The Global Crisis' Impact on China's Job Market

There is a debate about the potential impact of the global economic crisis on China's job market and economy. In order to provide a local angle I have conducted an interview with one of China's most promising entrepreneurs, Shaun Rein. Shaun is the Founder and Managing Director of the China Market Research Group (CMR).
##CONTINUE##
How do you feel the economic crisis is influencing the Chinese job seekers?

I remain cautiously optimistic about China's economy in the short-term and very optimistic long-term. Several industries will face difficult times in the next 6-12 months, such as export, auto and real estate. However, sectors like digital marketing and online games will continue to be very strong in 2009. Young consumers we have interviewed indicate they are also very optimistic but are becoming more realistic about their salaries. Salary levels for entry-level positions will be lower than last year, and salary increases will be much more reasonable than in years past when many workers expected 10-25% salary increases.

Many companies that we interviewed in the past few years have indicated that the number one long-term concern in operating a business in China was how to find and retain good people.

Do you feel any changes in candidate's quality or behavior? Do you feel any change in your current team behavior?

Absolutely. My firm now for instance has much better access to talent as big global consulting companies like McKinsey and Bain are slowing or even freezing recruitment efforts.

A lot of multinationals like Yahoo (YHOO), Google (GOOG) and Microsoft (MSFT) are slowing hiring all across the world and this gives companies that focus on China and which are well-capitalized like us a great advantage. This is the best time to hire. We doubled our office space last month, and we will hire much more.

How do you feel the economic crisis is influencing Chinese Recruiters? Do you feel any change in trends with your customers regarding recruiting in China?

Many Chinese companies are still hiring, especially in financial services as they try to recruit top talent from Wall Street. National champions like Lenovo (LNVGY.PK) and Huawei will continue to grow globally.

Successful internet companies like AliBaba, Sina (SINA), Sohu (SOHU), Baidu (BIDU), Shanda (SNDA), Netease (NTES), and Tencent (TCEHF.PK) will continue to grow and recruit. In other sectors that were hurt like export and real estate, companies will slow down recruiting and look for more cost effective recruiting channels.

What are the channels you currently using in China in order to recruit? What challenges do you face?

We use a lot of online services.

We use Meijob.com, 51job, ChinaHR, and many BBS websites. About one third of our team is recruited by using these online channels, one third we recruit directly in the campus and one third by using our contacts and employee referrals.

We also tried executive search companies in the past but didn't get good value for money propositions from any.

The challenges we face are:

Low brand awareness - When you contact the candidates, they are not motivated to work for us, because they don't know our brand as much as McKinsey even though we believe we are better than McKinsey at what we are good at. SME's have brand image problems when they recruit in China. It is difficult to get a good brand image with job seekers. Later when they join us they realize our advantages but the first attraction is determined by the brand.

High cost with limited results by using executive search companies - The executive recruiters we tried using in the past were a big problem. Their goal is to finish the project as fast as possible in order to get their compensation, which is about a third of the annual salary. This creates a conflict of interest. On the other hand the retainer cost is very high on global basis comparison. It was also very hard for us to convince the executive search companies to work for us on mid tear managers with annual salary levels lower than 50-60 thousand USD per year. These are the reasons we mainly use referrals to recruit high end talents and avoid using 3rd party recruiters.

Candidate's limitations - A lot of Chinese are very talented but they didn't learn to be analytical when approaching and solving problems. So we teach them in-house through our CMR Academy and through mentorship. As a result, we have a top-flight team and our employee attrition levels are very low.

What do you think are the major problems you face with the current online job channels?

By far the number on problem is Relevancy and quality of the candidates - The resume we receive are too generic and it seems like job seekers are applying to too many jobs… Many job seekers are lazy, so they just apply to many positions without reviewing the job specifications of the position and check if they fit the positions. Many young graduates are also very nervous so they just send their jobs to any position they can just to get a chance to be interviewed. Sometimes they don't know who we are when we contact them, because they apply to so many positions without really reading which company is recruiting…

What solutions can solve these problems?

The job board should make it more difficult to apply to too many jobs. Maybe an automatic screening mechanism will be able to do it. Job seekers should be educated to stop applying to positions they don't fit, because it is not effective.

-----------------------------
BY Barak Paztal
Source：Seeking Alpha