Recruiting in China

Summary: With record numbers of college graduates and an economic slump, fresh college grads are beginning to favor jobs in civil service or at state-owned enterprises rather than at foreign and other private companies. But they’re finding nepotism to be a critical barrier to entry.

The majority of university students graduating this year were born in 1990 and 1991, meaning the “Post-90s Generation” is entering the real world. But this entrance hasn’t been a very welcoming one.

A record 6.99 million-strong graduating class paired with an economic slump has resulted in what’s been deemed the worst job-hunting season in history. As of the beginning of June, only 33 percent of these graduating seniors had signed employment contracts.

Many of those Post-90s graduates are still watching and waiting. In order to satisfy their families (and perhaps potential spouses) they need to find a good secure job. Surveys show that the most preferred jobs are civil servant posts or in state-owned enterprises. However, these jobs often depend more on personal connections than actual skills.

“The challenges are big for individuals relying on their own efforts to find their ideal work and life,” said Tang Jun , secretary-general of the Social Policy Research Center at the Chinese Academy of Social Sciences. “Most people don’t feel much hope.”

The Nepotism Hurdle

Chen Ming was born in 1991 in a village near Nanchong, Sichuan Province and is graduating from China Agricultural University in Beijing this year. He was recently struggling to find a job and contemplating whether to stick it out in Beijing or go back to his hometown. He failed the entrance exam for graduate school and had been rejected by several companies he applied to.

“My parents didn’t have good opportunities in their time,” Chen said. “They’re hoping for me to make a change.”

A survey by the William Mercer consulting agency shows that the number of graduates this year increased by 190,000 compared to 2012, but company recruitment has dropped. Of the companies surveyed, 45 percent have no campus recruitment plans this year, and among those who are recruiting, only 70 percent are offering as many jobs as they did last year.

Meanwhile, the scale of civil servant recruitment is expanding. The number of civil service positions was 9,763 in 2011, 10,486 in 2012 and 12,927 this year. The number of people taking the civil service exam went from about 900,000 in 2011to 1.12 million this year.

Zhao Qi, another graduating student in Beijing, doesn’t feel the same pressure Chen Ming does. His father is an official in a northeastern Chinese city. This summer Zhao plans to travel in the U.S. for a month and then continue his study in Hong Kong for a year.

One of Chen Ming’s classmates has had similarly good luck. The classmate’s father, also a government official, has secured him a job in Jiangsu at China Construction Bank. But obviously Chen’s father, who lives in a simple village, can’t provide similar assistance.

“There’s nothing to envy,” Chen said. “Destiny is controlled by our own hands.”

When he’s applying for jobs, Chen tries to choose those that require real skills and don’t rely on nepotism; like sales positions. Chen figures that even if others have guanxi (connections), they won’t go for jobs with heavy sales performance pressure.

Finally, Chen found a job with Beijing New Building Material (Group) Co., Ltd., an A-share listed company subordinate to a state-owned enterprise. The pay is about 40,000 yuan annually plus sales commission. Chen is very satisfied with the offer and is optimistic about the company’s promotion mechanism.

Is Guanxi a Skill?

Su Fan, who works for a state-owned bank in Guangzhou, has been assigned some special “interns” to work for her over the past four years. These interns have included the daughter of a public security bureau head in Xiangtan and the son of a government agency head in Zhuhai. “I wouldn't dare make them work overtime,” Su said. “If they did something wrong, I didn’t dare say anything about it.”

Su points out that the fathers of the Post-90s generation were born in the 1960s. And when those born in the 1960s came of age in the late 1970s, they ran into many great opportunities - like the reopening of the Gaokao college entrance exam and Reform & Opening Up. Those who seized the opportunities have now become society’s elite. “This means those born in the 1960s who are doing well can provide more opportunities for their children,” Su said. “On the contrary, for those born in the 1960s who aren’t doing well, their children have difficulty competing with others.”

Su got her job at the bank through open recruitment in 2007. She’s noticed that since then, people have rarely been hired this way.

University students’ employment hopes seem to be going back “within the system.” Data from ChinaHR.com showed that a year ago, 21 of the 50 employers that university students said they were most satisfied with were foreign companies. But this year, only 3 were foreign, with most of the rest being state-owned enterprises.

Young people whose parents are officials are often called guan er’dai, or “second generation officials.” When Zhao Qi, the student who will study in Hong Kong, heard people calling him this, he said, “It’s not like that,” and then after a short pause, “it’s not like my parents are ministerial-level officials or anything.”

Zhao admitted though that his parents have provided him with broader opportunities and a smoother path to success. After he finishes his study in Hong Kong, he plans to let his parents arrange a job for him in a state-owned enterprise. “Compared to places like foreign companies that rely purely on ability, I have more advantages,” he said.

Zhao says that personal effort is the most important thing while in school, but when you go out into the real society, guanxi is more important than anything. He also says it’s reasonable to get help from parents. “I have these resources, so why not use them?” he says. “Resources also reflect one’s ability.”

