Issue206?March2025|

CHNABREFNG

FromDezanShira&Associates

FromRecruitmentto

Retention:TalentTrendsandStrategiesinChina

NavigatingChina’sEvolvingLaborMarket

BuildingLocalizedRecruiting

StrategiesforYourChinaBusiness

BeyondSalary:HolisticApproachestoTalentRetentioninChina

Pg04

Pg12

Pg18

Introduction

ADAMLIVERMORE

Partner

DezanShira&Associates

W

elcometoFromRecruitmenttoRetention:TalentTrendsandStrategiesinChina.Thisspecialissueisacomprehensiveresourcedesignedtoshedlightontheevolvingdynamicsoftalentmanagementinoneoftheworld’smostvibrantlabormarkets.Intoday'srapidlychangingeconomiclandscape,recruiting,engaging,andretainingtoptalentinChinahasbecomebothanartandascience,criticaltosustainingcompetitiveadvantage.

InthisissueofChinaBriefingmagazine,wehavecuratedthreeinsightfulchaptersthatprovidestrategicguidanceandactionableinsights.Thefirstchapter,NavigatingChina’sEvolvingLaborMarket,laysthegroundworkbyexamininghowdemographicshifts,technologicaladvancements,andregulatoryreformsarereshapingemploymentpracticesacrossthecountry.

Thesecondchapter,BuildingLocalizedRecruitingStrategiesforYourChinaBusinesses,offerspragmaticapproachestotappingintoChina’sdiversetalentpool.Itoutlinesstrategiesthatcanhelpbothmultinationalcorporationsandlocalenterprisessecuretherightcandidatesamidfiercecompetition.

Thefinalchapter,BeyondSalary:HolisticApproachestoTalentRetentioninChina,exploresinnovativeretentionstrategies.Ithighlightstheimportanceofprofessionaldevelopment,work-lifebalance,andasupportivecorporatecultureasessentialcomponentsforfosteringlong-termemployeeloyalty.

Together,thispublicationoffersastrategicroadmapfornavigatingChina’sdynamictalentlandscape.Iamconfidentthattheinsightspresentedherewillempoweryoutoadapt,innovate,andthriveintoday’sfast-pacedbusinessenvironment.

DEZANSHIRA&ASSOCIATES

ASIABRIEFING

ASEANBRIEFING

CHINABRIEFING

INDIABRIEFING

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Withkindregards,

AdamLivermore

Credits

Publisher-AsiaBriefingMediaLtd.

LeadEditor-QianZhouEditors-ArendseHuld,

GiuliaInteresse,andQianZhou

Contributor:LindsayShiDesigner-MiguelEnricoAnciano

·Issue206·March20252

FromRecruitmentto

Retention:TalentTrendsandStrategiesinChina

Contents

Reference

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titlesareproducedbyAsiaBriefingLtd.,awhollyownedsubsidiary

ofDezanShiraGroup.ContentisprovidedbyDezanShira&Associates.

NavigatingChina’sEvolvingLaborMarket

BuildingLocalizedRecruiting

StrategiesforYourChinaBusiness

BeyondSalary:HolisticApproachestoTalentRetentioninChina

Pg04

Pg12

Pg18

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·Issue206·March20253

·Issue206·March20254

Chapter1

NavigatingChina’sEvolvingLaborMarket

ChinaIslabormarketistransformingrapidlyin2025,drivenbydemographicshifts,

evolvingworkplacepreferences,andtechnologicaladvancements.Thischapterexploresthetrends

andchallengesinmaintainingasustainableworkforce.

Associate,Editorial&ResearchAuthor

ArendseHuld

C

hina'slabormarketisundergoingaperiodofsignificanttransformationasitadaptstothechangingdynamicsof2025.Drivenbydemographicshifts,evolvingworkplacepreferences,andrapidtechnologicaladvancements,thecountryisexperiencingacontractioninitsworking-agepopulationcoupledwithanagingworkforce.Atthesametime,risingeducationallevels,increasedurbanization,andshiftingattitudestowardworkarereshapingthenatureofemploymentinChina.Thesechangesareplacinggrowingpressureonbusinessestorethinktheirtalentstrategies.

