Recruiting in China

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.

Foxconn says a recruitment freeze is not due to slowing production of the iPhone5.

Foxconn, the huge company that makes high-tech products including the iPhone, said Wednesday that a recruitment freeze at its vast facilities in China was not due to slowing production of the iPhone5.

"Due to an unprecedented rate of return of employees following the Chinese New Year holiday compared to years past, our company has decided to temporarily slow down our recruitment process," said a Foxconn statement Wednesday.

"This action is not related to any single customer and any speculation to the contrary is false and inaccurate," the firm said.

Some dispute that explanation. A story Wednesday by the Financial Times based in London said the hiring freeze comes amid poor iPhone5 sales.

The Chinese website yicai.com, a financial news site based in Shanghai, reported that Foxconn facilities in central China's Zhengzhou and southern China's Shenzhen have stopped recruiting new workers, but will employ more robots in the future.

Boosted by global demand for Apple's electronic, the Taiwanese manufacturer Foxconn has grown into mainland China's largest private-sector employer, with 1.5 million workers. So news of hiccups in its operations can spark market concerns worldwide.

Apple shares were down slightly to $452.60 Wednesday morning.

Many employees are not at work this week due to Chinese Lunar New Year. The annual New Year festival, falling this year Feb. 9 to 24, is a time when almost all Chinese factory workers head back for once-a-year visits to often distant hometowns.

The Shenzhen Evening News said that Foxconn had decided to stop recruiting three months ago. The recruitment center website for Foxconn in central China's Henan province carries a banner headline advising that the firm will not hire for the next half year.

With China's Spring Festival holiday winding to end, many migrant workers have already returned to their cities of work. But a large number of them are staying put at home for a while longer. It's posing a challenge for employers, who are acting fast to bring in more workers.

For many companies in China's east Zhejiang province, recruitment has to be done at train stations.

Here in Shaoxing city, migrant workers are stuffed with job ads the moment they step off the train.

Zhu Xiaofeng, recruitment staff of Jingdongfang Display Tech. Company, said, "Our production scale is expanding and we need an additional 50 workers urgently."

Wei Haifeng, recruitment staff of Zhende Medical Co, ltd., said, "We've been here twice and also the bus station. We hand out our advertisements and if they would like to work with us, we drive them to our company directly."

But many of these workers are coming back with a signed contract already waiting.

Employers have also been shouldering the rising cost of labour.

In southern city Shenzhen, the minimum wage for full time work has risen from 1500 yuan to 1600 yuan per month, a record high in the country. The new policy has drawn many workers to the city.

A browse through Shenzhen's recruitment sites shows employers often clearly lay out workers' welfares. And typical salaries vary from 2000 yuan to 4000 a month.

"There were fewer companies who recruited in the past years. But this year, there are more out there offering much better pay than before."

"We pay every worker 3 thousand to 4 thousand yuan a month. This is a huge burden for small companies."

But there are also optimistic voices from employers, saying the pressure of rising costs is driving industrial reform, which will benefit companies in their long run.

Governments in rural areas are harvesting the experience of overseas returnees to boost grassroots development.

Zhou Ti studied at the Conservatoire National des Arts et Metiers in France for more than two years for a master's degree in management.

The 27-year-old returned to China in 2010 and found a job at an investment bank in Beijing paying almost 200,000 yuan ($32,000) a year.

After working for the bank for two years, he decided to go back to his hometown in Hunan province where a county was recruiting overseas returnees for town-level positions.

Zhou signed a three-year contract with Changsha county last year and now works with Kaihui town's environmental protection office, largely dealing with policymaking and trying to reduce its vehicle emissions.

"I need to visit villages every day, see how households are following the rules, such as the ban on livestock excreting into farmland or ponds," he said. "My workmates and I also keep records of each household's waste sorting and we financially reward families that do well."

Although the work pays only 3,000 yuan a month, Zhou said he believes the job offers a good platform through which he can put his own thoughts into practice.

"The job helps me improve my ability to communicate with people," he said. "I want to keep doing the job if I can make some achievements."

Leaders of town and county authorities are enthusiastic about recruiting and retaining overseas returnees like Zhou.
Changsha county hired 10 returnees for grassroots posts last year. The recruitment attracted 112 applicants, labor official Yang Xige said.

All 10 had master's degrees or above and now have different village positions according to their majors, he said.
"We assess their performance twice a year," Yang explained. "If they contribute to economic and social development, we will introduce more overseas returnees."

Deng Ruiqi, also 27, is another recruit of the county's program. He spent four years in France and works as secretary of the Communist Youth League of China for Fulin town.

Deng's main job is to explain government policies to villagers. "Once I visited 70 households in two days. The work has helped me accumulate grassroots work experience that I couldn't have acquired from books," he said.

Deng successfully organized a gala in September, raising about 400,000 yuan from businesses and individuals to address the schooling problems of children from poor families.

Deng hopes the experience can help him get a position in higher-level government bodies.

Other places are also looking at overseas returnees.

Beijing's labor authority started to hire overseas returnees to be village heads in 2011. More than 30 applied for the posts, and five were recruited.

Song Xin has a master's in education from La Trobe University in Australia and now works as assistant to the head of Paifang village in Beijing's Chaoyang district.

"The premier obstacle I need to conquer is how to communicate with villagers," the 28-year-old said. "I told myself I am a farmer from the day I took the job."

He said by doing this, he can really understand what villagers are thinking about.

Song's job also requires him to mediate civil disputes. "Sometimes the work is like cracking a hard nut, but it helped me understand how to be down-to-earth, as well as the importance of dealing well with every small issue," he said.

Overseas returnees have a comparatively broad scope of vision and active thinking and their innovation is an advantage, but grassroots jobs are not yet major employment channels for them, according to the Beijing Municipal Bureau of Human Resources and Social Security, which is in charge of the city's recruitment of village heads.

