Business / Companies

Slowdown sparks adjustments in hiring practices

By Chen Jia (China Daily) Updated: 2012-07-19 09:18

Slowdown sparks adjustments in hiring practices

A job seeker fills out an employment application form at a job fair in Yangzhou, Jiangsu province. Companies are expected to react to China's slowing growth by adjusting their labor models to reduce labor costs and increase employee engagement. [Photo / China Daily]

The ongoing slowdown of China's economy has cast shadows over the job market, prompting the government and business leaders to adjust their human resources strategies to reduce risks, analysts said.

As the government highlights social stability while trying to stabilize economic growth, employment has become a key issue.

"Greater pressure for employment looms after industrial profits dropped 2.4 percent year-on-year during the January-to-May period. State-owned companies were hit hard, with first-half profits down 11.6 percent," said a research note from North Square Blue Oak Ltd, a London-based investment bank that focuses on the Chinese market.

In June, the country's industrial production remained weak, with a growth rate of 9.5 percent, compared with 9.6 percent in May and 15.1 percent in June 2011, according to data from the National Bureau of Statistics.

Premier Wen Jiabao said on Tuesday that job growth and improved living standards are two priorities of the current administration, but that more efforts are needed due to the complex employment situation ahead.

"The slowdown of China's economy is expected to bring challenges, which requires preparations on both macro and micro levels," said Vernon Bryce, the director of Kenexa Ltd, a human resources company.

More flexible labor policies and regulations have to be considered to ensure fewer people lose jobs, he said.

"In the long run, the authorities should plan labor supply according to market demand. More skilled employees are needed in the future, including project engineers, technical teachers and nurses."

On the microeconomic level, companies are expected to react to the changing situation by adjusting their labor models, such as utilizing both full-time and part-time employment, to reduce labor costs and increase employee engagement, Bryce said.

Recently, job cuts have been reported in Sany Heavy Industries Co Ltd, Sinovel Wind Group Co Ltd and automaker BYD Co Ltd.

New measures are expected in the coming weeks to boost economic growth and maintain social stability, according to the experts at North Square Blue Oak. Tax cuts are generally the most direct way to help businesses, compared with lending and other policies, they said.

Some companies are already adjusting their human resource policies.

The international accounting firm KPMG, for instance, has implemented a reward system for high-quality employees and designed a rapid-promotion plan to encourage staff members.

"We fine-tuned our HR strategy amid the gloomy economy, otherwise we will not be able to survive," said Kin Chong U, director of Organizational and Leadership Development at KPMG China.

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