Asthedemandforhighlyskilledprofessionalsintensifiesacrosskeysectors,companiesfaceincreasingcompetitiontoattractandretaintherighttalent.Insuchacompetitiveenvironment,awell-definedandadaptabletalentstrategyismorecrucialthaneverforsustaininglong-termbusinessgrowth.

Organizationsmustnotonlyfocusoneffectiverecruitmentpracticesbutalsoensurethattheirworkplaceculture,compensationpackages,and

trainingopportunitiesalignwiththeexpectationsofthemodernworkforce.ThisarticledelvesintothekeychallengesandtrendsshapingtalentrecruitmentinChinaandoutlinesstrategiesforemployerstostayaheadintheevolvinglaborlandscape.

Changingworkforcedynamics

Agingworkforceandshrinkingworkingagepopulation

Chinaiscurrentlyexperiencingsignificantdemographicshiftswithprofoundimplicationsforthecountry’slaborforce.Duetofallingbirthratesandarapidlyagingpopulation,thesizeofChina’sworking-agepopulationisdeclining.In2023,theworking-agepopulation(ages15to59)stoodat

857.98million,6.83millionfewerthanin2022and

77.02millionfewerthanin2013.

Additionally,theaverageageofworkershasrisensubstantiallyoverthepastfewdecades,from32.25yearsin1985to39.72yearsin2022.

·Issue206·March20255

China’sLaborMarketataGlance

Workforce&productivity

Workforcedemographics

Totalworkforce(2024):734.39million,ofwhich:Averageage(2022):39.72

million

473.45

500

299.73million

400

260.94million

300

200

100

0

UrbanRuralMigrant

workers*

Urbansurveyedunemploymentrate(2024):

5.1%

Newurbanemployment(2024):

+12.56million

Workforceproductivity(2024):

RMB173,898pp;+4.9%yoy

Averageweeklyhoursofcompanyemployees(2024):49

Rural

Urban

41.5140.36

39.0438.16

Laborforceparticipationrates(2023)

72.1%

60.5%

Proportionofmen/womeninemployment(2023)

Men56.7%

Women43.3%

929.82

925.47

1000935

800

600

400

200

0

915.7

910.66

921.77

894.38

882.22

875.56

864.81

857.98

WorkingAgePopulation(million)

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2013

·Issue206·March20256

Incomes&Wages

Monthlyminimumwage(Feb2025):RMB1,690to2,690(US$233to370)

Percapitaincomefromwages(2024):

RMB23,327(US$3,217)

Urban

averageannualincome2023

Urban

Publicsector

Privatesector

RMB32,899(US$4,537)

RMB9,799(US1,351)

RMB120,698(US$16,645)

Rural

RMB

68,340(US$9,425)

100,000

50,000

0

ChinaGrowthinAverageAnnualSalary,2023

Public(RMB)Private(RMB)Private(%)Public(%)

2014201520162017201820192020202120222023

12

10

8

6

4

*Workersthathavemovedfromruraltourbanareasforwork.Source:NationalBureauofStatistics

Asof2022,around54.11percentofthepopulationwasbetweentheagesof25and45,accordingtothe2024HumanCapitalReportfromtheCenterforHumanCapitalandLaborMarketResearchattheCentralUniversityofFinanceandEconomics.TheprovinceswiththehighestproportionofpeopleinthisagegroupwereShanghai,Beijing,Guangdong,Tianjin,andFujian,whilethelowestproportionswerefoundinSichuan,Guizhou,Jiangxi,Hunan,andHeilongjiang.Thissuggeststhatyounger

working-ageindividualscontinuetogravitatetowardChina’swealthierprovincesandmunicipalitiesforemployment,whilepoorerandlessdevelopedareasareseeingtheirworking-agepopulationsshrinkmorerapidlyduetodecliningbirthrates.

ThisongoingtrendhasseveralimplicationsforChina’slaborforce.Astheworking-agepopulationdeclinesandtheaverageworker’sageincreases,laborshortagesareemergingincertainindustries,

·Issue206·March20257

particularlythosethatrelyonyounger,morephysicallycapableworkers,suchasmanufacturing,construction,andlogistics.

