HR firms thrive as economy transitions

While candidates should be prepared for structural and cyclical factors affecting the Chinese job market, opportunities are also becoming evident for foreign human resources companies to address the ongoing changes in the country, said Jean-Christophe Deslarzes, chair of the board of directors of Zurich-based HR services provider The Adecco Group (TAG).

Deslarzes made the comments in an interview during his visit to China in late October.

Structural factors, which are mainly skills gaps resulting from rapid technological progress and industrial upgrading, are making a big difference in the Chinese job market, he said, adding that among the many technology advancements, artificial intelligence is the number one factor in China that has exerted the biggest influence on the workplace.

On the one hand, jobs requiring little deep human behavioral traits such as creativity, empathy, sensitivity, collaboration or teamwork will be most impacted by AI. But on the other hand, AI adoption has already helped to improve workplace efficiency in China, he said.

As TAG discovered in its latest report released in October, Chinese workers are saving 70 minutes a day on average by adopting AI, which is above the global average of 59 minutes.

Thanks to this productivity improvement, 34 percent of Chinese employees said that they are spending more time on training and upskilling, 24 percent said they have more time to do creative work, while another 22 percent reported they have more time for strategic thinking. These findings apply to all industries in China.

However, only 44 percent of Chinese workers said they have completed training on how to use AI at work. In Europe, the percentage is even lower at 24 percent.

The good news is that the majority — 71 percent — of Chinese employees understand that being flexible and adaptable is key to being employable in the future. Likewise, technological advancements have boosted flexible employment in China, especially in industries such as information technology, logistics and digital services.

The rise of flexible employment among younger, tech-savvy Chinese candidates reflects a shift toward a more adaptable workforce, said Deslarzes.

"By focusing on reskilling and upskilling, as well as promoting practical, tech-based competencies, China can bridge the skills gap and appropriately prepare its workforce for the future," he said.

Deslarzes also pointed out that the economic slowdown has reduced hiring in sectors like real estate, finance and IT in China.

But this also indicates opportunities for HR companies' outplacement and career transition services, which help those between jobs with the transition to new employment.

According to global consultancy Verified Market Reports, China's outplacement services market was valued at about $3 billion in 2023 and is projected to reach more than $5 billion by the end of 2030, with a compound annual growth rate of more than 7 percent during the forecast period from 2024 to 2030.

LHH, a career transition services provider under TAG, experienced double-digit growth in China last year.

"Outplacement businesses help to foster workforce adaptability and resilience, which are essential for businesses of all sizes navigating today's complex economic landscape," said Deslarzes.

During his recent visit to China, meeting Shanghai's Party Secretary Chen Jining and Yin Li, secretary of the Communist Party of China Beijing Municipal Committee, Deslarzes said he has managed to form a deeper understanding of the job markets in both cities.

Shanghai has placed much focus on industrial transformation and upgrading while Beijing has emphasized that innovation and the digital economy will provide much room for growth. These point to a clear trajectory of growth for HR service providers, he added.