Overseas returnees are less active in applying for grassroots positions and are less stable in retaining the work compared with graduates from domestic universities, the bureau said.

Among the five overseas returnees recruited in the city, three have quit, it said.

Liu Xin, a professor of human resources at Renmin University of China, said it's normal for overseas returnees to take grassroots jobs because the employment situation is tough. Many find it hard to get a job when they return to China, he said.

"Managing a village requires a deep understanding of the rural political situation, including grassroots democratic elections," Liu said. "It can take a long time."

Courses offered by overseas schools don't necessarily suit domestic jobs, he said.

Year of the Snake not seen as very auspicious for the Chinese economy

The peak season for job-hopping in 2013 came earlier than usual because of economic uncertainty.

Some employees started to consider moving on even before the Spring Festival this year, much earlier than the usual peak season in March and April.

The months after the Lunar New Year are traditionally the best to find a new job because companies have completed their recruitment plans for the year and consequently just released job vacancies.

The year-end bonus is another important motivation for job-hoppers who leave their positions after the festival.

But the situation is different this year.

Pessimism about the industries affected by the economic downturn encouraged employees to search for new jobs as soon as possible, said experts.

It forced businesses to start looking for new staff before the festival to cope with the exodus of existing workers.

Many enterprises adjusted their strategies in 2012 so it is understandable that employees are not sure about their company's future during this period, said Liu Xingyang, a senior human resource expert with ChinaHR.com, the Chinese subsidiary of Monster Worldwide.

Employees complained about chaotic management and started to look for new jobs earlier in 2013, he said.

About 27 percent of the job-hoppers said they were quitting because of their company's poor prospects, according to a report on job-hopping from ChinaHR.com.

Zhang Gang, a manager at a real estate agency in Beijing, said he started looking for a new job early on and hoped to settle down in one before the festival.

"I want to get an ideal position before the festival, also before plenty of other people start chasing just one job," Zhang said in January.

Zhang said lack of job security in real estate drove him back to the consumer industry, in which he used to work.

The 28-year old said his salary was 50,000 yuan ($8,035) a month during the good times but now its is less than 50 percent of that.

"This year's bonus will not be particularly attractive either," he said. "It is not wise to wait for it."

Many companies reduced pay rises this year because of fears about the economy, the main reason chosen by 26 percent of job-hoppers looking to move on, according to ChinaHR's report.

The recruitment agency interviewed a selection of businesses. Only 0.8 percent of them said they will increase their employees' salaries by 20 percent or more in 2013. The percentage was 2.7 percent in 2012.

The number of companies awarding pay rises between 11 and 20 percent also fell from 16.7 percent in 2012 to a predicted 11.2 percent in 2013, according to the agency's report.

Meanwhile, the continuous rise of the consumer price index, which measures inflation, caused employees' living costs to increase, leading to high expectations over salary rises to relieve financial pressures.

"If their expectations are not achieved, they will have to find new jobs," said Liu Xiangyang.

ChinaHR.com also discovered financial, real estate and electric appliance manufacturing industries have more job-hoppers compared with other industries so far this year.

Employees in the financial industry are more sensitive to rising incomes and they feel the need for a higher quality of life, Liu said.

Some have chosen to weather the economic ill winds, while some have decided to leave.

Wang Li, a 27-year-old woman who has worked for an accounting firm in Beijing for three years, said she was asked to take five days of unpaid leave by the end of 2012. She used to be too busy to take year-end leave in the years before 2012.

Wang said she had less work to do recently and was not sure about her year-end bonus, although she received a 20-percent salary rise last October.

However, she said she and her colleagues would try to keep their jobs.

"It is not a good time to be quitting the job because the whole industry faces economic problems and there are few job opportunities in the market at the moment," she said.

Wang has good reasons for believing that.

American Express Co, the US multinational financial services corporation headquartered in New York, plans to eliminate 5,400 staff jobs in order to cut costs and adjust its business, the company said on Jan 10.

Goldman Sachs Group Inc, the US investment banking firm, said in July last year it would cut 1,000 staff worldwide.

"Keeping one's current job is a wise decision just now," said Huang Yi, a 23-year-old woman who has worked for one of the so-called "Big Four" accountancy firms since July last year.

If the employees really want to change jobs, the automotive and retail industries would be good choices, experts said.

"The automotive market and retail industries will both be very active," said Max Price, a partner at Antal China, a United Kingdom recruitment and headhunting company.

He said there is lots of organic growth forecast within the sectors.

Companies in these industries want experienced people rather than fresh graduates, which will lure some job-hoppers.

But Price nonetheless suggested people should be cautious about changing jobs and should stay three to five years with a company before moving on to a new role.

"Job-hopping every two or three years is terrible for career development in the long term," he said.

The Chizhou Women's Federation hosted a job fair especially for migrant workers in Chizhou City in east China's Anhui Province, on February 5 and 6, 2013, providing a number of suitable opportunities for rural laborers, which benefited many local women.

The job fair had 30 stands providing services for employment and entrepreneurship. More than 30 employing units attended the job fair, providing more than 2,000 work positions, which attracted more than 2,000 rural laborers and migrant workers who had returned to their home town during the Spring Festival. More than 800, including about 250 women, signified employment intentions during the two-day job fair.

The Chizhou Women's Federation distributed more than 500 brochures publicizing policies about small loans for women, safeguarding women's rights, and fighting against domestic violence.

President of the Chizhou Women's Federation Tao Xulin and Vice President of the Chizhou Women's Federation Wang Cuixiang talked with rural women at the job fair, encouraging them to work near their hometowns. They also encouraged them to attend professional housekeeping skills training and widen their scope for employment.