Meanwhile,theconcentrationofyoungerworkersinthedevelopedurbancenterssuggeststhattheseregionswillcontinuetobenefitfromamoredynamic,skilled,andadaptableworkforce,drivinginnovationandeconomicgrowth.However,thiswillcomewithincreasedlaborcompetitionandrisingwages.

Conversely,poorerandlessdevelopedprovinceswithashrinkingproportionofyoungerworkersfaceagrowinglaborgap,whichcouldleadtoslowereconomicgrowth,decliningproductivity,anddifficultiesinattractingnewbusinesses.Ineffortstofostereconomicrevitalizationandreduceregionaldisparities,bothlocalandcentralgovernmentsareintroducingvariousincentivepoliciestoattractbusinessesandskilledworkerstotheseareas.

Bytheendof2024,therewere734.39millionpeopleinemployment,with64.5percentworkinginurbanareas.Thisrepresentedadecreaseof6.02millionfromthepreviousyear.However,thecountryadded12.56millionnewurbanjobsin2024,anincreaseof120,000comparedto2023.

Thetotalnumberofmigrantworkersreached299.73million,anincreaseof0.7percentfromthepreviousyear.Ofthese,178.71millionworkedoutsidetheirtownship,while121.02millionwereemployedinnon-agricultural,non-self-employmentjobswithintheirowntownships.

AlthoughChina'slaborforceisshrinking,productivityhasincreased.In2024,theproductivityratereachedRMB173,898(US$23,982)perperson,markinga4.9percentincreasefromthepreviousyear.Theproportionofwomenintheworkforceisalsosteadilyrising.In2023,therewere320millionfemaleworkers,

accountingfor43.3percentofthetotalworkforce,upby0.1percentagepointsfrom2022.

Theaveragelengthofeducationofworkershassignificantlyincreasedinrecentdecades,reachinganaverageof11.05years,threeyearslongerthanin

1982.Amongnewentrantstothelaborforcein2023,theaveragelengthofeducationwas14years,and250millionpeoplewereenrolledinhighereducation.

ThesetrendshighlightChina’sevolvinglabormarketdynamicsanditseffortstooffsettheimpactofashrinkingandagingworkforce.Theriseinproductivityperworkersuggeststhattechnologicaladvancements,automation,andskilldevelopmentarehelpingtosustaineconomicoutput.

Ahigherproportionofwomenintheworkforcemayalsocontributetolabormarketstabilitybyexpandingthetalentpool.Additionally,thesignificantincreaseineducationalattainmentindicatesthatChinaisshiftingtowardamoreknowledge-basedeconomy,withalaborforcebetterequippedforhigh-skilledindustries.Thiscanhelptomitigatethechallengesofanagingworkforcebyensuringthatfewermorehighlyskilledworkerscanmaintainorevenenhanceeconomicproductivity.

Risingwagesandincome

AsChina’sGDPhasgrownoverthedecades,sotoohavetheincomesandwagesofitsresidentsandworkers.In2024,theaveragepercapitaincomefromwagesreachedRMB23,327(US$3,217),markinga5.8percentincreasefrom2023.Forurbanresidents,thisfigurerosetoRMB32,899(US$4,537),whileforruralresidents,itwasRMB9,799(US$1,351).

Averagewageshavemorethandoubledoverthepastdecade,thoughsignificantwagedisparitiesremainbetweenthepublicandprivatesectors.In

·Issue206·March20258

2023,theaverageannualurbanwageinthepublicsectorwasRMB120,698(US$16,645),upfromRMB56,360in2014.Incomparison,theaverageurbanwageintheprivatesectorwasRMB68,340(US$9,425),upfromRMB36,390(US$5,019)in2014.

Foreign-investedcompaniesalsoofferhigherwages.In2023,theaverageannualwageinthesecompanieswasRMB149,130(US$20,567).

