The global economic downturn we're in will have long-term consequences for employment and consequently recruiting. The world is seeing the biggest increase in unemployment in decades. Employment is a consequential 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.
Changes in Employment in Different Sectors
Regardless of when we emerge from this global financial crisis, 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. If you work in an industry that’s heavily dependent on exports, then don’t expect an upturn soon either. Domestic demand is also falling in overseas markets, and countries will increasingly strive to protect their domestic industries, further reducing the need for imports.
Areas of Growth
A recovery will be weak: losses in asset values and the need to reduce debt and costs will all but ensure that. Much of the increase in employment is expected to occur in small businesses and startups. One impact of an economic downturn is that more people start businesses because they can’t find work. 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 and become more cautious in an uncertain economic climate and this will likely remain so for the foreseeable future. Correspondingly, companies are becoming increasingly cautious and conservative in their hiring needs and decision-making.
Recruitment Trends
Recruiting trends are harder to predict, but given that a recovery will be weak, employers are more likely to turn to part-time and contract staff to seek ways to minimize costs and have the flexibility to control the term of employment. 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 staff.
There is likely to be further localization of senior management roles. As companies look at ways to save costs then the first and usually the major cost category for a company are labour costs, so expensive and burgeoning expatriate packages are replaced by local talents at a significant cost saving. Apart from localizing expatriate staff, lay-offs occur particularly, of non-performing staff. A resultant reaction from lay-offs to cut costs and help the bottom line are how to motivate and retain the remaining staff whose morale will have taken a hit. Retention programs to keep qualified staff are a hot topic for companies.
Depending on the industry if the need for skilled or experienced talent is not so necessary then companies will use interns and lower paid graduates. Such companies do not see talent acquisition as a concern as there are estimated to be more than 5 million graduates in 2009 looking for work.
In these challenging times many companies use the down-time in business to train and develop staff with on-job coaching programs. Another major impact on recruitment in China is the new China Labour Law, which has affected HR policies and in particular hiring strategies as the new labour law is more protective to employees particularly in terms of dismissal situations where there are higher costs for companies and stricter enforcement of probation periods.
Conclusion
There are opportunities for employers in this challenging environment. Those seeking good staff will have to be more creative, more flexible and follow trends in growth industry sectors. Consider temporary and/or contract staffing services. For advice on Recruiting in China contact our Hong Kong office on 3552 9100.
