China Employment Market Trends for Q3 2015

October 26, 20158:03 am1043 views

The Chinese economy is now facing challenges as it works to readjust its economy in the face of slowing growth. The employment market in China has been negatively impacted as the ‘new normal’ began to take hold of the economy during the second quarter of 2015.

The new normal reflects on the CIER (China Institute for Employment Research) score to trend downwards from 2014, considering the relative ease at which job seekers are able to find jobs in the labour market.

The findings for the third quarter of 2015 were released in CIER Employment Index Report, released by the China Institute for Employment Research at Renmin University in association with Zhaopin Limited.

A CIER index score of more than 1 indicates that confidence is high for job seekers seeking employment. A CIER index score of less than 1 indicates that confidence for job seekers seeking employment is low.

The CIER index score for a period is calculated with data from zhaopin.com by dividing the number of job vacancies during a specified period by the number of unique job seekers that apply to jobs during the same period. Key findings from the report are:

CIER index for the overall Chinese economy decreased during the third quarter of 2015 to 1.96 from 2.03 during the second quarter of 2015, indicating continued weaker employment confidence in the market.

Strongest employment confidence seen in emerging service sector

During the third quarter of 2015, e-commerce registered a CIER index score of 5.63, which was first among all sectors, followed by the funds/securities/futures/investment sector with a score of 5.33.

The CIER index for the ten best performing sectors were all above 2.5, demonstrating strong confidence in finding employment in these sectors. The CIER index for the ten worst performing sectors was lower than 1.0, demonstrating an excess of job seekers in these sectors.

Monthly CIER index scores adjusted for seasonality (PRNewsFoto/Zhaopin Limited)

Monthly CIER index scores adjusted for seasonality (PRNewsFoto/Zhaopin Limited)

The ten best performing sectors include finance and emerging service sectors such as e-commerce. The ten worst performing sectors were all related to traditional manufacturing and services.

10 Best Performing Sectors Q3 2015

Sector CIER index
E-commerce 5.63
Funds/securities/futures/investment 5.33
Insurance 4.51
Education/training/college 3.32
Real estate/construction/building materials/engineering 3.22
Agency 2.93
Logistics/warehousing 2.79
Professional service/consulting (accounting/law/human resource) 2.74
Traffic/transportation 2.71
Farming/forestry/animal husbandry/fishery 2.50

Ten Worst Performing Sectors Q3 2015

Sector CIER index
Accounting/auditing 0.44
Energy/mineral/mining/smelting 0.58
Aerospace research and manufacturing 0.62
Rental service 0.64
Electricity/power/water conservancy 0.69
Office supplies and equipment 0.70
Inspection/testing/authentication 0.71
Academia/research 0.72
Property management/business center 0.79
Environmental protection 0.82

The number of job vacancies and the number of job seekers where highest among private companies resulting in a greater employment confidence and a higher CIER index score for the sector.

Recruitment Demand from IT/Internet and Financial Sectors Continue to Increase

Total recruitment demand from the IT/Internet sector during the third quarter of 2015 increased 41% year-over-year. Recruitment demand from the e-commerce sector in third and fourth-tier cities increased by more than 100% year-over-year, while demand in the first, almost first and second-tier cities increased by over 50% year-over-year.

Recruitment demand from the online games sector in the second and third-tier cites increased by 72% and 130%, respectively, during the third quarter of 2015.

See: China Salary Guide 2015 for HR Professionals

Year-over-year change in recruitment demand from the IT/Internet sector across various regions in China in 3Q15

First-tier Almost first-tier Second-tier Third-tier Fourth-tier Eastern China Central

China

Western China Bohai 

Rim

Yangtze River

Delta

Pearl River

Delta

IT/Internet 32% 44% 52% 86% 85% 38% 56% 49% 31% 40% 41%
IT service(system, data, maintenance) 5% 6% 18% 70% 47% 6% 21% 16% 8% -5% 13%
Computer software 16% 30% 40% 47% 6% 21% 34% 39% 15% 20% 28%
Computer hardware -2% -5% 10% 7% 27% -1% 6% 0% -10% -7% 13%
E-commerce 52%% 74% 72% 11% 121% 61% 82% 76% 51% 69% 58%
Online games 11% 32% 72% 130% 14% 17% 66% 14% 16% 22% 5%

Total recruitment demand from the financial sector increased 29% year-over-year during the third quarter of 2015. Recruitment demand from the banking sector increased 45% year-over-year, while recruitment demand from the funds/securities/futures/investment sector increased 28% year-over-year.