Thehighestwagesinboththeprivateandpublicsectorswerefoundintheinformationtransmission,software,andITindustry.Inthepublicsector,averagewagesreachedRMB231,810(US$31,969),whileintheprivatesector,theywereRMB129,215(US$17,820),withyear-on-yearincreasesof5.2percentand4.3percent,respectively.Thesecond-highestearningindustrywasfinance,whereworkersearnedRMB

197,663(US$27,260)inthepublicsectorandRMB

124,812(US$17,213)intheprivatesector.

China’sminimumwagehasalsoseensignificantincreases.InShanghai,whichcurrentlyhasthehighestmonthlyminimumwageinthecountry,theminimumwagehasrisenby66percentfromRMB1,620in2013toRMB2,690(US$370)asofFebruary

2025.InGuangxiProvince,whichhasthelowestminimumwage,theratehasincreasedbyover40percent,fromRMB1,200(US$165)permonthinthelargestcitiestoRMB1,690(US$233)asofFebruary2025.

Urbanizationanddomesticmovementofworkers

ThemovementofworkersacrossChinahasfluctuatedsignificantlyinrecentyears.Duringthepandemic,migrationtothecountry’slargestcitiesslowed,withthepermanentpopulationsofmajorcitiessuchasShanghaideclining.Thiswasduetoacombinationoffallingbirthratesandreducednetmigration.Meanwhile,smallerprovincialandprefecture-level

cities,likeNanchang,sawpopulationincreases,suggestingthatpeoplewereincreasinglyoptingtorelocatetosmallercitiesclosertotheirhometowns.

However,thistrendappearstohavereversedoverthepasttwoyears.In2023,Shenzhen'spopulationreachedarecord17.8million,growingby128,300peopleandreversingthepopulationdeclineof2022.SimilarpatternswereobservedinShanghaiandBeijing,despitethesecitiesexperiencingnegativenaturalpopulationgrowth(birthrateminusdeathrate).ThisindicatesthattheestablishedeconomiccentersineasternandsouthernChinaremainattractivedestinationsforworkandliving.Incontrast,Chongqing,whichsawpopulationgrowthduringthepandemic,experiencedadecreaseof219,100people.

Atthesametime,manysmallercitiesacrossChinaarealsoseeingpopulationgrowth,despitelowbirthrates.Somefast-growingprovincialandregionalcapitals,knownas“newfirst-tiercities”likeHefei,Zhengzhou,andHangzhou,haveseensomeofthelargestpopulationincreasesinthecountry.

In2023,theirpopulationsincreasedby219,000,180,000,and146,000people,respectively.Thesecitiesarebenefitingfromeffortstodevelopindustrialclustersandattractbusinesses,whichhasledtoanincreaseinjobopportunities.

ItisalsoimportanttonotethatChinaiscontinuingitsprocessofurbanization,drivenbybothnaturalfactorssuchasbetterlivingstandards,jobopportunities,andhigherincomes,aswellasnationalandlocalpoliciesaimedatattractingtalentandrelaxinghouseholdregistrationrestrictions.By2024,China’surbanizationratereached67percent,anincreaseof0.84percentagepointsfrom2023.Withurbanizationremainingakeyprioritytoboostcitizens'incomelevels,furthermigrationintocitiesisexpectedtocontinueformanyyears.

·Issue206·March20259

Changingattitudesandworkpreferences

Beyonddemographicsandwages,China’sworkforcehasundergonesignificantculturalshiftsoverthepastfewdecades.Althoughtheoveralllaborforceisaging,youngercohortsenteringtheworkplacearereshapingworkplaceculture,jobpreferences,andattitudestowardwork-lifebalance,whichhasprofoundimplicationsforthefutureoflabordynamicsandorganizationalpractices.

Amonglower-incomeworkers,amajorchangeamongyoungercohortsistherejectionofthetypesofmanualjobsinconstructionandmanufacturingthatwereonceprimaryemployersofpreviousgenerations.Instead,youngerworkersaregravitatingtowardtheservicesectorandgigeconomyjobs,suchascouriersanddeliverydrivers.

Whilethesepositionsaregenerallylower-paying,theyoffergreaterflexibilityandarelessphysicallydemandingcomparedtoworkinmanufacturingandconstruction.