Tang Jun from the Social Policy Research Center disagrees. “Guanxi cannot be regarded as personal ability,” he said. “Young foreigners aren’t willing to do this, even if their parents have money, they don’t want to rely on their family.”

“Guanxi is social unfairness,” he added.

A report on China’s social mobility released by the Chinese Academy of Social Sciences in 2004 found that children of cadres were 2.1 times more likely to become cadres themselves than those whose parents weren’t officials. And a 2012 Tsinghua University survey showed that the starting salary for university graduates with officials for parents was 13 percent (about 280 yuan per month) higher than those whose parents weren’t officials.

Returning to “Inside the System”

Every year there are many fresh graduates like Chen Ming who have no guanxi but still want to get “inside the system”. However, their route tends to involve starting at entry level positions, working tirelessly and tolerating inferior treatment compared to those who inherited their position “inside the system.”

Zhou Boyu graduated four years earlier than Chen and also comes from Sichuan. He worked for a company under China National Petroleum Corporation for two years, but wasn’t ever able to become a formal employee. He resigned his job in anger and proceeded to write a long novel criticizing nepotism within the system. His novel was only circulated among his classmates, and in the end, he went to work for the district government of his hometown, thanks to the help of contacts his family had.

Chen Zhiwu, an economics professor at Yale University, says that in societies with a high proportion of the economy controlled by state-owned interests, there’s a wider wealth gap and more severe social unfairness. That’s because such a society relies more on power and connections to allocate resources.

“This is the source of our struggles and pains,” said Zhou Boyu. “If you don’t get ‘within the system’ through guanxi, then you’ll live a very bad life. But if you do enter the system you’ll find a serious conflict of values.”

Tang Jun says that in the 1990s, especially in Guangzhou, leaving a secure job in order to do business was a good choice. “Now that people see the economy slowing, the advantage of private enterprises has gradually become smaller,” he says. “The salary isn’t much higher than that of civil servants, and the job isn’t stable.”

Wang Qiu, who was born in the 1980s, said that while she was at university she always looked down on those who took the civil service exam. She had been determined to become a lawyer since she was a child and after graduating from law school she managed to become an assistant at a big law firm. However, the long working hours and low pay killed her enthusiasm. Two years later, she decided to take the civil service exam.

At a class reunion, she joked with her former classmates saying that she never thought she’d make this move. Unexpectedly, many of them had the same feeling. One of her classmates had chosen to work as a civil servant in a prison in Yibin, Sichuan rather than work for a private company in the provincial capital of Chengdu.

This year the MyCOS research institute released its 2013 employment blue book. It reported that for those who graduated from university in 2009, the work units with the highest degree of employment satisfaction were government agencies and scientific research institutions.

Fang Xiaoya was born in 1984 and now works in the human resources department of a privately-owned education institution in Guangzhou. Lately she’s gone to several cities to recruit, but has only received a few CVs. In the beginning, she didn’t understand why. “Shouldn’t Guangzhou be a popular coastal city that many people yearn for?” she wondered.

Later though, several parents of graduating seniors called her to ask if Guangzhou’s home prices were high and if the company would help subsidize the purchase of a house. Fang came to realize that the importance of a house was greater than the work itself.

The Adventurous

Wang Hongting graduated from the architecture department of South China University of Technology and rejected an offer from a state-owned enterprise. He chose instead to work at a private real estate company since the boss valued him and there was more room for promotion and development. “Perhaps the income of officials comes more quickly, but it doesn’t suit my personality and lifestyle,” Wang said.

The father of Li Yijie, a third year student at Beijing University of Posts and Telecommunications (BUPT), works at an oilfield in Dongying, Shandong Province. The oilfield offers a favorable hiring policy for children of employees, so many of Li’s old Dongying classmates chose to study at China University of Petroleum so they could be assigned good jobs after graduation. Li’s parents wanted her to go this route, but she refused. “I don’t want to go back to my hometown,” Li said. “I want to leave this place and see the world.”

Li chose to study information engineering at BUPT. Most of her department’s graduates have gone to work for China Mobile, China Telecom or China Unicom. But Li chose an unusual path. She fell in love with internet entrepreneurship and started a small website with a few classmates. It was later unexpectedly bought by an e-commerce company in Beijing. Now Li is developing products in a new company while she finishes her studies. “My parents now support me very much,” she said. “They think I’m very brave.”

Li plans to stay in Beijing after she graduates since it has a good environment for starting an online business. With her qualifications, it wouldn’t be hard to get a job for a well-known internet company like Baidu, but she has more of an inclination toward entrepreneurship. “In a newly-founded company you can do everything,” she said. “It forces you to learn. One can grow rapidly.I like this kind of situation.”

Her colleague Wang Dong has the same idea. He just graduated from BUPT and gave up a job offer from Baidu for 200,000 yuan per year so he could go to the company where Li works. He says the most important reason is that he’d be no more than a cog at Baidu, whereas at a newly founded business, he can create important technology and seriously impact the company’s development.

(At the interviewees’ request, Chen Ming, Su Fan, Zhao Qi, Wang Hongting and Wang Qiu are pseudonyms.)