As China’s financial markets develop, recruitment demand from the financial sector in third and fourth-tier cities grew more rapidly than in first and second-tier cities during the third quarter of 2015, increasing by 70% year-over-year. This increase reflects the expansion of financial services to lower-tier cities in China.

Year-over-year change in recruitment demand from the financial sector in 3Q15

Financial sector 29%
Funds/securities/futures/investment 28%
Trust/warrant/auction/pawn 50%
Banking 45%

Recruitment demand from traffic/transportation and trade/import & export sectors increased steadily, while recruitment demand from the real estate sector dropped.

Recruitment demand from the traffic/transportation sector grew steadily thanks in part to various economic stimulus measures, especially those from construction funds established by banks to support infrastructure development.

According to statistics compiled by China’s National Development and Reform Commission, total approved investment in railway and road construction projects totaled RMB421.6 billion in September 2015.

As a result, recruitment demand from the traffic/transportation sector increased 18% year-over-year during the third quarter of 2015, much higher than its 3% year-over-year growth during the second quarter of 2015.

China’s Belt and Road Initiative created new growth opportunities for foreign trade during the third quarter of 2015. Seeking to take advantage, many Chinese firms increased overseas investment, resulting in increased demand for relevant professionals. Recruitment demand from the trade/import & export sector increased 18% year-over-year.

CIER index 2011-2015 (PRNewsFoto/Zhaopin Limited)

CIER index 2011-2015 (PRNewsFoto/Zhaopin Limited)

The real estate sector has yet to make a recovery since last year. Large firms continue to feel the negative impact as they see their financial and operational performances suffer. Recruitment demand from the real estate sector continued to fall, decreasing 15% year-over-year during the third quarter of 2015.

Year-over-year change in recruitment demand for different sectors in 3Q15

IT/Internet 41%
Financial 29%
Traffic/transportation 18%
Trade/import & export 18%
Telecommunication 17%
Retail/wholesale 14%
Medicine/biotechnology 13%
Manufacturing 10%
Fast-moving consumer goods 7%
Automobile/motorcycle 4%
Durable consumer goods 1%
Real estate -15%

Employment situation better in Eastern China

Recruitment demand in Central China increased 24% year-over-year during the third quarter of 2015, significantly higher than Eastern China’s 17% and Western China’s 14% year-over-year growth rate.

The implementation of the national urbanization strategy has spurred economic growth across in China’s central plains and middle Yangtze River regions. As the government works to transform traditional industries, the Central China region has established local industry clusters, some of which were moved from Eastern China.

Urbanization increases labour demand

Recruitment demand in third-tier cities increased 37% year-over-year, significantly higher than the 12% year-over-year growth seen during the second quarter of 2015. The increase was mainly due to increased recruitment demand in infrastructure construction and e-commerce.

City Year-over-year change in
recruitment demand
3Q15
First-tier 14%
Almost first-tier 15%
Second-tier 23%
Third-tier 37%

Stronger employment confidence seen in micro-and-small enterprises

Joint-stock and joint venture companies are increasingly becoming more important job creation. Both joint-stock and joint venture companies saw recruitment demand increase by 25% year-over-year during the third quarter of 2015.

Many foreign companies have begun laying off employees globally as a result of slowing growth. Recruitment demand from wholly foreign-owned enterprises increased by 7% during the third quarter of 2015. This is the lowest growth among all companies.

Futuristic Market Outlook

Monthly CIER index scores adjusted for seasonality are expected to trend downwards in coming months as a result of the macroeconomic environment in China.

China’s “Internet Plus” strategy has begun an irreversible trend which will continue to create more employment opportunities and restructure the labour force in China. Many industries are now finding the need for various Internet-related professionals which is creating a cross-industry flow of Internet professionals.

Emerging industries such as big data and cloud computing are creating new businesses which are spurring employment growth. The demand for Internet/IT talent is expected to continue to grow, especially within the e-commerce sector.

Increased urbanization and social development will continue to draw talent towards Eastern China and Central China as demand from several hundred small-and-middle sized cities outside of China’s 40+ super cities grows. During this process, employment options in small-and-middle sized cities will grow as they create a more favourable employment environment for job seekers.

Also read: Zhaopin Announces “2015 Top 100 Employers in China”

Image credit: flickr.com

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