the divide between rural and urban Chinese. "Other countries don't have a system like the hukou and the caste-like system it produces," he said.

The Chinese authorities have made pledges to reduce the gap between rich and poor and to address corruption. In his opening address during the Communist Party Congress in November, President Hu Jintao made an ambitious target for 2020 to double per capita income from 2010 levels for both urban and rural dwellers. And in October, the State Council said it would draft a plan to reform the current income distribution system.

The level of income inequality is "largely because China has very little income transfer. The government used resources to build investment infrastructure," Gan said. "It is time for the Chinese government to change its spending priority from infrastructure to income transfer and social welfare programmes."

In an article for the Economic Observer, Sun Liping, a professor at Tsinghua University, reffered to research estimating that there were 180,000 protests, riots and other mass incidents in China in 2010. However, it is not known if any were directly related to income inequality, and Gan said he had found no evidence that the figure of 0.4 was a warning line for social unrest. But he added: "There is lots of research saying that it is not income inequality per se that affects social instability, it is unequal opportunities. If there [are] vastly unequal opportunities, people will feel unsatisfied."

He believes that while there is room to improve, there "is a lot of social infrastructure in China that still works ... It is getting worse but the situation is not at the tipping point".

Income inequality will be one of the main challenges facing the country's new leaders, who will formally take power in March. The wealth of China's elite is controversial, and has recently been the subject of several foreign media investigations.

In December, Bloomberg exposed the vast fortunes of the offspring of China’s founding fathers, while earlier last year it also published an investigation on the business interests of the extended family of Xi Jinping, the soon-to-be president of China. The New York Times also published an investigation into the wealth of the family of prime minister Wen Jiabao.

While income inequality is a major issue for Chinese citizens, commuters in Shanghai had confidence in the Chinese government's ability to solve the problem. "There is now a limitation of the top salary," said Sun Xue Hong "For the poor, the government is trying to increase their salary at the same time. So this way the gap can become smaller and smaller."

And one young professional who gave her name as Alice said that, while the chasm between rich and poor has grown, she believed "the new government will take measures to narrow this gap".

"I am not sure about all Chinese people," she said. "But I am more confident now and I get more confident that these problems can be sorted out."

China tops the list of countries that top UK head-hunters predict will demand more senior executives in 2011.

Furthermore, the InterExec report also revealed that emerging markets, China and Brazil, are both set to demand more senior executives than the USA this year. More below...

Top 5 markets that will be demanding more senior executives in 2011

1) China

2) United Kingdom

3) Hong Kong

4) Brazil

5) USA

Kit Scott-Brown, managing director of InterExec, commented: “It is perhaps not surprising that the Chinese and Brazilian senior executive markets are expected to seek more senior executives as the rate of growth in the past decade mirrors that of the industrial revolution. It is interesting to see that despite the recent economic downturn, our research indicates that the UK senior executive market maintains its position as one of the strongest in the world.”

Release date- 03012013 - Aon Hewitt, the global human resource solutions business of Aon plc (NYSE:AON), recently released the research findings of its 2012 China Human Capital Intelligence Report that comprises indicators of remuneration trends by industry sectors and the latest developments in human resources.

The research involves more than 10 key industries, including real estate, financial, pharmaceutical and medical equipment, high technology, automobile, consumer products, retail, chemical products, logistics and manufacturing, covering over 4,000 foreign-invested and leading local enterprises in Beijing, Shanghai, Guangzhou and Shenzhen, as well as major second and third-tier cities.

Both the national average salary increase and turnover rate show increase trends

Aon Hewitt's research showed increased trends in both the national average salary increase and turnover rate in China for 2012. The 2012 national average salary increase was 9.1 percent, which was closely mirrored by a high turnover of 18.9 percent. In the four first-tier cities, the average salary increase in the manufacturing sector was 10.1 percent in Guangzhou, 9.8 percent in Shanghai, 9.8 percent in Beijing and 8.9 percent in Shenzhen. Average salary increases for the non-manufacturing sector were 9.5 percent in Beijing, 9.3 percent in Shanghai, 9.1 percent in Guangzhou and 8.9 percent in Shenzhen. Both the average annual salary increase and turnover rate in second and third-tier cities were higher than the national average. Aon Hewitt's research showed the gap between the inland and the coastal areas, where most investments are concentrated, is gradually narrowing. Salaries for front-line workers, for example, who are the object of an intense war for talent, saw less than a 5 percent differential between the second and third-tier cities inland and the second-tier cities in coastal regions.

Aon Hewitt's China 2012 Human Capital Intelligence Report showed an overall salary increase of 7.9 percent for the real estate industry, slightly lower than in 2009 and 2010 when the new regulation was not yet in effect, Salary increases in this industry are expected to slow down in 2013. In 2012, the job category witnessing the greatest expansion was 'Sales and Business Development,' which has increased by up to 42 percent only in Shanghai. According to Aon Hewitt, this is mostly due to new strict regulations that push residential real estate companies to transform into commercial real estate businesses. It can be expected that the demand for this job title will remain high in 2013.

Talent availability in the second and third-tier cities tightened and human resources risk index rose sharply

Aon Hewitt's research shows that the conventional talent pool in second and third-tier cities has been rapidly diluted by the high level of salary increases and turnover rates, resulting in continuously increasing risk affecting human resources. In Chongqing and Nanjing, for example, the voluntary turnover rate in 2012 was 22.3 percent and 19.4 percent respectively (up from 9.6 percent and 7.3 percent respectively in 2006). Another key industrial city, Wuhan, is highly coveted by investors due to the availability of abundant educational resources. However, with the war for talent intensifying, the turnover rate has climbed from 9.4 percent in 2004 to 14.2 percent in 2012. According to Aon Hewitt, such a high turnover rate leads to high recruitment and training costs for employers and stagnation of the talent supply chain, bringing new labor and business issues to enterprises invested in Wuhan.

According to Peter Zhang, Global Partner and Vice President of Aon Hewitt Greater China, 'High salary levels pushed up by high cost of living in coastal cities result in the relocation of a large number of manufacturing Research & Development units to the inland, causing shortage of talent supply. On the basis of a constant pool of talents, the intense war for talents has directly led to a remuneration escalation and high turnover of employees. However, with the eventual saving in personnel costs and operations, it will be an irresistible trend to move to the inland for closer connection to various partners and integration with the supply chain. Likewise, in the process of moving to the inland, new considerations related to the local hiring of mid-level management positions (versus importing them from coastal cities) must be taken into account to keep the costs of salary and benefits under control.'

The high turnover rate impacts the sectors of domestic consumption
Aon Hewitt's research shows that industries of domestic consumption, such as the retail and fast-moving consumer goods sectors are impacted by the high turnover rate in China. Turnover rates in 2012 were 31 percent in retail, 26.6 percent in high-tech/manufacturing, 19.5 percent in fast moving consumer goods and 19.2 percent in the health care industry. High salary increases keep in direct proportion to high turnover rates, at 9.1 percent, 9.6 percent, 9.65 percent and 9.5 percent respectively.

Peter Zhang said, 'Remuneration is always the barometer of a sector. Our figures clearly demonstrate that these four industries are bearing the brunt of the evolution in the human resources market caused by the industrial expansion. According to Zhang:

In the retail sector, the change in sales channel and consumption habits forces major traditional retail businesses to try to expand online with an imminent demand for talent transformation.

The high-tech/manufacturing sector is also experiencing the pain of industrial upgrading. The development from low value-added OEM (Original Equipment Manufacturer) processing to the manufacturing of products with independent design patents has generated a battle for high-quality talent extending from the research and development of products to packaging design, to skilled front-line workers.

Fast moving consumer goods are particularly sensitive to the right pricing. With the soaring cost of raw materials, a greater importance needs to be place on employee productivity and on a strong understanding of the demand for talents in the market.

The health care sector is known as one of the hottest sectors in China. However, according to Aon Hewitt's 2012 survey results, this trend is stabilizing. After years of rapid growth, the health care industry is looking at re-evaluating its structure and sales strategy. With the injection of more domestic and foreign funds in this industry, and the dependence of sales channels in the second and third-tier cities, the upgrading of sales means and localization of product development are bound to bring a new round of competition for talents.'

The generation born in 1980s (Gen Y) constitutes the main force of the talent market, while the demand for employees remains diversified

Aon Hewitt's 2012 China Human Capital Intelligence Report found that the generation born in 1980s (or Generation Y), which has been known as the new force of the workplace for many years, has become the main age component in the current talent market. Compared with 2007, the proportion of employees born in the 1980s is growing at a rate of almost 40 percent. Currently, the average proportion in various sectors has exceeded 65 percent. In some industries and functions, such as production of the high-tech manufacturing sector, the proportion has reached up to 80 percent. The new generation born in 1990s also has grown to be another large group in the workplace. At management level, the diversified age structure of employees has also created new demands. Aon Hewitt believes selecting the correct means of communications and incentives to improve these groups' engagement and optimize their performance has become an important area of concern for management.

Peter Zhang concluded, 'As China's economy has entered the stage of medium-speed development, the impact on the industry is also reflected in the slowdown in sales. For example, the health care sector which has always maintained a high growth in sales has seen its sales rate decrease by 5 percentage points in 2012 compared to 2009. However, enterprises will never stop seeking maximal profits. In the short-term with continuous increase in personnel costs, the improvement in productivity has become the only way to realize sustainable development in enterprises.'

About Aon Hewitt

Aon Hewitt is the global leader in human resources solutions. The company partners with organizations to solve their most complex benefits, talent and related financial challenges, and improve business performance. Aon Hewitt designs, implements, communicates and administers a wide range of human capital, retirement, investment management, health care, compensation and talent management strategies. With more than 29,000 professionals in 90 countries, Aon Hewitt makes the world a better place to work for clients and their employees. For more information on Aon Hewitt, please visit www.aonhewitt.com/apac.

About Aon

Aon plc (NYSE:AON) is the leading global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services. Through its more than 62,000 colleagues worldwide, Aon unites to empower results for clients in over 120 countries via innovative and effective risk and people solutions and through industry-leading global resources and technical expertise. Aon has been named repeatedly as the world's best broker, best insurance intermediary, reinsurance intermediary, captives manager and best employee benefits consulting firm by multiple industry sources. Visit http://www.aon.com for more information on Aon and http://www.aon.com/manchesterunited to learn about Aon's global partnership and shirt sponsorship with Manchester United.

We all know there is plenty of information in the international and local press about how the economy and therefore the jobs market is slowing down. 2012 saw the lowest rate of GDP for some time and of course this will concern people. What we need to remember that a GDP of well over seven per cent is huge, and that over Q4 GDP rose again, so all of the signs are positive that growth will continue. Foreign direct investment in China is also expected to remain steady. As recruiters we are in a unique position to be in regular contact with the hiring departments within multinational and local business as well as being in contact with the local talent pool and this piece is based around the feedback from both sides.

China is a completely candidate driven market still and this will continue in 2013. What seems to be different is the company and candidate will value each other differently based on the previous few years in China, and this is where problems can occur. Candidates at the moment have lots of questions that need to be addressed before we get to the employers side of 2013. The Chinese workforce is still active in the employment market and is still one of the most active candidate markets in the world. By active I mean that the majority of employees out there will be interested in speaking to companies about their opportunities and are approaching companies and recruitment consultancies directly to see what is available for someone with their skillset and experience. The average recruiter in China will receive well over 100 applications a day from candidates directly or through mediums such as Zhaopin.com. Candidates are looking for exciting new challenges at all times and this will have a huge affect on the 2013 job market, as it has done towards the end of 2012.

Over the last six months there have been two main candidate observations during their interviews with companies. First of all, companies are taking longer in hiring decisions and secondly, companies are not offering the salary increases that are expected. There are other observations but these two are most prevalent and a lot of candidates say the same. Both of the above mentioned points are true, companies are taking longer to make decisions and companies aren’t offering the same salary increases as before as will be address later in the article. The fact that a lot of candidates are experiencing this adds to the impression that there is some looming financial crisis in China and that everyone should be panicking about their job security. Job seekers talk to each other regularly, candidates that are being headhunted let their friends know that they have been approached for a great new job, it is human nature. As these interview processes talk longer or the packages aren’t what candidates expect this information doesn’t just stay with them, it spreads around their circles, and then their friend’s circles like a virus. A virus spreading the self fulfilling prophecy of a crash in the jobs market in China which simply isn’t true. There will be changes in 2013 but change is good providing companies and candidates are well educated about the change.

Our job is to speak with hiring managers and HR professionals every day and the good news is that the vast majority of companies that actively engage with recruitment companies are expecting headcount growth in 2013. These companies range from multiple industry sectors, from Automotive to Luxury goods, from technical IT to Banking, from Retail to Construction. Certainly some of these industries are expecting lower growth than others, the construction industry is going to be relatively slow whereas the retail market, especially middle to high end luxury retail, is going to boom, but the common theme here is that all will be hiring, increasing headcount, and they all expect to have significant replacement recruitment to do as their employees move on to pastures new. As you can see it’s so far so positive for the job market, however there are snags. The points that candidates raised are valid, decisions take longer and the same increased salaries aren’t being offered and it is going to take some time with the two groups to come to agreement with that. Over the past few years the market has boomed in China, jobs outnumbered skilled employees and as candidates were originally underpaid their new companies were happy to give 30-50 per cent salary increases in order for a talented individual to move to them. The problem with that was that this war for talented individuals meant that professionals were moving again 9-12 months later for another 30-50 per cent increase and the cycle repeated itself again and again. It is not uncommon to see a CV with six different companies in an eight year career, the problem for candidates is that this is no longer acceptable to a rising number of companies.

When the boom in China took place, MNCs didn’t seem to care so much about backgrounds, providing someone could do the job required they would be hired and companies paid what was needed. Now that salaries are at an all time high in the Tier 1 cities and there is a very slight pinch in growth in China, MNCs and local companies alike are looking for their growth to come from increased performance from their people, in order for companies to get this increase they need to have time to train and develop them and this is where the two candidate points come into play. As we all know the standard job cycle globally runs in three stages, Year One – Learn your job, Year Two – Get good at your job and Year Three – Get bored.

The problem in China is that employees have been completing year one, then moving on to start the cycle again. As an employer you don’t really get much return on the investment of hiring until after year 1 has passed and it’s something that can no longer be tolerated. The reason why interview processes and hiring decisions are taking longer is because employers want to be sure that this candidate is right for their business, the candidate will stay and develop, and eventually add value to the organisation. Companies will intentionally delay interview procedures because they want to see that a candidate is truly interested in the role and the company, not the paycheck. This reasoning is true for the lower salary increases. Increases are still good compared on a global scale, an average of 17 per cent salary increase when moving job is fantastic, but nowhere near the same amount it was one year ago.

Companies will pay for the right people, and some large increases are still being offered, but not to candidates that have moved three times in the last four years as there is a huge risk in hiring someone that is likely to leave in nine months. The disruption to the team and the monetary cost of a bad hire is potentially devastating. Another point to mention here, though slightly off topic is Year Two. This is the stage that most job seekers in China have not been completing over the last few years, this means that a staggering number of candidates have the title of manager, or director, or senior partner etc without actually completing the required tasks to be proficient at the job. Extra rounds of interviews are being brought into a standard process in order to check this ability on a hands on level rather than theoretical and things like assessment centres are now becoming common place.

Moving to a linked topic to this, if, as an employer, you are offering less than the job market expects and are taking longer than normal to make your hires how do you attract people? The answer is in training and development. 51 per cent of candidates are more interested in in-house development than salary because of the experience over the last few years where this hasn’t been evident. Over the last six months the increase in demand for training and development specialist from HR departments has been huge across China and large amounts of vacancies at Manager or Director level insist on having someone who has experience in training and developing subordinates, some companies will actively get references from previous subordinates before extending an offer to a candidate.

In summary, 2013 will still be a great year for the job market, but job seekers and employers need to understand the market is changing and it wont be going back to the way it was which is not a bad thing.

While most Chinese college graduates were vying for posts in the civil service, four young men chose to build their "China dream" by starting a business, a source of encouragement for many of the country's netizens.

Tan Longchao, Ma Nan, Chen Zhe and Tang Ming opened a shop that sells native products at the end of 2011, after graduating from Beifang University of Nationalities in northwest China's Ningxia Hui autonomous region.

The sales volume of their store, "Dream Sweet", reached 1 million yuan ($160,000) last year. As a shop and a distributor they have signed contracts with more than 20 other companies, and become the general agent for nearby provinces.

The success story has led to wide discussions on the Internet.

During the college graduation and recruitment period, some young Chinese have been inspired to pursue their dreams.

This is in contrast to the news that up to 2,900 undergraduates and 29 postgraduates applied to be sanitation workers in Harbin, Northeast China's Heilongjiang province.

"After hearing about the Harbin story, I felt disappointed for the younger generation of our country. The four young men from Ningxia offer hope and I believe many youngsters will be inspired." said a netizen named "Xiaobudian".

On his blog, "Xiaodong" said, "I was hesitating about starting my own business but I know I will be halfway to success if I am brave enough to follow my dream."

Just like other college graduates, Tan and his business partners were expected, by family and friends, to become public servants, which could have ensured them a stable life.

"My family was confused and disagreed with me when I first wanted to start the business," said Tan, "they said I was wasting my time and tried to persuade me to apply for village official roles."

