China has never had so many graduates and so few jobs

As he walked between the booths of the 78 companies recruiting recent graduates at Beijing’s Renmin University on March 30, Chen Jun*’s hopes of finding the ideal job waned.

“There are very few suitable jobs,” Chen said. Graduated in economics, he only submitted four resumes at the event, which offered more than 500 job openings.

Yang Yanlin*, a graduate in agricultural economic management, was also disappointed by the event. “There are limited job options for my specialty, and things are not going well,” he said.

Chen and Yang are among the 10.76 million Chinese students expected to leave college campuses this year, the largest group of graduates in Chinese history and 1.67 million more than last year, according to the Ministry of Education.

They are trying to launch careers in one of the toughest job markets in years. The world’s second largest economy faces increasing growth uncertainties due to the Covid-19 pandemic, geopolitical risks and domestic industrial restructuring. Regulatory inspections and market contraction in sectors including the internet, real estate and education have forced employers to cut costs and downsize, limiting recruitment. At the same time, the mismatch between the demands of the labor market and the qualifications of many trainees is becoming increasingly clear.

According to leading recruitment service provider Zhaopin.com, job vacancies for recent college graduates declined by 4.5% in the first quarter of this year compared to last year.

As graduation season approaches in June, many students still haven’t gotten a job offer. At a university in the commercial hub of Guangdong, southern China, only 13.5% of this year’s graduates had found work by March 28, according to Caixin news agency.

To make the competition even fiercer, a growing wave of students abroad are returning home amid the pandemic and geopolitical uncertainties. Data from the State Information Center shows that the number of overseas students returning to China topped 1 million for the first time in 2021. Meanwhile, job offers from companies that generally prefer foreign-educated students are shrinking.

The number of Chinese college graduates seeking employment is expected to continue to rise by more than 1.1 million a year, according to official figures.

The job pressure on students will continue for years to come, said Li Qiang, vice president of Zhaopin.com. But this does not reflect insufficient employment so much as a structural mismatch between supply and demand, Li said.

structural mismatch

The gap between the expectations of college graduates and the demands of the market is visible. Data from the Ministry of Human Resources and Social Security show that the manufacturing industry accounted for the largest percentage, 38.7%, of talent demand in China, followed by wholesale and retail. But the most sought-after jobs by recent graduates are often in industries that include internet and communications, real estate and construction, culture and media, and finance, according to data from Zhaopin.com.

Graduates either don’t want or aren’t suited to jobs in industries that have the most urgent need for workers, analysts say.

The high-tech chip and low-cost manufacturing sectors have labor shortages, said a researcher at the HR Ministry. According to a 2016 report released by the Ministry of Education, China’s top manufacturing sectors will face a shortfall of 30 million workers by 2025, with huge gaps in next-generation information technology, energy equipment, and new materials.

The preference of graduates for jobs in state-owned sectors is growing as they seek more stable careers. While the recruitment of recent graduates by all levels of government has expanded over the years, competition has intensified as the number of applicants has increased. In 2022, on average, 68 people ran for each position in the national civil servant competition, compared with a ratio of 16 to 1 in 2003.

Even in Shantou, Guangdong province, where there is a thriving private sector, there is a growing tendency for students to take exams to apply for civil service positions, said Su Junzhi, an official at Shantou University.

“This is not only the students’ choice, but also reflects a change in their families’ mindset,” said Su.

Interest in public sector jobs can be seen as a shift towards job security following the Covid-19 pandemic and the crackdown on the private sector in areas such as tutoring and technology. Tens of thousands of people lost their jobs as a result of government-forced reform in the private education sector alone. Public sector positions are seen as “iron rice bowls”. A state job usually means lifelong job security with stable income and social benefits in areas such as housing and education.

A 2021 survey by recruitment website 51job.com showed that 39% of students at China’s top universities preferred state-owned companies when seeking employment, reflecting risk aversion and a desire for stability, according to Feng Lijun, a human resources specialist at 51job. .with.

Compared to private companies, Chinese state-owned companies have seen more stable growth in recent years. In 2021, they reported a 30.1% growth in net income, with an 18.5% increase in revenue.

But criteria for entry into large public companies are often strict, as employers prefer experienced workers or workers with exceptional education, sources at some public companies said.

