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Majority of firms cutting staff

By Cao Li (China Daily)
Updated: 2009-04-01 11:03

SHANGHAI: As the economic crisis penetrates deeper, a majority of businesses in the country have reduced their staff strength over the past six months, a recent survey has found.

Hiring expectations in China have fallen greatly over the last year, and have seen the worst slump since the fourth quarter of 2001, said Mark Carriban, managing director of Hudson Asia, a leading human resources services provider in the world.

Jobseekers flock to a job fair in Shanghai last week. [China Daily]

In a survey involving 3,000 enterprises in mainland China, Hong Kong, Japan and Singapore, 30 percent of the respondents in the mainland said they would keep hiring in the second quarter, 4 percent lower than the first quarter but still significantly higher than those in the other regions.

At the same time, 21 percent of the respondents in the mainland said they would reduce headcount, compared to 8 percent in the first quarter.

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"Fifty-five respondents said that they have implemented certain initiatives to reduce human resource related costs in the last six months," said Carriban.

Sixty-eight percent of the manufacturing firms confirmed they had cut HR-related costs in the last six months.

"Mainland China is still widely seen as an attractive manufacturing location and companies are working hard to cut costs and remain competitive," said Carriban.

The banking and financial services sector, which has been severely affected by the economic downturn, has the second highest proportion, at 61 percent.

The consumer sector is holding up well.

"People are not spending much money on top brands," he said. "But the mid-market has become more fashionable and is getting good business."

Reducing headcount and lowering bonuses are the most widely adopted initiatives to cut HR-related costs, the survey found.

Thirty-nine percent of the respondents said their organization had implemented headcount reductions in the last six months and 35 percent reported that bonuses had been slashed.