According to Tan, all four got permission from their families to continue the business by showing them the sales volume in the first month, 30,000 yuan ($4,827).

The partners invested all the money they earned last year to develop the business.

"Earning money and finding a stable job should not be seen as a symbol of growing up. For us, doing something that we are passionate about is the way to become more mature. We are satisfied that we didn't lose any money in the first year, and we have gained experience in marketing and running the business." Tan said.

According to Ma Nan, the sales target for this year is 3 million yuan ($483,000). "Whether our business is successful or not, we have learned something and grown up during the process. That was the original intention of starting the business." Ma said.

According to statistics, the number of civil servant applicants surpassed one million each year since 2009. The number is expected to top 1.56 million this year. Some web users expressed concern with this.

A netizen named "Lixiaoguan" wrote, "With so many young people giving up their dreams and potential, who will realize the 'China dream'?"

Liu Xiaocheng, a teacher from the school of journalism and communication of Lanzhou University said, "Starting a business is not the only way to realize a dream, but seeking a stable life is definitely not a favorable trend."

He added, "Increasing the fairness of the social welfare system and providing a more flexible policy of becoming a civil servant will be great encouragement for young people to pursue their own dreams."

I thought hiring good engineers would be easy when I launched my startup, Julu Mobile, in Shanghai in early 2011. After all, China produces 600,000 engineering graduates each year, and as a former Google product manager I thought knew how to attract them.

However, I soon learned that hiring the best and brightest would be a lot harder than I thought. In my Silicon Valley experience, the best engineers look for audacious challenges, because the bigger the challenge, the greater their chance to prove themselves and reap the correspondingly larger rewards. Joining a startup company early is an exciting opportunity and potential path to glory for them.

In China, I have found that a different mindset dominates. When I started recruiting talent for my new company, before candidates asked about our strategy, they asked how much money we had. They wanted to know what my plans were for IPO. One candidate told me that he expected "a seven-figure package" (in US dollars). While there was some interest in our plans for China's mobile market, their primary concerns were economic and reputational: how could I prove to them that they would become rich, and that our company would be famous? I don't blame them for being skeptical of my tiny start-up, but I was struck by how much more risk-averse my prospects were than those engineers I'd worked with in Silicon Valley. Over the next months, I began to understand why.

Chinese young professionals today were born after the reform period of Deng Xiaoping, and have spent their entire lives in an economy that has grown 8 to 12 percent annually. They have seen astonishing growth in wealth around them, and expect the same for themselves. They are the legacy of China's one child policy, sometimes referred to as the "six pocket" generation, since they grew up with two parents and four grandparents (six pockets of money) focused on their educational and career success. Blessed with nearly unlimited resources from their elders, those who have succeeded in school join top International and foreign companies where they can expect rapid promotion and income growth.

However, this unprecedented opportunity has also generated high expectations from the elders and potential spouses of this new professional class. In China's family-centered culture, older generations depend on their offspring to provide for a significant part of their retirement, placing a strong expectation on these young professionals to do well financially.

Then there is the challenge of finding a spouse and starting their own families. On the Friday before one of my key hires, with an impressive background from a top global technology company, was scheduled to start work, I got a nervous sounding call from him. He hesitantly explained that he would not be able to join as agreed — his girlfriend's mother had decided that my company was too risky a proposition, and that he should keep his "safe" job. I was shocked. Shocked that he would make a decision on this basis, and shocked that he thought it was a sufficient explanation to reverse his decision.

However, for a young man in China, having a steady income and accumulating assets like an apartment is often a prerequisite for marriage, and even for dating. China's population has developed a significant gender imbalance, with 119 boys for every 100 girls.. This means that women increasingly have their pick, and they tend to choose men who are stable and successful — those who already own an apartment. This cultural emphasis on stability is at odds with the mindset often needed in an entrepreneurial environment. Young women in China don't face pressure to own an apartment like the males, but they do face pressure to find an affluent spouse. (Unfortunately, in China as in so many other places, there's a dearth of women in the engineering fields, so I encountered few female candidates in my recruitment efforts.)

In spite of rising affluence, accumulating assets has become increasingly difficult, as China's economic growth has also resulted in the runaway growth of prices. In a country where owning an apartment is a symbol of success, the ratio of real estate price to annual income is among the highest in the world. For example, in Beijing the price of an apartment has tripled since 2005, averaging 27 times the average annual household income, five times the international average. Those who do buy apartments typically do so with the considerable help from their "six pocket" families, increasing the pressure for financial success.

Unfortunately for entrepreneurs like me, it is hard to show prospective employees examples of local companies that have created extraordinary wealth for their employees. Even successful Internet companies like Baidu, Tencent, and Alibaba are closely held and most of the gains from their IPOs went to the top managers. For smaller companies like mine, there is less of a track record of acquisitions that would make employees optimistic that they would see an exit for themselves.

To overcome these factors, I learned to pay a lot more attention to the personal and family dynamics of hiring. I spent more time explaining how employees would benefit financially if we succeeded. We offer generous housing fund benefits to help employees save for their down payments, and invite girlfriends and significant others to all company events. I have also found ways to target candidates who have more interest taking on technical challenges than making money.

China is full of talent, and as there are more entrepreneurial success stories for the employees of startup companies, I suspect it will be easier to attract the best.

Posts by Doug Raymond(Doug Raymond is the founder and former CEO of Julu Mobile, a mobile advertising technology company based in Shanghai.)

Salaries will grow 9.1% while turnover will remain high at 18.9% this year in China, according to a report released by Aon Corp, a London-based provider of risk management services and human capital consulting.

In the top four cities, Guangzhou will lead the way in manufacturing salary growth with 10.1%, followed by 9.8% in both Shanghai and Beijing and 8.9% in Shenzhen. Beijing's 9.5% will be the fastest when it comes to non-manufacturing salary growth, followed by 9.3% in Shanghai, 9.1% in Guangzhou and 8.9% in Shenzhen, the report says.

Salaries of manufacturing workers in second and third-tier cities are catching up with those in the top four cities, with the average difference narrowing to less than 5%. The report warns that employment risks are surging in smaller cities as local turnover keep running high. Turnover in Chongqing and Nanjing, two leading second-tier cities, is expected to be 22.3% and 19.4% respectively, well above 9.6% and 7.3% in 2006.

Spiraling living costs in coastal China have prompted plenty of manufacturers to move to the inland, causing regional labor shortages and higher salaries, according to Aon China vice president Zhang Hong.

In terms of industries, the highest turnovers are seen in retail (31%), hi-tech manufacturing (26.6%), fast moving consumer goods (19.5%) and healthcare (19.2%), which can expect faster salary growths of 9.1%, 9.6%, 9.7% and 9.5% respectively. The four industries are undergoing structural changes in the labor market, Zhang argues.

The Aon report is based on a survey of more than 4,000 firms across China engaged in the real estate, finance, healthcare, hi-tech, retail, chemical, logistics and manufacturing industries.

BEIJING - In the first 11 months of this year, 12.02 million new jobs were created in China, surpassing the goal of 9 million new jobs, the Ministry of Human Resources and Social Security (MHRSS) said Tuesday.

The urban registered unemployment rate stood at 4.1 percent at the end of September, below the annual target of 4.6 percent, said Minister Yin Weimin.

The employment situation has been better than expected this year amid the backdrop of slowing global economic recovery and downward pressures weighing on the domestic economy, Yin said while addressing a national human resources and social security work conference.

Zhou Tianyong, a professor with the Party School of the Central Committee of the Communist Party of China (CPC), said the double-digit economic growth in China's central and western regions has been a major engine for creating job opportunities.

In the first half of 2012, the newly increased employed population in cities located in the country's central and western regions expanded 9 percent and 14 percent, respectively, according to the ministry.

Meanwhile, massive layoffs have also been rare this year, as a continuous labor shortage left employers more prudent about staff cuts, Zhou added.

Yin also said at the Tuesday conference that in 2013, China will not let go of its goals to create at least 9 million new urban jobs and keep unemployment below 4.6 percent.

The focus of next year's work, according to Yin, will still be employment for college graduates, an expanding population that has hit 6.8 million this year.

China will carry out and improve policies in support of the employment and entrepreneurship of college graduates, expand their employment areas and introduce public recruitment services to campuses, Yin said.

During a recent two-day conference held to set the tone for next year's economic work, the central government pledged to give more attention to stabilizing and expanding employment, especially in terms of creating jobs for college graduates.

To boost employment, the government also vowed to support the development of small and micro enterprises and strengthen social responsibility among large enterprises at the conference held on December 15 and 16.

China's total urban population in search of employment reached 25 million in 2012, far exceeding the 12 million new jobs created annually in recent years, data show.

Analysts have pointed out that in addition to the pressure to create more jobs, there is a notable gap between the skills of the unemployed and the skills required for certain positions.

Most industries in China are currently facing a serious shortage of skilled workers. The manufacturing sector alone, according to the MHRSS, is in need of about 4 million senior technicians.

"China has to step up education for skilled workers and provide a large pool of talent with experience, superb skills and creativity," said Cai Jiming, director of Tsinghua University's Political Economy Research Center.

Conversely, public posts and positions with State-owned enterprises are enjoying increasing popularity. In late November, about 1.12 million candidates sat the National Public Servant Exam, which means one in every 53 candidates will get posts as public servants, on average.

In response to the trend of graduates flocking to public posts, Renmin University Professor Zheng Gongcheng said China has to narrow gaps between industries, between the rural and the urban, as well as those in incomes, benefits and social security in order to mobilize its talents.

"To fulfill the employment targets for 2013, China has to thoroughly implement a more proactive employment policy," said Yin.

Fewer people were satisfied with their quality of life in 2012 amid rising living costs and changing social values, according to a report compiled by the Chinese Academy of Social Sciences.

The report found 44.7 percent of people polled nationwide were satisfied in 2012, a decrease of 2.3 percentage points from the previous year.

Even among those who said they were satisfied with their lives, their satisfaction index decreased from 3.46 to 3.41 on a scale of zero to five points.

According to the report, 12.3 percent of those surveyed said they were dissatisfied.

The report, which was released on Monday, was based on data and surveys provided by the livelihood index research group under the National People's Congress and filed by researchers from the academy.

Wang Junxiu, a sociologist at the academy and leading author of the report, said price rises and growing employment pressures were some of the biggest factors contributing to the increasingly gloomy mood.

"The survey was conducted while prices were rising, and this definitely has a role to play in the decline in the satisfaction index," he said.

But he added that the decline was also related to psychological factors.

"If someone just had a pay raise, the satisfaction that accompanied it may disappear very quickly. But the inner demand for an improved quality of life is constantly on the rise," he said.

The decline in the satisfaction index was seen among people in a wide range of professions, ranging from those in leading positions at State-owned enterprises and government bodies to farmers and workers in the service sector.

The report also found higher levels of satisfaction among rural residents and residents in western regions of China. People who live in rented accommodations are generally less happy than those who own their own homes.

Another report conducted by researchers from the academy showed that people had a lower level of social trust than in previous years.

The study divided social trust into two categories: people's trust in society and their trust in personal connections.
The report, which examined the trust levels of residents of seven cities, found people had a very low level of trust in businesses, scoring 51.8 points out of 100.

It revealed that the catering, tourism, pharmaceutical and real estate sectors were among the least trusted.

The report also found a lower level of trust in interpersonal relationships. Only 20 to 30 percent of the respondents said that they would trust strangers, while distrust has also increased among different social groups.

"There is distrust between the authorities, police and residents, doctors and patients, and customers and businesspeople," the report said.

The study also found that trust in personal relationships increasingly outweighed trust in society among Chinese people.
"In modern society, people's trust in society generally outweighs trust in personal connections. However, in China, people seem to show more faith in their own personal connections," said Yang Yiyin, a social psychology researcher from the academy.

"The government now faces a difficult task in restoring that trust. It can only be restored through stronger punishment of dishonest behavior and the cultivation of civic awareness," she said.

Employment prospects are looking increasingly grim amongst many “post-80s and 90s” university graduates and students across the country according to a recent report by the Chinese Academy of Social Sciences.

The CASS Blue Book of China’s Society revealed that only 76 per cent of 2012 graduates had been able to find jobs, Caijing reported on Monday.

The CASS conducted a survey on 2,000 students and graduates from 12 colleges and universities across China.

When asked about their outlook on jobs, only 30 per cent of university students felt they would be able to find work successfully and most students said they lacked confidence in the job market.

Even among those who have found work, job satisfaction has been low, with about two-thirds of 2011 graduates claiming to have worked at least 1 to 2 different jobs since graduation. Job hopping has become commonplace, according to the report. Only 1.6 per cent of university graduates felt satisfied with their employment situation.

Analysts believe satisfaction among graduates is linked to home ownership and marriage, as those in this category reported higher levels of personal satisfaction.

Meanwhile, as out-of-reach property prices make homeownership increasingly difficult, more than 70 per cent of college students now feel they belong to the "lower" or "lower-middle" class demographic.

A dismal outlook on employment and life among post-80s and 90s youths tied in rather fittingly with an increase in sociopolitical awareness.

More than half of all those polled in the CASS survey said they were “interested in political affairs” and about two-thirds of university students and university graduates felt they “had the ability to participate in public affairs decision making”. A similar number felt they were “qualified to evaluate government actions".

Social security and private property also appear to be of high importance to Chinese youths. The survey showed 64 per cent of university students and 70 per cent of university graduates “strongly favouring” private property over state-owned property. The number of students and graduates who agreed that “sacrificing personal interests for state interests was outdated" was split evenly with those who disagreed.

According to the Ministry of Education, Chinese universities produced 6.8 million university graduates in 2012, all vying for work in an increasingly competitive job market.

Recent figures published by the Chinese Household Finance Survey also revealed a 16.4 per cent urban unemployment rate amongst youths aged 21 to 25.

Salaries will grow 9.1% while turnover will remain high at 18.9% this year in China, according to a report released by Aon Corp, a London-based provider of risk management services and human capital consulting.

In the top four cities, Guangzhou will lead the way in manufacturing salary growth with 10.1%, followed by 9.8% in both Shanghai and Beijing and 8.9% in Shenzhen. Beijing's 9.5% will be the fastest when it comes to non-manufacturing salary growth, followed by 9.3% in Shanghai, 9.1% in Guangzhou and 8.9% in Shenzhen, the report says.

Salaries of manufacturing workers in second and third-tier cities are catching up with those in the top four cities, with the average difference narrowing to less than 5%. The report warns that employment risks are surging in smaller cities as local turnover keep running high. Turnover in Chongqing and Nanjing, two leading second-tier cities, is expected to be 22.3% and 19.4% respectively, well above 9.6% and 7.3% in 2006.

Spiraling living costs in coastal China have prompted plenty of manufacturers to move to the inland, causing regional labor shortages and higher salaries, according to Aon China vice president Zhang Hong.

In terms of industries, the highest turnovers are seen in retail (31%), hi-tech manufacturing (26.6%), fast moving consumer goods (19.5%) and healthcare (19.2%), which can expect faster salary growths of 9.1%, 9.6%, 9.7% and 9.5% respectively. The four industries are undergoing structural changes in the labor market, Zhang argues.

The Aon report is based on a survey of more than 4,000 firms across China engaged in the real estate, finance, healthcare, hi-tech, retail, chemical, logistics and manufacturing industries.

BEIJING--A growing number of Chinese college students are joining the Communist Party of China, attracted by the preferential treatment given to party members in finding employment and gaining promotions.

“Young people are joining the party because they are having difficulties finding jobs,” said a 23-year-old female worker in Beijing. “Many students want to work at stable state-owned companies.”

The woman said she joined the party while she was a university student. She said she had an advantage because of her membership when she worked at a state-owned enterprise.

A 24-year-old female worker at a private company in Shanghai also joined the party during her college days.

She was concerned that party membership may work against her acquiring visas, but she eventually joined the party because she thought that membership would be proof of her abilities.

Some government offices and public institutions require job applicants to be party members.

According to a survey by a staffing agency, many companies also give priority to party members when recruiting.

China is said to be in an “ice age for employment,” where 1.5 million college students annually fail to find jobs after graduation. In such a harsh hiring climate, the preferential treatment associated with party membership has attracted an increasing number of students applying to become members.

According to Xinhua News Agency and other sources, the Communist Party accepted only 14 percent of applicants for membership in 2010. But members age 35 and under are increasing by more than 1 million each year, and they now account for a quarter of all memberships.

At the end of 2011, 82.6 million people were party members.

Bai Zhili, associate professor of personnel management at Peking University, conducted a survey with other researchers from 2008-2009 to investigate why people joined the Communist Party. The researchers received replies from 823 people.

The results showed that 51 percent of respondents age 50 and older cited that they support “the idea of communism” as a reason, compared with 21 percent of those in their 20s.

Respondents who replied that they joined for “self-realization” or achieving successful careers, accounted for 18 percent of people in their 20s, compared with only 5 percent of those age 50 and over.

“Young people are joining the Communist Party as if to get admission tickets to enter a competition for jobs,” said another faculty member at Peking University.

Mobile payment technology displayed at an international telecommunications exhibition in Shenzhen, Guangdong province. Innovation Works is focusing on the IT, software and mobile segments. Its founder Kai-Fu Lee said most mistakes are made in first 12 to 18 months in business.