Since 2020, the central government has pressured state-owned companies to recruit more recent graduates to strengthen the labor market hit by the pandemic. But due to strict requirements and management systems, a significant increase in the short term is unlikely, a state-owned executive said.

losing steam

The job market for graduates is cooling as companies in the education, internet and real estate sectors, which once offered a large number of job opportunities, are holding back hiring after years of acceleration.

The education and tutoring industry has hired more than 700,000 recent graduates annually in recent years, making it one of the most important job generators, according to Ge Wenwei, partner at Duojing Capital. But that engine has run out of gas since the summer of 2021, when the industry was rocked by new rules — known as “double reduction” — to lessen the burden of homework and extra classes for students.

Increased scrutiny of tutoring services has led to the closure of many small and medium-sized institutions and mass layoffs. In many cities, the sector has shrunk by 90% in six months as companies rushed out of business. Major players, including New Oriental and TAL Education Group, struggled to revamp their businesses and cut thousands of jobs to survive.

“There will be recruitment of recent graduates, but the number is marginal compared to previous years,” said an executive at an online education company. Major industry players in Beijing plan to hire 300 to 400 graduates this year to replace older workers or fill vacancies, compared with 3,000 to 5,000 previously hired, the executive said.
The real estate industry, once a favorite destination for recent college graduates, is also cutting its workforce amid the market downturn and industry-wide liquidity crisis.

Since the second half of 2021, many developers have stopped new hires and started cutting jobs as business has slowed, an employee at a talent agency said.

Big tech companies including Alibaba, ByteDance, Meituan and JD.com have also slowed hiring amid business shifts. In the first quarter of this year, the supply of jobs in the internet industry for recent college graduates dropped 1.78% from 2021, according to Zhaopin.com.

After years of rapid expansion, since the end of 2020 Chinese tech companies have faced rigorous scrutiny on several fronts, which has led to fundamental changes in the industry, according to analysts.

Most internet companies conducted recruiting on campuses in March. Meituan is said to have made more than 10,000 offers in its spring recruitment, Caixin has learned. JD.com planned to hire more than 20,000 college graduates this year. At the same time, many technology employers have laid off workers to cut costs.

Firing older, higher-paid workers and hiring new ones has been a common practice for internet companies to cut employee costs, an internet industry recruiter told Caixin. College students are cheap, high-quality resources, and the big internet companies aren’t going to give up on them, she said.

finding a solution

Challenges for college graduates to find jobs have been constant since the early 2000s, when China expanded university enrollment. The problem has only gotten worse over the years, despite all sorts of policies and measures.

The crux of the matter is the growing number of graduates who are unable to meet market demands, said several human resources experts. There was a mismatch between students’ expectations and market realities, according to them.

The labor market mismatch reflects the fact that China’s education system lags behind the country’s industrial transformation, experts said.

Chinese universities have focused on cultivating generalist education, which cannot meet companies’ increasing demands for specialization, said Zhang Chenggang, a labor market expert at the Capital University of Economics and Business in Beijing.

The biggest problem with China’s higher education system is disconnection from social needs, said Xiong Bingqi, president of the Beijing-based 21st Century Education Research Institute.

In August 2021, the State Council issued a labor market development plan requiring universities to improve their academic subject curriculum to better respond to market demands. But in practice, universities are hesitant to adopt major changes because of concerns about high costs and potential risks, Zhang said.

Experts have long called for China to promote vocational education to improve talent supply. In September 2020, nine central government departments led by the Ministry of Education issued a guideline aimed at increasing the percentage of enrollment in vocational schools and establishing a higher education system for vocational training.

For many Chinese families, however, vocational schools are not seen as a promising option, as they have long been derided as low-quality and inferior to universities.

To change this mindset, educational assessment standards must be diversified, said Chu Zhaohui, a researcher at the Chinese Academy of Education Sciences. One of the important activities of the modern vocational education system is to cultivate suitable talents for model social development, and this requires establishing a social value system that respects the equality of all people, Chu said.

It is also important for China to modernize the industrial structure, develop the regional economy and form a virtuous circle of education and economic development, experts said.

*Chen Jun and Yang Yanlin are pseudonyms

(Collaborated by Cai Jingyuan, Zhou Luqing, Wang Shihan, Huang Huizhao, Du Zhihang and Guan Cong)

Translated by Luiz Roberto M. Gonçalves