Combing through a huge amount of hiring data, a new report has revealed the covid-19 outbreak’s detailed impact on China’s job market in the first quarter, calling for greater policy support for smaller businesses and low-income groups as well as stepped-up efforts to brace for global supply chain reshuffles.

The report, the first quarterly one in a series and released earlier this month by Professor Lu Hai with Peking University’s Guanghua School of Management and his research team, was based on analysis of more than one million recruiters’23 million-plus job vacancies from Zhaopin.com, a leading job recruitment website in the country.

Key findings:

— 1st quarter new jobs down 27 percent year-on-year, number of recruiters unchanged

— small and micro-sized firms suffer more

— low-income population hit hardest by outbreak

— work recovery progress closely related to outbreak severity, local governments’responses

— job seekers with several years of work experiences under greater pressure

— IT and new energy vehicle industries suffer extended outbreak impact

— export-focused job demand to remain weak in 2nd quarter, in urgent need of support

Policy advices:

— greater, more precise support for smaller and foreign-owned businesses

— direct financial allowances for low-income,unemployed groups for certain durations

— policy support for both college graduates and job seekers with full-time experiences

— further open market, break down trade barriers and guard against risks from global chain reshuffles

THE BIG PICTURE

According to the report, the number of recruiters between Jan. and March was slightly up from the same period last year, but the number of job vacancies saw a 27.8 percent decrease, with the number of persons wanted down 26.8 percent. Both decreases are notable.

However, the impact of the outbreak on different industries differs a lot. While vacancies in general were down from 2019, culture, media and service sectors suffered the most,with new jobs reduced by more than 40 percent. Education, IT, finance and trade followed with decreases of 30 to 40 percent. Agriculture, fishery, forestry and manufacturing saw 20 to 30 percent decreases, with real estate, transportation and commercial services down by 10 to 20 percent. Public service, energy and mining suffered the least, with new jobs down only 10 percent year-on-year.

The smaller the business,the greater the impact. Firms with lower than 100 employees offered 30 percent fewer new jobs while those having more than 1,000 employees offered ten percent less.

Ownership-wise, foreign-funed firms and joint ventures suffered the most with over 30 percent fewer new jobs. Privately-owned businesses followed with 26 percent fewer new vacancies. New jobs from state-owned enterprises were down by 20 percent.

In terms of job types, five hardest hit by the outbreak were procurement and trade, advertisement and convention, car sales, transportation and sales administration, each reporting more than 50 percent fewer new jobs. The least impacted five were cooking, technician, production management, banks and quality control and safety protection. Notably, new jobs in quality control and safety protection rose by 25 percent,possibly due to outbreak-driven demand.

In addition, jobs with smaller salaries saw greater decreases. Positions offering less than 4,000 yuan(564 U.S. dollars) were down 44 percent while those with more than 15,000 yuan were only 12 percent fewer. Low-income people were hit hardest considering that they, once having lost their jobs, will have greater difficulties in finding new ones.

IMPACT FROM GLOBAL PANDEMIC

The report finds that the severity level of local outbreak has a greater impact on the progress of regional economic recovery.

Industries relying more on export and globalization were hit harder. Lu’s research shows a notable negative correlation between the recovery of new jobs demand and an industry’s export share. Every 10 percent of export’s share in an industry’s total output will lead to 16.6 percent slower in the speed of the industry’s recovery compared with the same period last year.

Meanwhile, recovery speed of recruiting demand in the first quarter is positively correlated to import share in an industry’s total output. Lu attributed this finding to the fact that the coronavirus SARS-CoV-2’s impact was largely confined to Chinese firms in the first quarter, especially in Jan. and Feb. when overseas infections had yet to soar and Chinese firms’ import businesses were largely unaffected. As more overseas firms are under the influence of the outbreak, industries with a more reliance on import are expected to suffer more.

JOB SEEKERS BEWARE

In general, there is a reverse-U shape correlation between the decreasing of new jobs and work experiences required. Jobs requiring no work experiences were down by 11 percent. Impact on those requiring more than five years were also limited. In comparison, positions requiring one to five years past experiences saw a 15 percent decrease. According to the report, this shows that the outbreak should have a relatively lighter impact on college graduates seeking jobs. Meanwhile, those with several years of work experiences should think twice before “naked resignation” since it’d be harder for them to find new jobs.

Among healthcare service and five types of state-level strategic industries, the creative digital industry suffered the most with 45 percent fewer new jobs. Healthcare services, including cosmetology, supplements and fitness, also saw huge decrease due to low demand. IT was also hugely affected due to its close export ties. Impact on new energy, high-end equipment and bio-industry were relatively small, with each offering about 20 percent fewer new jobs.

POLICY INTERVENTION CRUCIAL

Based on analysis of WTO’s global production chains and outbreak outlooks of various countries, the report estimates that the loss of new jobs from manufacturing firms with more focus on domestic businesses as well as services for commerce and consumption will decrease to around 10 percent by the end of second quarter, while job losses in public service will shrink to six percent.

Meanwhile, manufacturing with an emphasis on export will continue to suffer if without policy interventions due to plunging overseas demand, offering even fewer new jobs. Considering the uncertainties in the covid-19 development and work recovery progress, policy support will be crucial for this particular business area. The report estimates that workforce demand from the industry, if left to its own device, will plummet by 37 percent.

In addition, the report warns of risks from upcoming industrial supply chain reshuffles as the pandemic pushes more foreign firms to switch supply partners, leaving many Chinese businesses unable to rebound to pre-outbreak level even when the coronavirus is gone.

The report calls for high-precision policy support that caters to different firm sizes and industries to help them weather the outbreak-induced ordeal that might last multiple seasons. It is equally crucial to further open up the market, break down trade barriers so as to maintain liquidity and cope with supply chain reshuffles.

(This report was jointly made by Professor Lu Hai and his teammates Song Lulin and Shen Zhi’en in partnership with Zhaopin.com, with research support from Li Dan and Zhang Yue with the Guanghua-Rotman Centre for Information and Capital Market Research.)