If asked for three words to describe himself, Kai-Fu Lee, a high-profile information technology professional and former head of Google China, says they would be: "Make a difference".

He certainly lives up to the motto. The 51-year-old has made a difference in terms of not only his career development but also his devotion to, and influence on, young people in China.

Born in Taiwan in 1961, Lee was the youngest child in his family and was sent to the United States to be educated at the age of 12. After getting a PhD degree in computer science at Carnegie Mellon University in 1988, his career progressed smoothly through a series of globally leading IT companies.

New career

Lee worked at Apple Inc from 1990 to 1996, where he started as a research and development executive.

The talented individual then moved to Silicon Graphics Inc, a global high-performance computing solutions provider, and spent a year as a senior executive.

At Microsoft Corp, he founded the company's research facility in China, and helped Bill Gates deal with problems the company experienced in China. He also set up the Chinese business side for Google Inc, introducing the search engine to the nation.

However, after decades of success in leading multinational companies, Lee decided to start up his own business - Innovation Works - in 2009. It's a company that acts as an incubator for entrepreneurial young Chinese people with innovative business ideas to initiate startups.

According to Lee, when he was heading Google China, he saw a lot of people who worked for him leave and start their own companies with passion and determination. Some succeeded, some failed. Lee then decided he would like to use his experience and social network to give people - not just former Google employees - the backing to start new companies.

"I think I can. I believe the elements that made Google, Facebook and Apple become great companies can be - and will be - duplicated in China," said Lee.

What Innovation Works does is to find promising entrepreneurs early and provide them with all-round support, including recruiting people, product manufacturing, management, and financial and legal consultancy.

Lee's company usually helps young entrepreneurs in their first 12 to 18 months in business. "That's when most mistakes are made. That's when people have the chance to succeed. If you make one mistake, everything can fall apart," he said.

With initial funding of $500 million, Innovation Works focuses on the IT, software and mobile segments. It has made 50 investments over the past three years. The majority have so far survived and 18 of them have received a second round of funding averaging around $30 million. "But these companies still have a long way to go before they can go public," said Lee.

He added that of the hundreds of companies Innovation Works has invested in, so long as one becomes an Internet giant in 10 years, the investment return will be considerable.

Two years ago, Jiang Fan, a 25-year-old engineer, decided to leave Google and set up his own company - Umeng Co Ltd - to provide services for mobile Internet application developers. Jiang described his business plan to Lee and immediately received support.

"He had never done anything other than engineering. He is a great engineer but has no business experience, so we first had to mentor him to be a good manager," said Lee, adding that he felt Jiang has good business sense.

Just 28 months later, Jiang's company has grown from only one person - himself - to almost 100 people and become the leader in the niche market. The company received another round of funds of $10 million from venture capital firm Matrix Partners in 2011. Lee estimated that Umeng will be profitable by the end of this year.

"Without help from Lee, companies like us at the early stage may not survive and develop the business so well," Jiang said. "More importantly, Lee has made 'angel' investments more widely recognized in China. As a result more rich people and successful businessmen are joining in the trend."

Angel investors are wealthy people who help entrepreneurs they believe in to start businesses by funding them.

Xu Xiaoping, founder of the venture capital fund Zhen Fund and Lee's friend, said: "Lee feels a strong social responsibility to help both young Chinese people and companies to list in the US market."

Promising sectors

According to Lee, over the next five years, mobile Internet companies will come to prominence. "Today, you think of Baidu, Alibaba and Tencent as three giants. I predict that in five years there will be two or three other mobile Internet companies at the same level of power and value as these companies," said Lee.

He specifically cited entertainment such as music, video, gaming, social networking and e-reading as aspects of the market young people are mostly interested in and that are most promising.

The value of the Chinese mobile Internet market totaled 14.8 billion yuan ($2.38 billion) in the third quarter of 2012, up 102.1 percent year-on-year, data from iResearch Consulting Group shows.

Lee also said he is personally keeping a close eye on digital television, enterprises selling software to corporate clients and big data businesses.

Against short sellers

Chinese software company Qihoo 360 Technology Co Ltd in August initiated legal action against Citron Research and its main contributor Andrew Left for the short seller's "untruthful publications or statements regarding Qihoo 360", the New York-listed company said in a statement.

Citron is blamed for affecting the share prices of 21 New York-listed Chinese companies since 2006, with 16 companies seeing their prices drop more than 80 percent, and seven being forced to delist. Qihoo was among those that suffered a fall in the value of their shares. Lee said he has also filed a lawsuit against Citron for alleged defamation, which will be held in Beijing.

The spat came after Lee rounded up more than 60 top Chinese technology executives to defend US-listed Chinese companies from being hit by short sellers in a joint letter in September.

In one of the alleged mistakes in the piece of analysis that Lee pointed out, a Chinese search engine is described as using a new search method that is simply illogical and that does not exist.

Lee said the "intentional" behavior of Citron has had several dangerous outcomes, including misleading US investors, damaging their confidence in Chinese companies and causing Chinese companies' stock prices to fall when they are "completely innocent".

Furthermore, the Chinese companies that were listed in the US market may choose to turn private and relist in Hong Kong or elsewhere while those waiting to list may defer that move.

"So all these could end up with the result that US stock exchanges, which could be perfect stock exchanges, may no longer have Chinese stocks," Lee said, adding that he wanted to help US investors understand Citron and Muddy Waters, another short seller of stocks in Chinese companies, "are not to be trusted", that warning signals need to be sent to short sellers so they can "no longer fool people".

Lee said his action also gives the signal to Chinese companies that if a company is unfairly treated it should react immediately, especially by using the legal system to protect itself. Spending money for this purpose is worthwhile.

The most crucial thing is to have truthful and authentic financial data, said Lee. Chinese companies should have strong public relations with the media and attach importance to investor relations.

Citron has admitted some mistakes. "It's just a step and they might be more careful in the future because they know they are being watched by Chinese companies," said Lee. "Hopefully it could help Chinese companies regain the confidence to defend themselves."

In a clear sign of a slowing economy, many employers in China, including foreign-owned factories and state-owned enterprises, have been unable or unwilling to pay their employees for months. Strikes and protests by workers have erupted to demand unpaid wages.

On December 10-11, more than 1,000 subcontracting workers at Eastern Heavy Industries in Jiangsu province’s Jingjiang city struck over the company’s failure to pay them for 5 to 6 months. Workers rallied at the Shanghai-Beijing expressway, causing massive traffic jams and forcing municipal officials to negotiate. The next day, the shipyard, under pressure from the local government, was forced to pay some of its wages and bills

Singapore-based JES International, which owns the shipyard, justified the non-payment by blaming the subcontractors, who often hire migrant workers and delay payments to prevent them from leaving without notice. The company also stated that it needed working capital, as the number of ships under construction was high and some clients were asking for delayed delivery dates.

In reality, recent data from China’s National Shipbuilding Industry shows that the number of new orders in the first 10 months this year was down nearly 50 percent, compared to the same period last year. In the first nine months of this year, profits for large shipbuilders were down 40 percent. Several leading shipbuilders, including the largest private-owned shipbuilder in Chongqing, Jinglong Shipbuilding, collapsed in the first half of 2012.

The Hong Kong-based China Labour Bulletin reported that several thousand Eastern Heavy Industries employees had also been unpaid for five months. One worker said the management had warned them not to join the subcontractors in striking, or they would be fired. Some of the workers, however, indicated that they would take action if they were not paid by the end of the year.

The Chinese Communist Party (CCP) regime is once again resorting to police-state measures against workers. In the aftermath of the subcontracting workers’ strike, contingents of police vehicles have been at the shipyard each day in an attempt to intimidate the workforce and prevent further stoppages.

A 12-day strike by 600 workers at a shoe factory in Foshan in Guangdong province ended on December 22, after they were forced to accept half the payout they had been demanding. The stoppage at the Shyang Ho Footwear began on 10 December after its private owner prepared to sell the factory and move to the inland city of Chengdu, where labour is cheaper. The workers demanded the compensation required by law, namely one month’s salary for every year of employment.

Workers occupied the plant in order to prevent the removal of equipment. But the government sent in hundreds of armed police to stand guard as the management shipped out the factory’s assets. The collapse of the company, which was a leading shoe maker in Foshan during the 2000s, symbolises the crisis of China’s export-led growth. Following the 2008 global financial crisis, many export enterprises went bankrupt. Those that survived, like Shyang Ho, slashed costs.

On December 20-21, over 1,000 workers at the South Korean-owned Dongguan Samkwang Science & Technology, which makes mobile phone parts, went on strike over low wages and poor conditions. Large numbers of armed police and security guards were sent to suppress the stoppage, leading to injuries and arrests of workers.

On Monday, 4,000 workers at the Hong Kong-owned Wong’s Electronics Co in Shenzhen downed tools over the lack of compensation for the “restructuring” of the company, which changed its name and legal representative. Large numbers of police were deployed at the factory. On Wednesday, workers marched to the local Shajing township government with banners demanding justice, but the authorities responded with more armed police.

Demonstrations have also taken place at state-owned enterprises. On December 25, more than 1,000 workers at a subsidiary of China’s largest paper mill, Chengming Papers, blocked the junction of two major bridges in Wuhan city to protest against the factory’s closure and unpaid wages. (See photo). Elite “Special Police” contingents were deployed to suppress the strike, resulting in injuries to 30 people, according to the dissident web site, the China Jasmine Revolution .

The web site explained that the protests were part of a month-long struggle by employees, who had been unpaid for half a year. The loss-making company had sold its land but did not want to compensate the workforce. Instead it pressured workers to transfer to distant subsidiaries, with very low pay of just 1,000 yuan ($US160) a month. Workers said the purpose was to force them to resign.

On December 25, hundreds of doctors and nurses from a hospital belonging to a major state-owned enterprise, the Tongling Nonferrous Metals Group, blocked one of Tongling city’s main junctions to protest against the non-payment of six months’ wages.

Social unrest is set to grow in the aftermath of the CCP’s 18th Congress in November. The congress adopted a pro-market economic agenda that includes the privatisation of some of the 100,000 remaining state-owned enterprises. Newly-installed CCP general secretary Xi Jinping recently completed a “Southern Tour” that mimicked that of former leader Deng Xiaoping two decades ago, during which Deng accelerated the process of capitalist restoration in China. Xi’s tour was designed to reassure the business elite and foreign investors that his administration will press ahead with pro-business policies.

Just after Xi completed his tour, workers in Deng’s home town of Guang’an city, in Sichuan province, held a protest over two and half months’ of unpaid wages. Around 200 workers from a Korean-owned knitting factory, Hanmei, struck on December 21. After the factory manager fled to avoid a confrontation, workers rallied at the City Hall, appealing for authorities to step in. Instead, the local government mobilised hundreds of riot police to violently disperse the protests. Six workers were injured and two reporters were detained.

The violent suppression of workers in Deng’s home town was designed to send a strong message that the new CCP leadership will not hesitate to use police-state repression to enforce its socially-regressive pro-market reforms

'Will I get a pay rise?" This question is foremost on almost every wage earner's mind as the year nears its end.

The question, however, got a positive response from the two-day Central Economic Work Conference, which concluded on Dec 16, as the new Chinese leadership made economic restructuring by boosting domestic consumption and improving people's livelihood two of its six key tasks for next year. Increasing people's income, no doubt, will play an important role in achieving the two goals.

Accomplishing the goals will not be an easy task, though.

The income distribution reform plan, scheduled for later this month, has been deferred again until at least next March. The repeated delays in the implementation of the plan show how difficult and complex economic reform in China is. The Chinese leadership, however, should be more determined now than ever to implement the reform because the wealth gap has widened alarmingly.

The yawning income gap has further pushed up China's Gini coefficient - a widely recognized measure of wealth inequality, with anything above 0.4 being worrying. In a report published at the end of 2011, the National Bureau of Statistics said China's Gini coefficient in 2010 was slightly higher than that in 2000, which it put at 0.412. A recent Southwestern University of Finance and Economics survey on China's household financial conditions, however, put the country's household Gini coefficient at 0.61 in 2010, compared with the world's average of 0.44.

Though one or two surveys cannot reflect China's true picture, the trend of widening income gap should be a warning to Chinese decision-makers.

Of course, the wealth gap cannot be narrowed by simply "robbing the rich to help the poor", for it will not only create obstacles for the reform, but also lead to outsourcing of capital and even curbing economic growth. Nor can it be narrowed by forcing enterprises to raise the salaries of all their employees.

Maintaining growth is also a key task of the leadership next year. That means too heavy a burden should not be placed on enterprises. The impractical move of forcing enterprises to raise all their employees' salaries will increase their human resources costs and deal a deadly blow to the smaller ones. Thus the government has to navigate through the difficult waters of income distribution reform to achieve the different and sometimes, more or less, paradoxical goals.

A recent report by Towers Watson, a global advisory services company, shows that Chinese enterprises remain cautious about pay rise in 2013, and the average increase is expected to be 9.3 percent, slightly lower than 9.6 percent in 2012. Such an increase is not disheartening. But more importance should be paid to narrowing the income gap between companies' senior managers and ordinary workers.

Today, the income of China's highest 10 percent earners is 23 times that of the lowest 10 percent, compared with 7.3 times in 1988. According to a report published by the Ministry of Human Resources and Social Security in October, the incomes of management personnel have increased much faster than that of ordinary workers over the past five years, with the yearly salary of senior management personnel of listed companies rising from 291,000 yuan ($46,648.6) in 2005 to 668,000 yuan in 2010, an average increase of 18.1 percent.

Fresh data shows how China’s income gap is worsening, an issue new leader Xi Jinping has resolved to tackle.

While decades of strong economic growth have lifted hundreds of millions of Chinese off the poverty line, the country’s wealth gap has widened to the point where it is among the world’s most unequal nations.

China’s Gini coefficient, which is commonly used to gauge inequality in income or wealth, stood at 61 in 2010, according to a study by the Survey and Research Centre for China Household Finance.

The Gini coefficient measures the wealth gap on a scale of 0 to 100. A reading above 40 usually marks strong inequality in wealth and income.

The coefficient of all countries monitored by the World Bank averaged 44 for 2010. Ireland’s Gini coefficient in 2010 was 33.2, according to Eurostat, a sharply worse reading than in 2009, when it was 28.8.

The Gini data is extremely sensitive in China, and the government has not released an official figure since 2000, when it stood at 41.2.

‘ Rare ’

Gan Li, chief researcher and a professor at the research centre, which is part of the Southwestern University of Finance and Economics in Chengdu, said the reading was “rare in the world” and the gap was wide in both urban and rural areas.

But he said the reading was not “dreadful” because a wide gap between rich and poor was common in a fast-developing country.

One option would be to raise the minimum wage, but that would also hurt employment, he said. “We hope the government could spend more on improving people’s social welfare,” said Mr Gan.

Research earlier this year from the think tank showed that 10 per cent of Chinese households held up to 57 per cent of all disposable income.

The domestic east-west divide was stark, too. The combined income of all households in eastern provinces was about 2.7 times that of the west and central regions.

The manufacturing industry's demand for new employees shrunk by more than 20 percent year-on-year in the first three quarters of this year, according to a recent survey released by the Seebon Human Resources Research Institute.

Among industries, shipping showed the greatest hiring demand, as the need for more employees in transportation, warehousing and postal services increased steadily in the first nine months of 2012, the report said.

Contributing to that result has been the success of e-commerce and the ever-tenser competition among online shopping malls. Industrial restructuring has also led to the disparities in hiring demand, said analysts at the Seebon Human Resources Research Institute.

The survey also said the reduction in job opportunities has resulted in part from the international market's declining interest in products manufactured in China, and the greater number of robots now performing jobs formerly done by people.

It predicted that rising labor costs, the incessant appreciation of the yuan and shrinking overseas demand will force small and medium-sized manufacturers, which once were the source of many job opportunities, to exit the market.

The survey also found that the number of people hired in the first three quarters of the year was up by 5 percent year-on-year. The demand for employees was the strongest in Beijing, Changsha, Kunming, Shenyang and Tianjin during that period.

Most workers saw their incomes rise by 15.1 percent year-on-year in the first three quarters of this year, the report said.

"The average monthly salary for a worker at our factory has increased by at least 15 percent to more than 3,000 yuan ($481) from the beginning of the year," said Gu Zhongwei, general manager of the Wuxi-based Handa Enterprise Fabric Department.

"In the entire textile industry, nobody is talking about profits now. We are only thinking of making it through our current difficulties.

"There is literally no order. Our former partners are now turning to manufacturers in Vietnam and Cambodia, where they offer salaries of only $60 a month."

Shen Xiangjun, manager of Ningbo Jinfan Toy Co Ltd, agreed that labor costs are much higher in China than in other countries.

"I have investigated the Indian market recently," he said. "It turns out that labor costs there are 70 percent cheaper than in China."

He said the average monthly salary at his company exceeds 3,000 yuan.

"Soaring labor cost and rapidly increasing salaries are partly the results of government policies," said Pu Yonghao, Hong Kong-based regional chief investment officer for Asia Pacific at UBS Wealth Management.

"On the other hand, the profit margins of companies have been greatly impaired, especially in labor-intensive industries such as manufacturing. It is very likely that Chinese companies of this kind will lose their edge."

Chinese state-owned companies directly under the central government have hired more than 1,600 overseas employees, said Huang Shuhe, deputy director of the State Council's State-owned Assets Supervision and Administration Commission, according to China Daily.

"International experts have helped these enterprises produce many of the world's leading technologies and products with their own intellectual property rights, and that has laid a foundation that will carry the enterprises forward," Huang was quoted by the paper as saying on Monday.

The Recruitment Program of Global Experts, started from 2008, has hired 136 high-level experts, the paper said.

Another recruitment program, started last year, aims to introduce up to 1,000 foreign professionals over 10 years to help spur innovation, promote scientific research and corporate management.

Zhang Jianguo, director of the State Administration of Foreign Experts Affairs. Told the paper the grogram has hired 94 people.

Professionals recruited by both programs will be entitled to subsidies, research allowances, favorable salaries, residency permits, medical care and insurance policies, the paper said.

ChinaHR was up for sale by its largest shareholder Monster Worldwide Inc. (NYSE: MWW) in early November. But so far no company is willing to take over ChinaHR.

According to the company’s third quarter financial report, Monster’s operating revenue in the third quarter has significantly decreased by 10.5 percent and the company suffered a net loss of $194.2 million, of which ChinaHR contributes $233 million - partially offset by Monster’s other more lucrative holdings.

In fact, ChinaHR is not the only online recruitment company trapped in a slump in China. Data from iResearch reveals that three Chinese online recruitment giants – 51job.com, zhaopin.com and ChinaHR.com, all suffered from decreasing visitors for the first time since 2011.

The mostly homogenous services provided by online recruitment companies are losing power to attract clients with the growth of social networking websites.

According to the Global Employees Index published by Kelly Services, 80 percent of Chinese employees visit social networking websites everyday, 21 percent of which are using these networks to look for jobs.

At present, the platform gathering the most global professional talent is the business networking website LinkedIn, founded at the end of 2002 and publicly listed in 2011. Now it hosts 187 million registered users and 109 million unique visitors per month.

The LinkedIn pattern was copied by large numbers of Chinese professional networking websites after its successful IPO, including wealink.com, tianji.com, dajie.com and wolonge.com.

“Among so many professional networking websites, it’s difficult to judge who will win the appreciation of most users at the moment,” said one analyst.

It was reported that the registered users on professional networking websites have exceeded 70 million and is expected to reach 100 million in three months.

The number of Chinese professionals is huge and is rapidly growing with the development of economy. However, the vertical social service platforms targeting professionals are still in the initial stages, said Han Hui, CEO wolonge.com.

Traditional online recruitment cannot solve the information gap between recruiting companies and job seekers, while professional networking websites can provide a platform for them to know each other more and to respect each other

Interviewees are in general management roles including CEOs and COOs:

79% of the respondents see a shrinking gap of compensation package between expat and local executives.

70% noticed a change in the type of expatriate workers that China is attracting - expatriates are now younger and from more diverse nations.

71% now believe it is harder for foreign-born executives working in China to gain access to local executive positions.

42% cited "employers favor local talent" as the most inhibiting factor to finding an executive job in China.

60% of the surveyed expatriates think employers would prefer to use less skilled local people to avoid paying an expatriate compensation package.

51% are actively looking for a new opportunity.

The survey was conducted by the Association of Executive Search Consultants.

The Shanghai Stock Exchange rose nearly 10% in the last sessions while signs of improvement started to be seen as the economy is accelerating under the monetary control of Beijing. And this could be the beginning of a strong catch-up which could take place in 2013. The Chinese stock market is still at a three year low, and it is one of the few remaining stock markets to be negative this year. In fact, more good news reassured investors and suggested that the second largest economy hit a bottom and could see a new economic upturn next year.

The Chinese economy has shown more and more reassuring signs of upturn since the end of September. The Chinese manufacturing activity in December grew at its fastest pace in 14 months, thanks to an increase in new orders and the resilience of employment according to the first result of a survey of purchasing managers. The HSBC PMI "flash" was released at 50.9, its highest since October 2011. This indicator had increased for the fifth consecutive month, a development that strengthens the hypothesis of a stronger recovery than expected in China.

The improvement reflects the government investment projects announced in the second quarter and which begin to produce their effects on the economy. This important upturn in the activity can be explained by good numbers in construction and distribution industries. The strength of China's services sector shows that the Chinese economy quickly came out of its slump...Investors could take interest in the Chinese stock market again.

Technically, the dynamics of the index is now bullish in weekly data above 2100 points which also refers to the 20-week moving average. One month ago we had reported that it was the time to take long positions. We reiterate our advice to target 2450 points in the first half of 2013. Any pullback on 2100/2130 points will be the opportunity to obtain long exposure to the Chinese market. We can play this bullish trend thanks to a tracker on CSI 300 (IE00B5VG7J94).

Substantial challenges exist identifying and recruiting the right high-tech telecommunications staffing talent in the Chinese market. In fact the need for high tech telecommunication leadership talent, for example, has produced a staffing gap in China that no longer remains balanced. Many view China's immense market as the long-unchanging high tech industry's biggest promise for growth. "Therefore it is critical that companies have a full understanding of their particular stage of globalization and seek to recruit the right leadership talent for that stage" (Luo, 2007, p. 1). Different needs develop at different stages of globalization. A comprehensive strategy for the acquisition of a company in China will prepare the expected audit of HR systems. "I define 'strategic staffing' as the process of identifying and addressing the staffing implications of business plans and strategies, or better still, as the process of identifying and addressing the staffing implications of change, " (Bechet, 2000, p. 1). Challenges to the strategy might arise because of this acquisition--that include unequaled cultural and regulatory factors. This prepared staffing strategy should help make the Chinese acquisition a flourishing investment undertaking for each entity.

It is imperative to associate the company objectives with the globalization concept when considering a staffing strategy. Objectives will prove easier since China has entered the World Trade Organization in 2002. Plus, its continued liberalization of rules governing foreign investment can ease the transition. A difficult challenge remains comprehending exactly where Chinese operation stands according to corporate evolution; then, staff must be recruited to match. Awareness of this fact will prevent detrimental stumbles. A lot of companies in China's market today find themselves at this beginning development stage. "Indeed, with surprising frequency, foreign companies operating in China have tended to make identical hiring mistakes at each stage of evolution of their operations there" (Luo, 2007, p.1). The company must deliberate if a candidate succeeded at a company at a like developmental stage. The company realizes a general manager candidate must do what it takes to close a deal. Human Resources must also realize that present relationships a general manager candidate might bring to the job might not be of much value. Much of this results from important clients altering their inner decision-making dynamics. At a testament to this realization, three major Chinese telecommunications companies replaced CEO's in 2004 (Luo, 2007). This fact, alone, could cause middle management modifications. Another consideration includes, "general manager candidates who are accustomed to working in a multinational environment with far more advanced supporting infrastructure and whose core competency is to mange resources may find it a stretch to produce results-oriented, hands-on salesmanship" (Luo, 2007, p. 1).

While recruiting and staff of employees proves challenging in any market, it proves especially so in China since there is a deficit of management and executive talent (much of the labor shortage due to the lack of pragmatic training). "Under the pressure to move quickly in China, companies must resist the temptation to hire leaders who appear to be candidates generally but who lack the specific skills required for success at the company's particular stage of globalization" (Luo, 2007, p.1). The management of human resources and incorporating the present talent from the two companies in the acquisition might prove challenging. Without a doubt, ineffectual management consolidation may significantly influence the company's vision. Human Resources must reduce the distance between gaps in the two companies, both culturally and geographically. The merger will realize the challenge of differences in business cultures and practices. Realizing all these factors, HR strategy employs a sponsored-mobility approach. When considering staffing, career, and succession systems in respect to "sponsored versus contest mobility norms" Rosenbaum found a "sponsored-mobility approach stresses the early identification of talent. Firms following this norm attempt to benefit from the efficiencies of specialized training and socialization by providing high-potential candidates with challenging assignments and other opportunities believed to be conducive to employee development" (Dreher & Dougherty, 2001, p. 25). China creates a great challenge since the cultural differences (language, particularly) obviously remain immense. Additionally, interaction with leaders in China proves limited.

Not uncommon in other countries (like Czechoslovakia; for example), the Chinese people see those they work with as part of the family—extended. The "personal" element comes much more into play: the manager finds himself (or herself) looked up to like one would an older brother or sister; sometimes giving guidance on personal matters (even performing personal "undertakings." In contrast, this type of behavior in America may be construed as "playing favorites" or unjust exaction. The complexity of this personal employee relationship in conjunction with the context of the workplace must remain at the forefront of Human Resources staffing considerations. In reality, this sort of workplace extended-family culture often precipitates business agreements. Additionally, though, this type of employee/employer relationship construction may produce organizational structure changes.

In the vein contrasting cultures, regulatory factor differences must be regarded. As mentioned previously, China's World Trade Organization status has allowed ameliorated foreign approach—particularly to the service sector (most regulated) in China. This fact, in itself, has granted additional participation in financial, telecommunications, professional services, insurance, etc. A lot of mix-up abounds concerning China's obscure 2001 Labor Law; which creates many ways of reading it from each side. A challenge lies in establishing clear guidelines for each side (since labor regulations appear lacking). Complications arise in staffing a multinational enterprise due to political, economical, legal, business, as well as cultural implications. The effectiveness and acceptability of Human Resources management rides on these factors. The company attests exhaustive cognition of Equal Employment Opportunity policies and their application in the acquired workplace. In this time of war, HR remains cognizant of final regulations clarifying the responsibilities of employers of military veterans according to the Uniform Services Employment and Re-Employment Rights Act of 1994. The law requires employers to reinstate returning service members within two weeks after they apply for reemployment. Returning veterans must be afforded the status, seniority, and pay they would have attained had they remained continuously employed.

Additionally, usually, staffing policies for the host country won't come written with the vantage point of the parent's. Arun Kottolli in "International Staffing Strategy" makes a fine point when he realizes, "Often this tends to be parochial and ethnocentric resulting in tensions between parent and subsidiary management. Often the subsidiary management will not directly point at the problem in the company's HR policies, especially if the policy was written by the 'headquarters.' As a result real reasons are not noticed until it is very late" (p. 1). Ohme in his book, "Borderless world," argues that companies should do away with the "headquarters" mindset and appropriate subsidiaries more freedom. "This freedom is more important in framing HR policies. The main point companies must learn that the HR policies followed at home may not be applicable in the host country" (Kottolli, 2007, p. 1). Human Resources will need to study the regional market circumstance and ply to it. It would behoove the company to take in major executives of the acquisitioned business to join the parent's top management. Current Human Resources polices must change since their policies don't apply to the company acquired.

Establishing loyalty and bonding between both companies starts with an internal recruiting procedure. Even entry level jobs will have a title, as Chinese culture ascertains the prestige of such. This will aid in appealing to potential recruits. However, the title significance could bring about organizational structural changes. The facilitation of early staffing will prove easier with the availability of an intranet Web site. Potential job candidates may view job postings on the Internet, various international newspapers, university/college newspapers and collegiate bulletin boards. An appraisal questionnaire assesses fundamental skills, while the application provides needed information for Human Resources (enabling a selection process). Then, HR can select candidates after an interview. They will not allow the candidate's nationality to blind their decision concerning the best candidate for the position. Selectivity in recruiting remains paramount. "Hiring the right people means more than just securing employees who possess the knowledge, skills, and abilities required to perform a particular job; these people must also be able to acquire new knowledge and skills as jobs and environments change. In addition, employees must find that the work is satisfying and that the overall organizational climate and reward structure meets their needs" (Dreher & Dougherty, 2001, pp. 10-11).

From past foreign acquisitions, history shows a large degree of expatriate applications—producing a good mix with internationals. The lack of skilled management in China assures many expatriate applications. The labor shortage in China should produce a great number of young applicants (especially at the collegiate level). To direct the foreign subsidiary, Human Resources will appoint a home country national to build the parent company's corporate culture in the adjunct. "While this reduces the communication between headquarters and the subsidiary and increased control by the headquarters, this policy has serious disadvantages. The cultural differences and environmental differences will be huge and expatriates may not be able to cope with. Thus resulting in costly management mistakes" (Kottolli, 2007, p. 1).

Human Resources considers the staffing strategy in as a longer-term context. And within this context, increased effectual shorter-term staffing determinations prove ascertained. This near-term aim might gain the attention of managers finding themselves assessed by and rewarded for attaining shorter-term targets. "Because it helps define appropriate short-term actions, it is more likely that the same line manager making the
staffing decision will still be in place to rap the benefits of that decision later on" (Bechet, 2000, p.1). The staffing focus will not remain on implementation concerns. Human Resources will deal with staffing from a planning perspective that's proactive. Those staffing realize, "staffing constraints (e.g., an inability to recruit a sufficient number of individuals with critical skills) may impact the company's ability to implement its plans. These constraints should be identified and addressed as part of the planning process, not left as surprises to be uncovered when implementation begins" (Bechet, 2000, p.1). No long-term staffing strategy proves necessary Human Resources may fill a job position internally (comparatively quick). This, too, saves time and resources. Top managers the company acquires from the acquisition could prove the most valuable asset: they know the market.

Human Resources often spends too much time on data and tables—devising reports and other staffing-related information (often the volume of planning data). For the merger of the acquisition staffing, the focus remains on acting and planning—not just reports. For example, if "you reallocate staff because of something you discern from a data table, then that data has become information. When it comes to staffing, make sure you provide managers with information, not data. If your reports provide managers with data that is simply 'nice to know' or 'interesting' but doesn't directly influence decision making, don't provide them" (Bechet, 2000, p.1). As result, organizational effectiveness increases remarkably. However, Human Resources realizes the extreme importance of auditing HRM practices and departments. "Finally, we bring to your attention a concept refined in the writing of Devanna, Fombrun, and Tichy: the evaluation of the HR function by way of the human resources management audit (HRMA).22 Any audit is typically considered to be a first step in an improvement or change effort" (Dreher & Dougherty, 2001, pp. 30-31).

Additionally, effective training and development proves paramount to increasing organizational effectiveness. English remains at the top of the list of those training and developmental programs. Writing for business, job-specific training, and skills in presentation top the list. Available training exists for retained management in both companies—classes ranging from managing resources, leadership, coaching, and stress and time management. A focus lies in cross-utilization and cross-training. Another perspective of training and development demonstrates orientation "driven by the need to be flexible and able to utilize employees even during times of production slowdowns. When people are able to perform multiple jobs, or are multiskilled, they represent a reserve of talent and are more likely to appreciate how their work and output levels affect the work of other employees in jobs related to their own...times when multiskilling is important and times when it is not" (Dreher & Dougherty, 2001, pp. 14-15). Human Resources will offer an overall understanding of Chinese business patterns and culture to all employees at both companies facilitated through simulations, as well as face-to-face. Human Resources realizes they, "must temporarily forget the old colonial model that often underpinned the multinational stage in which the parent company simply tries to reproduce itself on foreign soil, often transplanting managers from the home country in order to ensure that copy is accurate" (Luo, 2007, p.1). Human Resources will recognize its own strengths and weaknesses. And it will look for candidates for training and on-the-job experience to satisfy its own skill gaps. Despite cultural difference, HR has a working comprehension of the significance of gender in the work environment and overall development. They ensure the consideration of cultural averages in delineating actions and outcomes developed by the team.

First, HR defines the staffing levels and sum of employees needed (and their capacities) for strategy implementation. Staffing resources presently available require assessment. The strategy (through plans and action) will close talent gaps. "Successful implementation of a strategic staffing process lies no in how these basic steps are defined. The 'devil is in the details'—or perhaps more appropriately in this case—the devil is in the implementation. It is not the steps themselves that are important, it is how they are developed and implemented that counts" (Bechet, 2000, p. 14). Part of the equation does not include predicting future staffing. Simply, a context for decision making proves paramount. Again (as previously mentioned) emphasis lies in proactiveness—a planning perspective. HR wants the implementation of its strategy to result in the new Chinese acquisition taking on the status of a prospector firm. "Prospectors attempt to be the first to market with new products and services. These firms rely on innovation, flexibility, and speed. They exploit new market and product opportunities" (Dreher & Dougherty, 2001, pp. 9-10). HR also realizes the paramount nature of strategic perspective: that staffing needs prove optimally met in manners that call for some beforehand preparation. An approach under consideration includes contacting graduate students to develop a relationship with them before their job market availability. These contacts might include internships, as well as a series of presentments. The development of these contacts should increase the likelihood of the graduate student working for the company at school's completion. Staffing strategy will remain constant—an ongoing process (not just a yearly thing: implemented and updated regularly). Additionally, it may prove wise to integrate scenario planning into strategic planning. Each scenario could have dissimilar staffing entailments. HR will ascertain which scenario might occur and determine staffing plans accordingly. To cover this approach best HR assesses staffing requirements for every likely scenario. Then, look for things the scenarios have in common.

In summary, "China's talent gap will not be solved in the short term. In fact, it is likely to get worse before it gets better. Therefore it is critical that companies have a full understanding of their particular stage of globalization and seek to recruit the right leadership talent for that stage" (Luo, 2007, p. l). Human Resources realizes the different needs of a company at different stages of globalization. In order for an effective implementation strategy the newly expanded company (whose revised strategy has resulted in an acquisition in China's market) masters the significance of the connection between business objectives and the concept of going global. Tremendous stakes remain possible. The liberalization of rules governing foreign investment has enabled better business transactions with the country. A comprehensive strategy for the acquisition of a company in China will prepare the expected audit of HR systems. Challenges to staffing strategy may transpire because of this acquisition. These include unequaled cultural and regulatory factors. This prepared staffing strategy should help make the Chinese acquisition a thriving investment project for each company. Though staffing and recruiting of employees proves challenging in any market, it proves especially so in China since there is a deficit of management and executive talent—a lot of the labor shortage because of the deficiency of practical training. Human Resources must lessen the distance between gaps in the two companies on both the cultural and geographic levels. The merger will actualize the challenge of conflicts in business cultures and practices. Knowing all these factors, HR strategy uses a sponsored-mobility approach. The complexness of the Chinese personal employee relationship in conjunction with the context of the workplace must remain at the forefront of Human Resources staffing considerations. A lot of confusion exists about China's vague 2001 Labor Law. Many interpretations abound from each side. Another challenge lies in laying down clear guidelines for each side as result of lax labor regulations. Human Resources looks at the staffing strategy in as a longer-term context. So, within this context increased sound shorter-term staffing decisions prove ascertained. Difficulties develop in staffing a multinational enterprise as consequence of political, economical, legal, business, and cultural entailments. The effectiveness and acceptability of Human Resources management depends upon on these factors.

Written by DG Farnsworth

THE “global war for talent”, which became the byword of human resource (HR) management in the 2000s, appears less urgent as unemployment surges in the wake of the world recession.

Jobless rates in the Euro zone and the United States surpassed 7% at end-2008, and will approach double digits in 2009 as companies slash their payrolls.

Unemployment rates in the BRIC (Brazil, Russia, India and China) countries and other emerging markets are also rising, creating worker surpluses in what were recently tight labour markets.

The weakening of the global labour market affects a broad spectrum of industries and occupations.

Attention divertion

Under these circumstances, corporate managers have a strong temptation to divert attention from the global war for talent (driven by competition for skilled employees amid labour scarcity) to downsizing of the workforce (impelled by falling output and declining revenues).

HR management becomes a target of discretionary spending cuts as companies struggle to boost flagging earnings.

HR managers face a weaker imperative to retain talented employees, whose bargaining power and job mobility have diminished in the slack labour market.

Companies that yield to short-term disturbances in the global labour market risk losing their long-term competitiveness.

The structural factors underpinning the war for talent remain intact despite the economic downturn:

Globalisation heightens the importance of human capital as a competitive asset, particularly for companies based in high-income economies that rely on productivity gains to neutralise the labour cost advantages of emerging market competitors.

Demographic patterns clearly point to future labour shortages in North America, Europe and developed Asia, where fertility rates are low and aging workers are approaching retirement.

The increasing technological content of global services and manufacturing raises the premium on highly-talented employees, who enjoy high international mobility and multiple professional options.

Deficiencies in production of university-trained scientists and engineers in Western countries widen gaps between workforce capabilities and enterprise requirements, compelling many American and European companies to tap the labour-rich emerging markets for skilled workers.

The entry of growing numbers of Generation Y members into the global labour market in coming years raises new challenges for corporate managers, who must compete globally for talented young professionals bringing different values and expectations into the workforce.

Nothing in the current economic downturn indicates a diminution of these long-term drivers of the global labour market.

Accordingly, companies that sustain investments in human capital during the recession will enjoy a strong competitive advantage over companies that neglect HR management.

The traditional model of HR management focuses on administrative functions – application processing, benefits, compensation benchmarking, dispute resolution, employee grievances, performance review and rules compliance.

HR professionals typically spend the bulk of their time absorbed in these day-to-day tasks, disengaged from the organisation’s broader objectives.

The HR curricula of business schools reinforce this tendency, producing HR professionals well trained in administrative processes but lacking a firm grasp of the links between human capital and corporate strategy.

The HR profession is undergoing a migration from this tactical model to one that treats HR management as a core strategic activity.

Graduates of elite MBA programmes, who previously shunned unglamorous HR jobs to take positions in corporate finance or management consulting, are now pursuing HR careers.

Factors driving new HR

Several factors are driving the rise of the new HR:

Growing recognition by senior executives of the centrality of human capital in corporate strategy, especially managers of companies situated in global industries where strong HR management is a competitive differentiator.

Increasing complexity of global HR management, which demands HR professionals able to recruit employees with varied backgrounds and to navigate diverse geographies and cultures.

Exhaustion of productivity gains from investments in new plant and equipment, which heighten the importance of high-quality workers as drivers of productivity growth.

Expanding opportunities for outsourcing of HR functions (e.g. benefits administration) that free up corporate resources to engage the strategic dimensions of human resource management.

Changing attitudes toward work by Gen Y individuals, whose recruitment and retention require an integrated approach to professional development and careful attention to the entire employee “life cycle”.

These factors heighten demand for HR professionals possessing a strong strategic acumen, a global perspective, an embrace of workforce diversity as a competitive asset, and a capacity to identify and develop rising stars in the organisation.

They highlight the need to align HR practices with labour force dynamics: e.g. forecasting future workforce requirements; assessing leadership pipeline trends; and devising performance metrics that address both the “hard” and “soft” skills of employees.

And they underscore the imperative of continuous and visible engagement in HR management by senior organisational leaders – articulating the links between human capital development and corporate strategy; mentoring and coaching young employees with leadership potential; surmounting organisational silos to expand lateral opportunities and optimise deployment of the company’s human assets.

HR management in a global recession

Investments in human capital are not likely to be a high priority for companies whose very survival is threatened by the global downturn. But for companies with strong balance sheets and compelling business models, the economic downturn presents important opportunities to strengthen their HR management capabilities and position them for the inevitable rebound:

Utilising slack time to engage employees in professional development and technical training programmes, which serve both to sharpen skills and to preserve morale during tough times.

Opportunistic hiring of talented individuals caught in downsizing at weaker enterprises, which augments the company’s human capital base for long-term growth.

Promoting cross-divisional and cross-functional collaboration, which improves utilisation of HR and encourages teamwork between employees who previously had little or no contact.

Redefining and expanding spheres of authority and responsibility of star employees, which permits assessment of the leadership potential of individuals who may eventually occupy executive positions in the organisation.

Few companies are escaping the fallout of what now rates as the worst global economic crisis since the Great Depression. As a result, even robust enterprises are downsizing.

How companies manage downsizing is an important component of HR management.

Generous treatment of departing workers – including high-quality placement services and severance packages – not only creates goodwill among former employees who will speak favourably about the company and who may indeed return as “boomerangs”, it also burnishes the company’s image as an attractive workplace and thereby strengthens its capacity to recruit and retain talented persons when the economy recovers.

The recession we’re in will have long-run consequences for employment and consequently recruiting. The world is about to see the biggest increase in unemployment in decades. The World Bank and the IMF predict that global trade will contract at the fastest rate since 1930 and global economic output will drop for the first time since the Second World War. Employment is a lagging indicator of problems in the wider economy, so unemployment will continue to rise even if economies start to recover today. The consensus estimate among economists is that in the developed world average unemployment will exceed 10% before the end of 2010.

There are glimmers of hope. Inventories have fallen to such low levels that production will have to be increased just to meet the current level of demand. The fall in consumption is beginning to level out. In the U.S., auto dealer and homebuilder surveys are heading up. Japanese automakers have announced production increases. A broader indicator of an upturn — JPMorgan’s global manufacturing index — posted a second consecutive gain in February, and its new-orders index is rising. A realtor friend just wrote that she has five closings this month. 5. F-i-v-e. 5. Way to go.

What Will Emerge?
Regardless of when we emerge from this situation, there are some major changes in the employment landscape that will change recruiting in terms of where it occurs and how it is done. Where recruiting occurs will depend on where there is growth — somewhat debatable but getting clearer. Where it will not occur is in finance and housing construction; they will not return to past levels for a very long time. Also, if you work in an industry that’s heavily dependent on exports, then don’t expect an upturn either. Domestic demand is also falling overseas, and countries will increasingly strive to protect their domestic industries, further reducing the need for imports.

Where?
A recovery will be weak: losses in asset values and the need to reduce debt will all but guarantee that. But there will still be pockets of growth. These will be largely in infrastructure, IT, education, healthcare, government, and energy.

Infrastructure will be an early winner because so much stimulus and other funds are being directed at it — not just in the U.S. but also overseas. In particular, India and China are channeling billions of dollars at infrastructure projects to both boost employment and enhance economic activity. That means industries that support infrastructure — heavy equipment, architecture, cement, safety equipment, etc. will see near-immediate upturn in demand.

IT and engineering are perennial job creators, and will remain a source of employment for recruiters. For the simple reason that supply cannot match demand, a problem that will be exacerbated by restrictions on companies receiving stimulus funds from hiring foreign workers. This gap is even wider overseas. In India and China, compensation in IT is estimated to increase this year by 11% and 8% respectively because of the extreme shortage of qualified professionals.

Education will see jobs growth because of three factors: 1) large cohorts of teachers reaching retirement age; 2) a massive expansion in funding for education and student aid in the current federal budget; and 3) large increases in enrollment in higher education by people unable to find work.

Healthcare is another engine of job growth. Enough has been written elsewhere on the shortage of nurses, doctors, etc. that it doesn’t need to be repeated here. The U.S. Bureau of Labor Statistics also predicts an increase in social services jobs as a swelling number of retirees check-in for medical care.

Government payrolls at the federal level will swell to accommodate the administrative needs created by the vast expansions of regulatory authority being proposed — over banking, transportation, education, labor, and healthcare. The situation is likely to be the opposite at the state level where most states find themselves facing huge budget shortfalls.

Energy in general and green energy in particular will see significant growth. Biofuels, wind energy, and solar all will benefit from new investments and tax incentives. Consequently jobs that are related — research, infrastructure, maintenance, and sales can expect to benefit. However, the number of jobs in these industries is small to begin with, so the overall impact may not be much.

Interestingly, much of the increase in employment is expected to occur in small businesses and startups. One impact of a recession is that more people start businesses because they can’t find work. With expansions in federal grants for some of the above industries, expect to see a lot of new companies emerge. Also expect to see geographical shifts in areas of employment growth. California and New York continue to shed jobs as employers move away because of high taxes and burdensome state mandates. The beneficiaries are many Midwestern and southern states that have low taxes and fewer restrictions.

Recruiting will become more difficult in this new landscape that emerges. Unemployment is not evenly distributed, and for many of the industries mentioned above there is not an abundance of unemployed talent. The employed are also less interested in changing jobs in an uncertain economic climate and will likely remain so for years. Finally, mobility for many is restricted by their inability to sell their houses. Many people will be forced to delay retirement, but that will not solve the supply problem. Many of the new jobs that will be created cannot be easily filled with skills available in the current labor pool.

How?
Changes in how recruiting is done are harder to predict, but some trends can be discerned. Given that a recovery will be weak, employers are more likely to turn to part-time and contract recruiters than have full-time staffs. This will be reinforced because much of the growth in jobs is expected to occur in small and medium-size businesses that have no need or cannot support full-time recruiters. An increase in needs for sourcing, as opposed to full-service recruiting, will occur as employers seek to minimize costs.

Technology will need to adapt. The major boards are not designed for use by the occasional recruiter. It’s likely that products and services targeting small-businesses will be where we see most changes in recruiting technology.

The Legend of the Phoenix
What we’re experiencing is known in economic theory as creative destruction. Jobs are destroyed and new ones emerge. In the past it has been a somewhat gradual transition, but not this time. In past downturns the mood has never been so sour. In 1990 and 2001 most saw the recession as a slow-down, a readjustment, perhaps even a necessary realignment of the business cycle — something to be concerned about not a lot. The future was bright. After all, this is America. But this time is different. It shows up in many little ways. Several people I know have asked that we use Skype to talk to lower their phone bills; that they’ve cancelled their magazine subscriptions and only read online; that they’ve changed their home page from CNN to the BBC because there’s less negative news. Larger numbers of friends than I’ve ever seen are online late at night and available to chat. Someone I know to be an eternal optimist wrote to me that the American dream was an illusion and they don’t believe it in any more. Much has gone wrong if it has come to this.

This time it’s like the legend of the Phoenix. It lives for a thousand years and once that time is over, it builds its own funeral pyre, and throws itself into the flames. As it dies, it is reborn and rises from the ashes to live another thousand years. We’re at the end of the thousand years.

Times are tough. Even those companies that are doing reasonably well are cutting their recruiting teams by a minimum of 30% to a maximum of 90%, and tightening up expenses to the absolute barest minimum.

Half of these cuts are probably necessary anyway, the balance most likely an overreaction to the dismal economic conditions most companies are now facing.

There is an expectation that along with the cuts these recruiting departments need to drastically improve their productivity by 30%-50%, almost overnight.

The good news is that while most corporate recruiters are working hard, the majority are not working smart.

As a result, getting 50% or 100% productivity gains isn’t that hard to do. With this in mind, here are some things recruiting leaders can do to increase overall productivity by at least 100%.

An Almost Endless Stream of Ideas on How to Increase Corporate Recruiting Department Productivity by Over 100%
Only hire recruiters who are, or can become, partners with their hiring managers. Recruiters who are partners with their clients get more time to discuss real job needs, they send out fewer candidates, make more hires, and overcome natural hiring manager resistance to see top candidates who don’t fit the bill on paper. Partners make twice as many placements per month than recruiters who are perceived as vendors to their clients, so this is a huge productivity opportunity.
Make sure your recruiters are competent to do the work assigned. One way to increase productivity is to ensure all of your recruiters are as good as those in the top 10% on your team. (Contact me if you’d like to check out our new online recruiter assessment tool we’ve created with Profiles International.)
Make sure every recruiter understands the jobs they’re filling. Sadly, most recruiters don’t know much about the jobs they’re representing. Whether it’s a call center in Chicago, a sales rep in San Jose, or a J2EE architect in Ashtabula, recruiters need to know what drives on-the-job success, why the job is critical to the company, and why a top person should consider it.
Make sure your recruiters totally understand their target market. Recruiters need to be subject-matter experts regarding the job, the industry, and especially the needs of their ideal “target” candidates. Creating candidate personas is the first step, including demographics, associations, first- and second-degree networks, conferences, recognition awards, academic connections, and motivating needs. This allows them to write compelling ads, post them in the best places, know exactly who to call, what to say, how to get great referrals, and how to convince the best people your job is the best of the bunch.
Make sure your recruiters know how to recruit. Recruiting means getting more candidates interested at the beginning, ensuring that few drop out in the middle, and 95% of all offers are accepted on fair terms. Effective applicant control is at the core of this and most recruiters don’t even know what this even means. Do you know how many candidates you’ve lost because your recruiters dropped the ball somewhere in the process?
Make sure your recruiters are respected by the candidates they represent. If recruiters aren’t seen as subject-matter experts and career advisors by their candidates, you’re losing some great people before the process even begins. You’ll get a good sense of this by calculating how many “A” level candidates your recruiters uncover and place on a typical search. If it’s not 70% or more, you’ve found a huge productivity improvement opportunity.
Make sure your recruiters can accurately assess candidate competency. Recruiters should be able to get this right 80% of the time with a 30-minute performance-based phone screen, at least to the point of not embarrassing themselves by recommending a totally unqualified person. Think of the time wasted sending out a candidate who shouldn’t be seen in the first place.
Make sure your recruiters are tough-minded, confident, and persistent. The best recruiters don’t take no for an answer, they defend their candidates from superficial assessments, and they close on career opportunities more than money. These recruiters are 2-3 times more productive than those who cave at every negative. Double your team’s productivity by making sure your recruiters are those who don’t give up without a fight.
Manage time. Cold-calling people you don’t know is a big time-waster. Calling people who are good who will call you back is an ok thing to do if a great ad didn’t work. A sequenced sourcing strategy based on the “low-hanging fruit principle” of selling should be established for every search assignment. Then, measure your recruiters on qualified sendouts/hour to start finding out where your team is wasting its time.
Don’t let your recruiters call people who won’t call them back. Start tracking voice-mail return rates. Those with the highest percentages (target a minimum of 75% to start) usually spend more time calling referrals, are seen as subject-matter experts or come across as extremely professional. To improve productivity 300%, either train your recruiters to increase their callback rate from 25% to 75%, or hire those who already do it without complaining how hard it is.
Make sure your recruiters get 2-3 high-quality referrals on every call. The ability to get high-quality referrals is the secret behind passive candidate recruiting. A great referral will call you back if you mention the name of the great person who provided the referral. Recruiters then need to prequalify every referral and only call those who are worthy. If you track great referrals per call, you’ll quickly know which recruiters are able to play in the passive candidate recruiting talent game.
Prepare a process-flow diagram of every step in your hiring process and calculate the yield at each of these steps. Look at each step in your hiring processes and see where you lose the most candidates. First, track ad response and apply rates. At the back end of the process, figure out how many good candidates were poorly assessed or excluded for dumb reasons. Then start working on those process steps that can double or triple your team productivity.
Make sure you’re attracting early-birds, not leftovers. When you examine the problems associated with most active candidate sourcing programs, you quickly discover that they’re attracting leftovers, or candidates who have been in the market a few weeks or more. If you’re not attracting the best of the bunch as soon as they start looking, you’re wasting time and resources going through electronic stacks of resumes of unqualified people. Implementing an early-bird sourcing strategy can increase your active candidate sourcing productivity by 100-200%!
Eliminate all barriers-to-entry. The best people, whether they’re active or passive, are more discriminating and don’t want to be pushed into filling in an application before they’re ready. To address this critical need, establish an open-door policy where you allow candidates to “just look around” before getting serious. This is what Web 2.0 is really about — establishing two-way relationships using a variety of entry points to attract someone’s attention.
Manage your 500-pound gorillas. A huge productivity loss is managers who can’t recruit, don’t know real job needs, or can’t accurately interview. If you’ve ever lost a good candidate for one of these reasons, or if managers refuse to see a top-notch person with a slightly different skill set, you know how much time is wasted here. Getting hiring managers inducted into the real world of hiring top performers will double your productivity almost overnight. Not doing it will diminish the impact of everything else mentioned here. (Contact me if you’d like to find out about our new gorilla taming programs.)
Doing everything described will absolutely result in a 100%-200% productivity gain. If not, you didn’t do them right, so start over and try again. Even if you did achieve the productivity improvements, start over again anyway to get another 100%-200% productivity improvement.

Things are changing so fast you need to keep at it by establishing a continuous improvement program. Bottom line, this is what this article is really about.

I wanted to take a few minutes to lift our thinking out of the chaos and calamitous scenarios bombarding us in the news today to revisit and expand on one of our earlier podcasts by my cohort Kent Kedl on the topic “Why China Matters.”

In that podcast, Kent encouraged us to keep our eye on the ball with respect to China — in terms of what it can contribute to both our top and bottom lines. He also warned us to keep our attention on China’s ability and increasing interest to invest in the West.

As many of you no doubt have heard, there are a range of scenarios being bantered around about a Chinese auto company buying GM. While I think there are many hurdles to this scenario, even its possibility should grab our attention. China will continue to increase its standing in the world economy and thus affect our business, negatively or positively, whether we like it or not. Therefore, it has to remain on our strategic radar.

In this podcast I wanted to give you some perspective on the “talk on the streets” from companies and observers actively playing in China’s market in order to get a read on their views of the opportunities and challenges facing western firms doing business there. I’ll also touch on the tactics and initiatives being considered as a response. These insights are assimilated from a range of sources, including our own Technomic team, our many clients (who comprise both large and small/medium sized firms both sourcing and selling in China), from local Chinese businessmen, as well as from our friends at AmCham-Shanghai.

First let me acknowledge that all is not rosy in China either. Most firms are planning for lower growth (though you will note they do use the term “growth”) and, as you would expect, they see recession in Europe and the U.S. Credit is tight and the market for public offering of equity is very difficult. China’s stock market has also tumbled. Competition is becoming even fiercer with resultant price/margin pressure.

This margin pressure extends throughout the whole supply chain. So local management see as the keys to success a major focus on cash and cutting costs while trying to maintain and even develop their human capital, attempting to keep morale up. They are looking to be more innovative and to excel in their supply chains. We continually hear the buzz words, “get lean,” “best practice” and “China is the best place to be.”

Digging deeper

Let’s probe a couple of these areas a little more deeply and identify some specific measures and initiatives being implemented by those companies taking a more proactive position in these tough times.

Supply chain excellence remains a central theme with a focus on inventory reduction, scrap/waste elimination, capacity rationalization and better/smarter purchasing. As mentioned, credit risk management is a high priority as is the preservation of cash. One thing the Chinese businessman has taught me over the years is that “cash is king,” or emperor as the case may be.

Importantly, and a central point I want to get across, is the continued emphasis on growth. China, despite some slowdown, still offers attractive possibilities to expand the top line, even in this world recession. To achieve this, companies are trying to get smarter in their commercial strategies, selecting high value/high margin projects, targeting higher growth industries and especially import substitution (perhaps a warning here for those of you feeling comfortable with your export channels into China’s marketplace). Additionally, they are maximizing access to global and regional accounts, trying to exert as much account leverage and influence as they can.

The central theme here is proactivity. In these turbulent market conditions, disruptive strategies can be very effective, especially if your competition is distracted by such mundane things as survival.

Let me also address a question that I hear constantly these days: Is manufacturing leaving China? I know how to say the word “no” in about 10 languages, so consider it said. Now, is China’s manufacturing profile changing? Absolutely! We see some attrition where manufacturing is very people intensive, has low margin and is highly polluting. The government seems content to let this type of manufacturing either survive on its own, or migrate to other Asian countries like Vietnam. We are seeing little abatement in manufacturing FDI coming into China.

Look what at China offers manufacturers:

A strong and deepening supply chain and infrastructure
A major and continually growing domestic market in addition to export potential
Large volume scale and its benefits to cost competitiveness
An ample workforce that can be trained and empowered
Significant latent productivity to be gained by further process improvements
A very supportive pro-business government
Talk to Westerners who have dealt with government, employees and unions in Vietnam, India or other developing southeast Asian nations. This may open your eyes to the positive things China offers.

As we have repeated over the past year, China remains a strategic market for a dual-strategy approach: tapping the local market while developing secure and competitive sourcing for both domestic and international markets. And to quell the rumors of China’s impending demise that I see reported in the U.S. media, note the following:

According to the “2009 Economic Blue Paper” released Dec. 2 by the Chinese Academy of Social Science, a central government think tank, China’s GDP is expected to grow 9.8 percent or so this year and should be able to be maintained at a growth rate of some 9.3 percent in 2009. The minimum GDP growth rate for 2009 as set by the government is 8 percent. Anything lower than this is not acceptable to the government, whose top priority is to maintain social stability. So I can imagine that the Chinese government will do whatever is possible to accomplish this “break-even” growth rate for 2009. The government has both the will and the means to make this happen, and we have seen no hesitation in the past for them to take action.
If you like mind boggling numbers, note this one: Pledged investment by the central government for 2009/2010 is RMB 4 trillion! My calculator doesn’t have so many decimal places, but I reckon that’s almost $580 billion. Local governments are committing substantial funds, as well, which could significantly increase or even exceed this already massive figure. The central government even earmarked almost $15 billion for investment projects for the 4th quarter of 2008 to pad GDP a bit. As the Summer Olympics this year showed us, China can do things on a mind-boggling scale.
The EIU forecasts that by 2030 China will have over one billion middle- or upper-class consumers and be second only to the U.S. in economic output.
So, yes, China will have its struggles, but it ain’t going anywhere.

Finally, let me leave you with a few take-aways in terms of actions you might consider with respect to China as you review your 2009 strategy:

A clear theme among our client base is “smart growth.” This means being aggressive but more pointed in your projects and target markets/customers. To be effective, you must have current and accurate intelligence on your marketplace.
Manufacturing efficiencies are there to be had. Explore lean strategies and bring your best practices to China. Even if you are working with third-party vendors, in the right buyer-supplier relationship, you can effectively transfer process knowledge to key partners to help them improve their competitiveness.
Re-think your supply chain from start to finish. The recent dynamics in global markets have changed the landscape of sourcing costs and moving product around. Look at ways to optimize your supply chain and use it as an offensive weapon. You can exploit the strain your supply chain partners are feeling to develop a more efficient process and a more competitive supply structure. You may find, like the Detroit Three, as our auto companies are now called, that they are open to about any conditions in order to get “bailed out” of their present circumstances.
Lastly, chaos is the breeding ground for disruptive strategies. Look at going forward or backward in your supply chain in order to add value and enhance control. Consider an aggressive acquisition. There are many cost-effective assets to be had in China if you know how to find and cultivate them. A strategic move here could alter the playing field in your market, both in China and internationally. With the lull in market demand and the difficulties in going IPO, you may find that there are more friendly targets out there among Chinese manufacturers than there have been in the last couple of years when many of these same companies were demanding 20-30 times earnings for a piece of the action.
I hope these insights from the front lines have been helpful and that you will consider some of the actions I suggested. It is interesting to note that when the Chinese use the word for crisis (wei ji), it is a joining together of two words: “danger” and “opportunity.” Let’s not forget the second part of this meaning for crisis as we battle this economic environment.

http://www.technomicasia.com/blog/2008/12/15/why-china-matters-part-2/

During tough economic times there is intense pressure on all functions within the business to re-think their current approach in an effort to become more competitive and aggressive all while containing cost.

Unfortunately, many recruiters and recruiting leaders choose an opposite path, becoming more conservative in their approach. When markets head south and fear about economic issues grip the populace, consider a counter-cyclical recruiting strategy that sends a clear message to everyone inside and outside your organization that talent truly means something to your organization.

One controversial yet extremely public, effective outside-the-box recruiting approach you might consider is “proximity recruiting.”

You Must Do Internet and Physical Recruiting
Even with the tremendous growth of Internet recruiting, not everyone is actively surfing the Internet looking for a job or combing through their email in anticipation of your generic form letter introduction.

Reaching a greater percentage of the population relevant to your job searches often requires using at least three channels to reach them, one of which should be physical. The underlying concept of physical recruiting is a simple one, just as robbers target banks because that’s where the money is! Recruiters need to target physical locations where a large number of potential hires can be found.

While nearly everyone in recruiting is familiar with the dreaded job fair, there are numerous other approaches to physical recruiting that are far more effective and fun. One such approach is “proximity” or event recruiting. Proximity recruiting at professional events (tradeshows and seminars) is clearly becoming more mainstream, but one location in particular really elevates the visibility of your efforts and qualifies as “outrageous.” The location? Across the street or in the parking lot of talent-competing firms in trouble.

Proximity Recruiting with a Taco Truck
If you have been paying attention to the business press lately, you are probably aware that Internet giant Yahoo! was planning to lay off approximately 1,000 employees worldwide, the greatest percentage of which would come from its Silicon Valley headquarters in Sunnyvale, California.

What you may not know is that despite a multi-year trend of notable voluntary exits by key employees, Yahoo! is still considered by many to employ some of the greatest engineering talent in the industry. This talent is extremely valuable to hundreds of upstarts working on next-generation technologies.

Yahoo!, like many organizations planning a reduction in force, kept its plans secret until the day when the axe actually swung. Because employees knew pink slips were coming, but no real guidance was offered as to who would be impacted, more people were concerned than would actually be cut.

Seizing on that fear and the actual swinging of the axe, Tokbox, an upstart enabling free voice and video calling over the Internet without any software download, engaged a proximity recruiting strategy that some may consider outrageous.

While pink slips were being handed out, Tokbox executives were setting up a taco truck across the street from Yahoo’s corporate campus, offering employees affected (and anyone else that wanted to chat) a hot lunch and information about employment opportunities.

Their approach was a simple one. They leased a taco truck and driver for the day, set up across the street in plain view, and offered a hot lunch to any Yahoo! employee who wanted to talk. Company executives were on hand and the atmosphere was light.

In order not to make anyone overly nervous, the conversations were kept short. While proximity recruiting has become more common in the Silicon Valley, Tokbox’s efforts still garnered a great deal of press both on the Internet and via the mainstream news media, earning them hundreds of thousands of dollars worth of free PR and employment advertising.

Other Proximity or Event Recruiting Opportunities
If you are not ready to offer free food or display a banner, consider additional proximity recruiting approaches:

A van with a recruiting banner. If there was a most commonly used form of outrageous proximity recruiting, it would have to be the use of the recruiting van (usually with a large banner) that is parked within easy view of a large corporate site or a commuter site frequented by target talent. The “banner van” parked across the street approach has been used both in high-tech and healthcare to target firms that are currently going through acquisitions, union problems, and workforce reductions.
The “across the street” bar, restaurant, or gym. Almost any firm with a large number of employees has a bar or restaurant close by where a significant number of the site’s employees go for a drink or meal with a colleague. These locations are packed with employees wearing IDs, who incidentally, often have their guard down. Health clubs and gyms are also great spots to target.
Award events. You’re almost guaranteed to meet the best and brightest at events that offer awards or prizes for excellence and innovation. Not only should the recipients be targets but you should also look at award presenters as both potential targets and as referral sources.
College recruiting approaches. Because college students love to attend events, proximity recruiting should be a major part of your university recruiting effort. Place a “banner van” key across the street from college campuses. Consider recruiting at campus club meetings, at college sports events, at music concerts, on the beach during spring break, and even at both on- and off-campus college poker events.
Conventions. If you’re trying to hire a nurse, it only makes sense to recruit at a bar inside or outside a nursing-related convention, or where nursing continuing education is being offered. Here again you have the advantage of almost everyone having a name tag with their own and their company name on it.
Clubs and groups. If you are seeking individuals with certain skills or attributes, consider recruiting at clubs, societies, or organizations where individuals with these attributes are common. For example, if you’re looking for risk-takers, target rock-climbing clubs. If your search includes disciplined individuals, consider military groups, math societies, and music groups.
Hotels where company events are held. When you think about it, companies do send their very best people to meetings, seminars, and events. Occasionally, corporate events are announced on the hotels marquis for everyone to see, making it easy to schedule your next pub crawl. This time of year, immediately before a firm’s holiday party gets underway, is another time to begin building relationships with potential targets.
Corporate training centers. Many firms send their best employees to corporate training. Because a good deal of corporate training can be long and dull, there is a high likelihood that a large group will go out for cocktails in the host hotel or at a nearby bar. So, if you have large corporate training centers near you, consider them prime targets.
Shareholder meetings. The bar across the street from the location of the annual shareholders meeting will almost always include a number of company employees and leaders. Go before or after the event to make contacts and build relationships.
Miscellaneous. Firms have practiced “proximity recruiting” at other events and sites including wine festivals, home shows, in shopping malls, and at charity events.
Final Thoughts
If you are put off by the concept of boldly “raiding” other firms, you should realize that “stealing” another firm’s customers is already an accepted and common practice. Both sales and recruiting are competitive functions where the most desirable targets have already been captured by your competitors. As a recruiter, your job is to provide your coworkers with the best teammates that can be found anywhere, period.

No matter what you do, you can never successfully recruit a firm’s employees unless the firm that the employee currently works at has already failed to offer them opportunities that are superior to yours. If you are even slightly hesitant about raiding firms like GM, Ford, Chrysler, Citigroup etc. that have clearly failed their current employees, don’t be surprised when you are replaced by a recruiter who is more aggressive, bolder, and more willing to try something new.

When the economy took a turn for the worse in October, many recruiters began fearing for their own jobs. The good news is that some companies are still thriving. To predict a company’s financial health and penchant for hiring, look no further than its customer base.

“This downturn is really a mosaic, not a uniform event,” says Kip Cassino, VP of research for Borrell Associates. “You can’t just look at the national trends to judge which industries or companies might be hiring; you’ll have to do some rigorous homework.”

Here’s an example of what Cassino is describing.

News reports frequently cite the construction industry as being highly impacted by the weak economy, but lingering below the surface-level macro data are some exceptions. Firms that build hospitals, schools, bridges, or power plants may have a healthy pipeline of projects around the globe. Customer demand for goods and services and geographic footprint determine how the economy is impacting each company or industry sub-segment and its economic outlook.

In addition to traditionally recession-resistant industries like healthcare and education, transportation and information services appear to be fairly strong during this downturn, according to Cassino, while recruiters will have to carefully research opportunities within the durable and non-durable goods manufacturing industry, because it is a mixed bag. Real estate is slowly being reignited by a buyer’s market, and when you get beyond Wall Street, even the financial services industry isn’t all bad.

Also, growth-oriented, mid-size companies may be a source of opportunities for recruiters with large-corporation recruiting experience and know-how.

Despite a few bright spots, recruiters are facing some headwinds. A search on the online job posting consolidator Indeed reveals 6,705 open recruiter positions nationwide, 3,937 of those in corporations and 2,744 in staffing agencies. Temporary help led all industries in the number of initial unemployment claims filed in October, according to data from the U.S. Bureau of Labor Statistics, and the entire industry accounts for only 787 open recruiter positions on Indeed.

The slowdown dovetailed with a decline in U.S. new job creation and a subsequent pullback by increasingly wary passive job seekers. The number of employed people planning to look for new jobs declined 7.5 % between Nov. 2006 and March 2007, and the numbers have since continued to decline, leaving recruiters to refill a dwindling number of vacant positions. Cassino’s view is that there won’t be a significant uptick in hiring until 2010 to 2011, mostly fueled by vacancies created by retiring baby boomers.

Your company may be sending a brand-destroying message that hiring next year’s summer intern is more important than hiring your next director, vice president, or other C-level executive.

Many firms are hiring college graduates and interns for next summer. In many of those cases, relocation is paid to the college graduate or summer housing is arranged for the intern. A look at the experienced hiring market illustrates an entirely different story. A search in Google for “local candidates only” delivers more than 250,000 results. Sure, several of these openings are for retail or hourly employees where considerable education credentials aren’t required.

But you get:
50,000+ results for “local candidates only” vp
5,000+ results for “local candidates only” mba

If you sift through there a bit, you’ll find some senior openings like Chief Financial Officer and Chief Marketing Officer. Would it not be wise to mix in talent from other regions, if not solely to have different vantage points and a more diverse perspective? The best companies I’ve ever worked for had these qualities and created true diversity in skills and life perspectives. Ideally, you should be recruiting the best people who are passionate lifelong learners with cutting-edge skills capable of a building a collaborative, high-performing culture regardless of their location.

It’s similar to what I see when analyzing strategic Internet marketing programs. It comes down to one simple thing: legacy, incumbent budgets that prevent you from achieving the desired outcome. Long-standing, legacy budgets fund college graduate and intern relocation programs and are regularly renewed while mid-level, experienced-hire budget resources are highly irregular and often insufficient to acquire the best talent.

The expenses for experienced hire candidates, such as airfare and hotels during interviewing, and relocation costs of an experienced hire, often come directly out of the P&L of the business unit doing the hiring. As you enter budget cycles in the years ahead, you should consider creating a flexible budget pool for experienced hires that is independent of the business unit. This not only will help your recruiting programs hire the top talent you need today, but will position your firm strategically to have a nimble experienced hiring process in the upcoming years as the baby boomers begin to retire and you look to hire replacement leaders from Generation X.

In the short term, you need to get a bit more creative to give offers to the best and brightest talent. Here are a few ideas for obtaining the best, most geographically diverse talent:

Actively Seek Out Renters as Candidates. It’s understandable that you don’t want to take on real estate risk unless absolutely necessary, especially in the current marketplace. Additionally, you want to be hiring candidates who demonstrate responsible financial behavior — they might have the same positive tendencies when making decisions for your business! Renters with no outstanding debt or without hard-to-divest real estate should be therefore highly sought-after assets! An added benefit of this is that there is a correlation with having fewer personal belongings when renting and that would lead to a higher likelihood of a lower-cost move overall.

Target Veterans Terminating Active Duty Military. Lisa Rosser is a book author and founder of The Value of a Veteran, a firm that advises and trains organizations on the value and hidden benefits of hiring veterans. According to Lisa, “Over 100,000 service members separate from active military duty (i.e., not National Guard or Reserve duty) each year and it’s a little known fact that each and every one of them is entitled to one free move anywhere in the United States.” The veteran can request that benefit any time within one year after the date of separation. Many military members begin their job search eight or more months in advance of their last day of contracted service. That is the optimal window to begin marketing your company and its typical hiring needs to the military audience, and wrangle that free move on Uncle Sam’s dime. She also encourages people to look at the skills and competencies fully, not just their job titles and/or organization. These aren’t just infantry folks — among them are computer programmers, highly skilled engineers, nurses, and healthcare professionals.

Seek Out Spouses of Recently Relocated Workers. You might find some candidate gems here. Larger companies in your region who frequently relocate people might have lists of such people or access to organizations that provide support to these people. Look at their skill sets completely — not just their last job title and company brand. If you find a way to quickly show these people that you see value in them when they first move to an unfamiliar place, you are very likely to make an extremely positive impression. The result will be acquiring an appreciative, loyal, and content worker who has a higher likelihood of remembering your gesture.

Target Individuals Who Have Shown Interest in Your Geographic Region. You can seek bloggers and social media participants via search engines such as Google who mention the position’s location favorably in their writings about a vacation, a relative, or close friend that lives in the region, a business trip they particularly enjoyed, or otherwise. Then again, a candidate might present you with an old-fashioned letter to someone at the company stating a desire to move the area. Due to the affinity that they have for the area, they might be highly motivated to move to the region and happily share or absorb the costs upon receiving an offer. Just like with the relocated spouse, this individual will be highly appreciative of the opportunity. As an added bonus since you found them via their blog or social media tools they are likely to tell the story over and over, creating positive word of mouth about your employment brand.

Focus On Sourcing Candidates Who Once Lived In Your Region. If the role is New York City, knowing that they can handle living there can be an important factor in selecting a candidate. Potential candidates will likely fall into one of two buckets: A) they loved it and can’t wait for the opportunity to return; or B) they never wish to return. The latter might have ideas about candidates who might be appropriate due to their prior experience in the location, so even that outcome is not a waste of your time and effort.

Please share this article with your teammates and leadership to start the dialogue that will lead to budget reform of experienced hire relocation policies.

Everywhere you look today, you see the elements of another “perfect storm” for recruiters. The economy is in a free fall. Companies are looking at ways to reduce headcount. Recruiting budgets are frozen. Those sought-after “passive candidates” are hunkering down to try to weather the storm, so they’re not taking your calls, if you’re even making them.

What’s a recruiter to do?

Focus on retention. It’s at times like these that organizations earn their employees’ loyalty. As the saying goes, this isn’t my first rodeo. I’ve seen the market soar and tank. The way companies treat their employees in stressful and frightening economic times goes a long way in determining who comes out of these difficult times better positioned to re-take greater market share.

Kevin Wheeler had a great piece earlier this month about framing the future you want and identifying four things you can do now to make that future more likely. But there’s more that we can do internally. I agree with Kevin that keeping in touch with our best candidates and keeping our pipeline active is critical. The importance of using this time to plan and educate ourselves for our own future success cannot be overstated. But one of the first things I learned as a recruiter is “If you’re not recruiting your best people, someone else is.”

Now is the time to make sure that you are reaching out to your own best people and involving them in conversation. You’ve seen economic downturns before and so have they. We know that we’ll come out of these things, and when we do, the phones will start ringing.

Think about it. When the market starts going up again and senior management is confident that the upswing is for real, you’re going to be asked to go out and get the people you need to sustain your company’s participation in the improving marketplace. But so is your competition — and don’t think they don’t know who the best people in your organization are. They’ve got a list of people in the industry that they covet. They may even have had conversations with your people at conferences or on their own.

You need to be reaching out to your best people now. Not necessarily to reassure them, because you can’t promise anyone anything, but to keep the internal lines of communication open. This is no time for HR to take on a bunker mentality behind closed doors. Hiding in your office is never a good idea. You don’t want to start rumors that could actually stoke people’s fears.

Jim: Where are all the HR people?
Joe: They’re in their offices with the doors closed.
Jim: The economy is real bad. They must be planning a downsizing.
Joe: Uh-oh, you’re right. I’ve heard that a lot of companies in this area are cutting jobs. As soon as things pick up I’m going start looking. Better to do it to them before they do it to me!
Jim: You got that right. Hey Bill, did you hear that there’s going to be a RIF soon?

And that’s how it starts. You don’t want to do is give people one more reason to listen to calls from your competition. The other question that comes to mind goes a little differently, but it’s another reason to be focusing on the positive things you can do when things look bad.

Joe: We’re really taking a hit from this economy. I hear a lot of companies are considering layoffs.
Jim: Yeah, HR is probably making a list right now.
Joe: How come you never see HR people on those lists?
Jim: Yeah! I mean we’re not hiring anyone right now. What are they doing? Why not lay off a few recruiters and save the jobs of the people who do the real work around here?

Doesn’t sound pretty, does it? That’s why you’ve got to get out there and be visible. I’ve heard that nobody wants to see HR walking around during a downturn, because people are afraid that we’re looking to see who’s working, who’s busy, and who’s not. Don’t let that deter you. Get out there. Be open and honest in talking with managers and their best staff to see what you can do to help alleviate people’s fears at a time like this. Encourage managers to have staff or town-hall style meetings with employees to give them a chance to speak openly about their concerns. HR needs to be side-by-side with managers at these meetings.

To be sure, there will be some companies letting people go, and yours may be one of them. But no matter what, no matter how deeply you cut, you’re not going to lay off your best people. These are the most valuable assets your organization has. Unless you’re turning out the lights and rolling up the carpets, as long as your firm is around, you want them working for you. These are the people who make your company successful, and will again in the future. That’s why you need to be re-engaging them now, when things look bleakest. You can’t give them double-digit raises or six-figure bonuses, but give them what you can, and possibly what they crave most: open communication.

Remind them of how valuable they are to the company. Stress that management is exploring options how best to weather this storm. Ask for their best ideas of what the company can or should do right now, six months down the road, or a year from now when things are different. Because things will be different. Maybe better, hopefully not worse, but certainly different. Ask them what they think is going to happen. They are closer to the front lines and therefore may be hearing different things than the people in the executive suite are hearing. Treat them with respect and get their input. After all, these are your best people. The same things that make them good at their jobs may also give them insights about where your industry is going.

I brought ideas like this to one company I was working with when they were considering layoffs. I asked senior management what they were planning to do for those employees who remained after the reductions. One manager said, in all seriousness, “We don’t have to do anything for them. They should be HTHJ. Happy to have jobs.” That organization did survive the setbacks it was going through, but has morphed and merged several times since. Many of the best people from that organization have left for the competition or to start businesses of their own. Sure the superstars made it through that round of downsizing, but as soon as it was over, they started looking.

Treating people with respect when things look worst is not just being nice to people, it’s good for business. These are the kind of people you’d have to pay a fortune to get if they were on the open market. Do everything you can now, while they are inside your doors, to keep them there. People are always less likely to look when the economy is bad, but the good people are just as likely to bolt if they see your company behaving badly in bad times. This is an opportunity for your organization to make its reputation. How many times have you heard companies boast about having been in business “X” number of years and never had a layoff? Companies point with pride at a record like that not because they’re nice but because it’s a recruiting and retention tool. They’re working to retain their best and most valuable employees.

Nucor Steel reduces executive perks and will even shorten the workweek from five days to four but doesn’t lay people off. It runs some of the most profitable and efficient steel mills in the world. Lincoln Electric guarantees jobs to employees with just three years of service and has not had a layoff since the 1950s. Its turnover rate is infinitesimal.

Many of us are recruiters, and our job is to find the best people to fill the vacancies in our organizations. But we are also human resource professionals. When vacancies dry up, we need to focus on other things we can do to add value to our organizations.

Get out there. Be visible. Retention is the most cost-effective form of recruiting. And the time to do it is now.

When the economic markets look grim, hiring is at a standstill, and budgets are frozen, perspective is what is important. As some have said, “When things are good, they are never as good as they seem. And when things are bad, they are never as bad as they seem.”

We should all use the pause in the hectic pace of the past few years to begin and frame the future we want when we emerge. And we will emerge. I am not sure when, of course, but within a few years we will be back at the global hiring process with renewed vigor and increased challenges.

The cry we all heard over the past five years has been that there was no time to plan, think, experiment, or implement new methods. Most of us used the methods we were comfortable with but just worked harder, longer, and faster than before. This is the opportunity to figure out how to do things differently.

Be Strategically Bold; Tactically Careful
The first step in dealing with the current situation is to sit down and plan out a 3-5 year strategic plan for the future of your recruiting function. Envision a new tomorrow where you can use the technology, processes, and learnings that have emerged over the past decade. Some of the technologies and tools include such things as social networks, blogs, wikis, and candidate relationship management tools.

The processes that have shown promise include less-restrictive internal mobility practices, real time candidate assessment, virtual job fairs and other virtual recruiting techniques, as well as more authentic candidate engagement using online communication tools.

This strategic planning process should be formal, should involve your team and other employees as well as outside people, if that is acceptable in your organization, and should be designed to force yourself and others to think outside the usual assumptions about talent and recruiting. If you have any budget, it would be wise to engage a facilitator who is experienced in this kind of activity. They can make the process robust and much more valuable.

By formulating strategies that use these tools and practices, you can emerge from our current morass with a roadmap for quickly trumping your competition.

At the same time, you need to act right now with fiscal caution and show your management that you are a responsible manager.

This means finding ways to conserve your budget by lessening the need for contingent labor, perhaps, or by reassessing your current practices and challenge why you do whatever you doing the way you do it. Try to find ways to be more efficient, without spending money. Cut back, but cut back where it will do you some good from a strategic perspective. For example, by reducing staff right now, you can position yourself to implement technology or bring in a person with a different skill set once things recover.

Your job is to balance today with several possible recruiting situations in the future.

Envision a New Workforce
The really best recruiting and talent leaders will sit down with management and have some open discussions about the desired workforce of the future.

Every recession is an opportunity to recalibrate, learn and decide on what skills and competencies are most likely to be needed as we emerge from this recession. I have lived through a few recessions now and one lesson I have learned is that out of each come new needs. As we emerged from the September 11 mini-recession, it was clear that security was the new issue and that we would need people with experience and skills not only in physical security but also in data and financial security. By anticipating these needs, recruiters could have had an edge on any competition.

Once you have even a blurry picture of the skills and competencies you may need, you can begin sourcing for these kinds of candidates and begin to populate a talent community with people whom you are getting to know and who are getting to know you.

Collaborate and Learn
Your third step is to collaborate and learn from your peers and from experts in the field. This is a golden opportunity to attend webinars, which are mostly free, catch up on the blogs you have wanted to read but didn’t have time to, and make a few phone calls to friends, colleagues, and others you may have heard of.

These calls can be partly social and partly learning experiences. Ask what they are experiencing, what they are doing to use this gift of time wisely, and what tools and practices they are considering. I have always found this kind of networking to be one of the best ways to learn about emerging trends and to get a calibration on where others are.

Everything you hear and learn can be used as part of your strategic planning process. You can get these colleagues to demonstrate what they have done and you can even experiment with many of the technologies for free or for a small amount of money. One of the best things about the past five years is how inexpensive software has become. There is really no excuse to not try blogging, wikis, or even social networking tools.

Focus on Candidate Engagement
The final step in your plan for the future is to carefully, authentically, and regularly communicate with all the best candidates you have. Experiment with tools like blogs, email, newsletters, Twitter updates – anything that might engage and stimulate the many potential candidates you should already have in your talent pools.

If you neglect them or just tell them that there are no openings now, you lose a resource that you have spent lots of time and money finding and developing. Better to be honest with them, let them know exactly what your situation is, and keep them updated regularly.

Invite the best to join you in a monthly phone call update (just like your financial people do for the analysts) or hold a quarterly webinar. Anything you do to maintain the connection with your candidates will pay itself back when times get better.

Economies will recover and the emerging world will be different and more challenging than ever. Use this precious resource of extra time wisely and well to frame the future you want.

Over the years, I’ve been involved in developing hiring tools for sales representatives in a variety of industries including high technology, financial services, industrial products, consumer products, auto sales, woman’s cosmetics, business services, medical products, pharmaceuticals, and healthcare.

Surprisingly, most sales managers make the same bad decisions, regardless of the product or industry.

Here’s the list of where most sales managers go wrong. Start eliminating these error-producing behaviors and just about all of your sales hiring mistakes will go away.

They think their job is unique. They’re not. There is a common sales process behind each one, that when understood can be used to benchmark any candidate’s past performance against.
They overvalue first impressions. First impressions don’t predict performance. People with great first impressions are frequently incompetent and people with marginal first impression often have a track record of great success. It’s best to measure first impression at the end of the interview and then determine how the candidate’s first impression affected their performance in consistently achieving quota. From what I’ve seen, the best sales managers don’t worry about first impressions, they worry about the candidate having a track record of achieving good sales results selling similar products, to similar buyers, in similar situations.
They overvalue their gut or instinct. This is only acceptable when the sales manager has a track record of hiring all top performers who all make quota in combination with very low department turnover. Emotions, intuition, or instinct are poor predictors of on-the-job success. A track record of past performance selling similar products or influencing similar buyers is a great predictor.
They don’t know the job. Sales is a process that starts with lead generation and ends at closing. Certain aspects of the process are more critical than others. If a sales manager doesn’t know what these are, it’s unlikely that he’ll be able to accurately assess them in the candidate. As a result, the sales manager shifts the decision criteria to first impressions and gut instinct.
They assume they’re great managers. Most great sales people aren’t great managers, yet this is the person most likely to get promoted. It takes a great deal of work to build, develop, and manage an effective sales team. As part of the assessment process, the sales manager has to assess the fit between her style of management and how each person on the team needs to be managed. This directly relates to Hershey and Blanchard’s situational leadership model.

Flipping this over, here are some things you need to do to achieve better results hiring sales reps:

1. Know the sales process from beginning to end before ever interviewing another candidate.

Whether the sales cycle is 30 minutes long or months, there are some typical steps that ultimately determine how successful the sales rep will be. Breaking your company’s sales process into these steps enables the sales manager to identify the critical drivers and then assess the candidate’s past performance against these. At a broad level most sales processes can be categorized into these big segments:

Prospecting and lead generation
Qualifying the lead and conducting needs analysis
Proving your product’s worth in comparison to the customer’s needs
Preparing some type of offer or proposal
Closing and negotiating the offer
Of course, there are multiple variations to this depending on customer need, the complexity of the offering, the type of buyer involved and how the buying decision is made, the dollars involved, budgets available, economic conditions and competitive positioning, to name just a few.

A performance profile summarizes these details in the form of a series of prioritized performance objectives including specific results and time frames. For example, a performance objective for a sales rep developing a new territory might have an objective like, “within 30 days prepare a detailed territory plan including target clients to meet.” A similar performance objective for a outbound telesales person might be, “within 30 days after completing the training convert 35% of all sales calls into minimum $100 orders.”

Once these performance objectives have been determined put them into priority order. The top two or three (out of 6-8) tend to become the critical success drivers. For example, conducting needs analysis with a decision-maker might be relatively easy, with the real key to success being the ability to get past a gate-keeper and arrange the meeting with the decision-maker. It is essential that the members of the hiring team understand these critical success drivers and then hone in on them during the interview. (Here’s more information on how to prepare performance profiles and interview for a wide variety of sales positions.) From what I’ve seen lack of understanding of real job needs is the primary cause of bad hiring decisions, not only in sales, but for all jobs.

2. Benchmark the candidate’s performance against the performance profile by asking about these issues:

Get specific details about how the person managed the process and how well they did.
Find out their track record of making quota and how they recovered when things went sour.
Walk through the sales process at a few major successful accounts and compare this to yours.
Walk through the sales process where the person was unsuccessful and compare this to yours.
Find out how the person learned the product line and compare this to yours from a complexity standpoint and the amount of training provided.
Go step-by-step through all of the team issues including managing and processing leads, orders, and pre- and post-delivery issues.
Compare your typical buyer to the types of buyers the candidate successfully handled.
Find out how successful the candidate was working for different sales managers, ask about their styles, then compare these to the hiring sales manager’s style.
3. Benchmark the candidate’s past performance to the performance profile, especially against the critical success drivers.

We use our 10-Factor Candidate Assessment template as a guide to evaluate the candidate against ten factors we’ve seen to be strong predictors of on-the-job success.

For sales, the primary keys to an accurate assessment include a comparison of the sales process, the types of buyers involved, the sales cycle, the complexity of the product and associated terms, and the degree of competition. Of course, the behavioral issues can’t be ignored including persistence, learning the product line, organizational skills, and team leadership, among others, but these are secondary to having a track record of sales success in a comparable situation.

4. Assess managerial fit.

This is probably the most important, yet it is almost always overlooked. A sales manager must be dedicated to training and developing his or her sales team. This requires significant direction, on-the-job training, constant follow-up, the ability to motivate others, and involved planning.

In situational leadership terms these are the classic Director and Coaching styles. A self-managing Delegating style rarely works in sales, especially for a new hire. A Participating style involving territory planning and target account tactics would be appropriate for an experienced sales person who can achieve his goals with limited direction and support.

From what I’ve seen too many sales managers aren’t as involved as necessary to keep their teams on track. If a sales manager isn’t willing to devote 100% of her time to developing and managing her team, even it’s comprised of good people, it will underperform. That’s why choosing the sales manager is the first step in getting the sales hiring process right.

As part of the sales hiring process, we also recommend the use of some type of cognitive and behavioral questionnaire for all finalists. While there are many of these tests around, we’ve been using Profiles International’s for over 20 years with great success.

Knowing that some type of formal test is being used keeps the interviewers more focused, increasing overall assessment accuracy.

Hiring sales people is relatively easy if you don’t get emotionally involved. This alone will eliminate many common hiring mistakes. Regardless of your underlying sales process, the process of hiring great sales people is exactly the same whether you’re selling ERP software or part-time vacation villas. That’s the real secret to hiring great reps.

This year in the recruiting industry there has been a lot of talk about how companies are tapping into Web 2.0 technologies to enhance their recruiting. But how is the candidate community also using these technologies for their own purposes, and what impact is it having on our recruiting strategies?

Web 2.0 Candidates Are:
Faster. Candidates can gain access to more available jobs within minutes on any day.
Smarter. Access to salary, compensation, and corporate performance data is everywhere.
More Connected. Social networks help candidates identify insiders at any employer before or after they apply for any position.
Web 2.0 Candidates Are Faster
When job boards came on the scene 10 years ago, they made accessing available job information much easier for candidates. No more digging through the classified section of the Sunday newspaper, crafting up witty cover letters on fluorescent letterhead to get attention and postal mailing resumes. Remember when we’d put our fax numbers on our ads? Come on: how many candidates really had fax machines in their houses? Today, there are “job aggregators” such as indeed.com and simplyhired.com which put all the jobs from multiple job boards into a single search engine that stream directly into any candidate’s personal home page on Google via RSS feeds every day.

I think one of the main reasons that recruiters are after “passive candidates” is that we think we have more time to get them through the interview process, versus “active candidates” who machine-gun apply from job boards to a dozen jobs on any Monday. With the latter, we have to get them setup with an interview within 24 hours and make a hiring decision within two to four days. That’s how fast the market is moving with so much job data available online.

Web 2.0 Candidates Are Smarter
In addition to having access to an ocean of jobs, most candidates tap into salary and compensation data via sites such as payscale.com and/or salary.com. Not to mention that the younger generation of workers aren’t shy about sharing their comp levels in the lunchroom or over beers, unlike our parents’ generation who considered salary discussions to be so taboo they would only share this information with the IRS when filing their annual tax returns.

Many recruiters have candidates show up with a salary report printed from one of these salary sites and demand that their pay be at or above the level on the report. Candidates don’t care if our job descriptions aren’t perfectly matching the ones on those websites; they just see the numbers and get an expectation that’s usually out of line with our compensation levels. Regardless of how you handle this situation in your interview process, employers are under pressure to know how their pay grades compare to other major employers in their markets.

Web 2.0 Candidates Are More Connected
Remember when you would get an applicant resume, see which companies a candidate previously worked for, and then quickly find which of your internal employees had worked with the applicant in the past, in order to get “inside information” to determine if they were a good or bad prospect? (Never mind that 51% of people will comment positively or negatively on someone because of how they liked their personality — and not their actual work performance.)

During the interview process, candidates were lucky to run into a former colleague in the hallways. Or if they get lucky in the interview, they will discover who they might know in common with the interviewing managers and try to discover which “moles” they could find within the prospective company, which would help them do their own due diligence on the employer — not to mention that they will try and gain advocates to help them get the job should their interest grow.

Well, because of the growth of social networks (Facebook, MySpace, LinkedIn, Jigsaw, and many more), the minute most candidates apply for any job (and sometimes even before they apply for a job), they can now instantly see who they know at any prospective employer, all the way back to their old high school or college buddies.

This tilts the access of information toward the candidate community — who can now see if there are bad previous bosses or old enemies working within your company, which they may wish to avoid. The candidates’ reasoning will be if your company hires personalities the candidate disliked, it indicates that your culture prefers those types of individuals, which will have an impact on your employer brand whether you get a chance to enter the conversation or not.

This puts a new pressure on employers to create a working culture that will attract these more web savvy candidates. These Web 2.0 candidates don’t believe most of our career sites’ language about having an exciting work environment. They want to find out for themselves (via networking) what it’s really like to work within the sub-cultures within our company, which are driven by management personalities and business cycles which are exciting to certain candidate types, and a turnoff to others.

After a lengthy screening process, the hiring committee feels it has found the right candidate for the company. Now comes the tricky part: how do you design an offer and go through the offer stage of the process without damaging the relationship with the candidate?

Many companies are not prepared to go through the offer step of the process. As a result, they damage the relationship with the candidate. This leads to one of two unfortunate conclusions. Either they lose the candidate or the candidate comes on board, but with scar tissue. Applying some of the best practices from the sales world into a sales talent screening program helps to avoid that scenario.

The offer stage of the hiring process parallels the proposal phase of sales. Best practices in sales say that you don’t present a proposal until a thorough needs analysis has been completed. If a sales person is presenting a proposal to a prospect, he has acquired the information needed to design a solution, has discussed budget, has a full understanding of their solution requirements, and has set an expectation on pricing. This is certainly the case if the salesperson is going to be successful in winning the account.

Looking at this process in relation to the offer stage of the sales talent screening program, many of the same best practices from sales hold true. During the screening program, information needs to be gathered from the candidate to determine their financial requirements. Unfortunately, many sales talent screening programs focus exclusively on screening the candidate for fit, but do not consider the needs for the offer phase of the process. This leads to a last-minute scurry to mine the information from the candidate, or they design the offer blindly. Neither of those are best practices for the offer stage.

In sales, it is said that if you are going to lose, lose early. This prevents you from making a huge investment in a relationship that will not generate revenue. The parallel to screening sales talent is understanding the financial requirements of the candidate early enough to stop the process before over-investing in the relationship. There is no point in continuing a process with a candidate who requires a compensation level 25% above what you can offer. This probably seems logical, but hiring executives rarely focus on this as a de-selection element early in the process.

Just like discussing pricing with a prospect, the financial-needs discussion requires finesse. The candidate knows that you are asking questions about their financials, just like a prospect knows a sales person is fishing for budget information. The better-skilled salespeople tell their prospects, “I don’t want to waste your time by getting you excited about a solution that will not fit in your budget constraints…”

In much the same way, this discussion can be had with the candidate, “I don’t want to excite you about an opportunity that might not be a match for your financial needs. As you look at making a change in position, what thoughts have you given to your compensation requirements?”

With continued finesse, you can dig further into the mix of salary versus commission. Some candidates may rebuff this discussion as they feel the information will be used against them. In some instances, they are justified for having that concern. Hopefully, that is not the case in your company. We’ll come back to this point later. The bottom line is that the two goals of this phase are to gather information that allow you to formulate an offer and to de-select those candidates whose requirements exceed your financial package.

In sales, the proposal phase should not be like a magic show. The prospect should not be shocked by what is included in the proposal. In essence, the proposal is the documentation of what has already been discussed. No surprises. The same holds true for candidates. The time to review the compensation plan details is not after they are hired, or even at the offer stage. The compensation plan should be reviewed at the point where you have a genuine interest in pursuing the candidate and they have a complete enough understanding of the company that they will be able to comprehend the compensation plan.

One of the core requirements associated with any process is that it is measurable. The offer phase of the sales talent screening program should be measured statistically to determine effectiveness. The key statistic is number of offers made versus ones that are accepted. If the acceptance level is less than 80%, the process should be reviewed by asking the following questions.

At what point of the process are the candidate’s financial requirements reviewed?
When it is known that the candidate’s financial requirements exceed the package, is the candidate removed from the process?
At what step is the compensation plan reviewed with the candidate?
In what level of detail is the compensation plan reviewed with the candidate?
How often is the initial offer to the candidate rejected, and subsequently, negotiated successfully?
The last question in the list above ties back to my opening position about damaging the relationship. Again, this ties back to lessons that can be learned from sales. Many years ago, a procurement training specialist shared a pearl about the counsel he gives to salespeople who ask about pricing strategy. He said, “Provide us with the best pricing that you feel comfortable providing and either way you are happy.” This always puzzled salespeople so he explained further. “If you provide your best pricing and are selected, you are happy because you won the account. If you are not selected because we found lower pricing elsewhere, you are happy because you would not have been happy at that price point. Again, either way you are happy.”

Consider this when making an offer to the sales candidate. Develop an offer based on what was learned from the candidate that represents the best offer you are willing to make. Early in the process, tell the candidate that you don’t negotiate offers, but rather put your best offer on the table upfront. It demonstrates a professional message to the candidate and reduces their fear of attempts to lowball them. When companies negotiate offers, while they may “win” the candidate, they damage the relationship. This person is onboarded with the worst scar tissue of all, a lack of trust. The salesperson will always be on the lookout for the company to try to cheat them.

As with any component of the sales talent screening process, preparation is the key to success. Organize your team and design a process that achieves your desired results. This will allow you to create longlasting, fruitful sales marriages.

Dating and recruiting have a lot in common. Learn how to improve your recruiting efforts by applying the most common dating rules.

Dating rule #1
First impressions are critical.

Recruiting application:
Differentiate yourself. Resist the “I have a great position for you” especially if you have never spoken to them.

Dating rule #2
Don’t believe everything you see. We have all heard stories from people that signed up for an online dating service and were shocked when their date was two feet shorter and 10 years older than the profile.

Recruiting application:
Candidates exaggerate their strengths and skills and down play their weaknesses. Do not assume anything. Prescreen, interview, administer assessments, and call the references before you present the candidate to your hiring manager.

Dating rule #3
Play hard to get. Desperation is the world’s worst perfume.

Recruiting application:
If you make a huge fuss over the candidate and beg them to interview, you will diminish your negotiating power.

Dating rule #4
Be selective. You can not change people.

Recruiting application:
Look for the red flags; don’t avoid them. It is better for you to uncover any candidate weaknesses or issues than your hiring manager discovering them. Your name and reputation is all you have in this business.

Dating rule #5
Prepare for the date.

Recruiting application:
If your candidate has spent 20 minutes on the phone with you and takes time off work to come to interview, and then you ask them “so, tell me what you want to do?” — you are wasting the candidate’s time. You should have notes on the candidate’s resume that you want to clarify, and if appropriate, the company profiles that best match what your candidate’s needs.

Dating rule #6
Don’t talk too much. People who express the “enough about me, what do you think about me?” attitude sit home alone, a lot.

Recruiting application:
The candidate should be doing most of the talking. Assess what the candidate has to offer, what they need, and then set expectations of how you will work together. Let the candidate talk about the interview before you disclose the hiring manager’s view. If you blurt out “they love you, you are the best candidate they have ever met!” — what do you think happens to the candidate’s salary requirements?

Dating rule #7
Follow up with your date.

Recruiting application:
As an industry, one of the biggest complaints we get from candidates and hiring managers is the lack of communication. No news is still considered news to the candidate; make sure you keep your candidate in the loop.

Dating rule #8
Don’t be afraid to end the date early.

Recruiting application:
Prescreen carefully, ask the hard questions, and always tell the candidate the truth. If they are not going to fit into your recruiting focus (skills, salary expectations, location, etc.), coach or make suggestions regarding who may be able to help them in the market.

Dating rule #9
Improve your odds by hanging out where (like) people hang out.

Recruiting application:
If you are recruiting technology talent, sign up and participate in technology activities in your market. Volunteer at association meetings to check members in: you will meet every attending member, every meeting.

Explain to people you meet that there are two types of people you would like to be introduced to: those who are leaders in their field and are looking for an opportunity and those who are leaders in their field and are not looking for an opportunity right now. You are an expert in your market, so people who are not looking now would still benefit from knowing you and the people in your network.

Dating Rule #10
They will not buy the cow if they are getting the milk for free.

Recruiting application:
When you agree to represent a candidate, you are entering into a business agreement. You need to set clear expectations of how the process must work. If the candidate will not agree to the terms, they are not committed to you, so turn them loose.

For most recruiters the make or break moment comes at the end of the process, when it’s time to negotiate the offer. A successful negotiation means that the process concludes with a hire, and the recruiter rides off into the sunset.

But a successful negotiation doesn’t mean coming out on top with a low-ball offer that gets accepted. That can cause the candidate to get turned off and in the worst-case result in the candidate walking away. Even if accepted, it could leave the candidate with a sour taste in the mouth and essentially starting off with a negative attitude toward the employer. An overly generous offer on the other hand is a waste of the employer’s resources and can upset internal equity. Getting it right is not easy as few recruiters are trained in negotiating.

The number of books that have been written on negotiating can fill a large room — several thousand are in print. But an easier approach can be discerned from recent research at Northwestern University. A study by Prof. Adam Galinsky and his colleagues suggests that a powerful way to influence the outcome to be closer to a win-win situation is to view the situation from the candidate’s perspective — also know as the perspective-taking approach.

What this means and how it works is explained below, but the research has demonstrated that recruiters using such an approach consistently achieve the highest level of economic efficiency, without sacri?cing their own material interests. They produce a better overall outcome for both sides.

Getting Inside the Candidate’s Head

The perspective approach means try to get inside the candidate’s head. To achieve an understanding of the candidate — their motives and likely behaviors — consider the world from their viewpoint. Basically, put yourself on their side of the table. This is not as ridiculous as it may appear. The research demonstrates that recruiters adopting such an approach achieve the best possible outcome close to half the time.

To be able to do this well recruiters need to do their homework before arriving at the negotiation. First, have an understanding of the likely issues. These always fall into three categories.

1) Distributive: issues for which the parties’ preferences are diametrically opposite. For example, the candidate wants a higher salary and the recruiter wants to pay a lower one.

2) Compatible: issues on which the parties’ preferences are identical. For example, the job location.

3) Integrative: issues on which the parties have different high and low priorities. For example, bonus and vacation time. The candidate may care more about the bonus amount because of a belief in her own ability to earn it. The recruiter may care more about getting the candidate to accept a smaller amount of vacation since that represents guaranteed income.

The solution to the disagreements is not to split everything down the middle, but rather to try and maximize the joint outcomes. That requires having a good idea about what makes the candidate tick — taking their perspective. Recruiters need to make an effort during the interview process to gauge what is important to a candidate. An assessment can help to fill out the picture, but even without that it’s important to pick up cues about what drives a candidate. That does not mean to ask questions that are unrelated to the job, but to probe for what a candidate considers important or not.

Head not Heart
There is a danger that a recruiter attempting to take the candidate’s perspective may end up empathizing with them — that is, show compassion for the candidate’s situation. Successful negotiation, especially where economic outcomes are involved, do not require having an emotional connection with the other party. The research demonstrated that empathizing recruiters achieved the poorest individual outcomes, and the gains went almost entirely to the candidates.

It’s better to “think for” than to “feel for” the candidate. It is more bene?cial to get inside their heads than to have them in your heart.

Conclusion
Taking the perspective approach is easier said than done. It requires serious effort to try and understand a candidate, based on a lot of information that may not be readily available to the individual handling the offer negotiation. The more people who are involved in the selection process, the harder this gets, especially since most interviewers do a poor job of documenting what they learn about a candidate. Recruiters may also be constrained by the extent of flexibility they have in negotiating particular issues.

That being said, the Galinsky research does show that a failure to take a disciplined approach to an offer negotiation will produce a poor outcome for all concerned. Ultimately, organizations that fail to recognize this will suffer the consequences of losing good talent.