AnimportantdevelopmentinChina’sworkcultureoverthepastfewyearsisthegrowingawarenessofwork-lifebalanceandanincreasingbacklashagainstoverwork.Thistrendisespeciallyevidentinwhite-collarprofessions,likelyduetothehighervisibilityofthesepositionswithinsociety.Anumberofhigh-profileincidentsattechcompanies,inparticular,havesparkedwidespreadcriticismandresistanceagainstthenotorious“996”workculture,whereemployeesareexpectedtoworkfrom9amto9pm,sixdaysaweek.

Inrelationtothisshift,governmentandpublicsectorpositionsarebecomingmoredesirableonceagain.Theseroles,onceknownasthe“ironricebowl”fortheirstability,hadlostappealasmanysoughtthe

higherpaypotentialandprestigeoftherapidlygrowingprivatesectors,particularlyintechanddigitalindustries.

However,theallureoftheseindustrieshasdiminishedamidreportsofoverworkandinstability,assomecompaniesfacefinancialdifficulties,layoffs,orclosures.

Theincreasingappealofgovernmentjobsamongyoungerworkersreflectsabroaderdesireforjobstabilityandregularhours,atrendthathasonlyintensifiedinthewakeofthepandemic.Thisshifthighlightsagrowingpreferenceforsecure,balancedworkenvironmentsovertheunpredictabledemandsandpressuresoftheprivatesector.

Competitionforhigh-skilledtalent

Duetothevariousdemographicandculturalshiftsdiscussedabove,Chinaisfacingsignificanttalentshortagesacrosskeysectorssuchastechnology,manufacturing,andfinance.Inresponse,companiesmustadoptproactivestrategiestoattractandretaintop-tiertalentinthisincreasinglycompetitivelandscape.

ThetechnologysectorisparticularlyaffectedasChinacontinuesitspushtowardhigh-endautomation,artificialintelligence,semiconductordevelopment,andrelatedfields.Accordingtothe2023ArtificialIntelligenceTalentInsightReportfromrecruitmentplatformMaimai,thetalentsupply-demandratiointheAIfielddroppedto0.39betweenJanuaryandAugust2023,meaningthatfiveopenpositionswerecompetingfortwocandidates.

Additionally,theChinaSemiconductorIndustryAssociationpredictsthatby2024,thetotalnumberofprofessionalsinChina’schipindustrywillreachabout

·Issue206·March202510

790,000,withatalentgapof230,000.Withinthisgap,thedesignandmanufacturingindustrieswillfaceashortageofapproximately100,000professionals.

Inintelligentmanufacturing,theMinistryofHumanResourcesandSocialSecurity(MOHRSS)projectsthatdemandwillreach9millionby2025,withatalentshortfallofapproximately4.5million.Talentshortageisthusemergingasamajorlimitationforthesector’sgrowth.

Withgovernmentinitiativesemphasizinginnovationandself-reliance,thereisagrowingdemandforhighlyspecializedengineersandresearchers.However,manyprofessionalsseekemploymentopportunitiesthatofferflexibilityandcompetitivecompensation.Toremainattractive,companiesneedtooffernotonlyfinancialincentivesbutalsocareerdevelopmentprogramsandpathwaysforprofessionalgrowth.

Toaddresstheselaborshortages,companiesareleveragingmultiplestrategies,beginningwithastrongemployerbranding.Apositiveworkplaceculture,clearcareerprogressionpaths,andcompetitivecompensationpackagesarecriticalinattractingskilledprofessionals.

Organizationsarealsoincreasinglyutilizingrecruitmentagenciestotapintospecializedtalentpoolsandstreamlinehiringprocesses.Moreover,trainingandupskillinginitiativeshavebecomeessentialinretainingemployeesandenhancingtheirlong-termvaluewithinthecompany.

Beyondfinancialincentives,non-monetarybenefitsplayacrucialroleintalentretention.Companiesthatprovidehealthcarebenefits,flexibleworkarrangements,housingassistance,andfamily-orientedsupport,suchaschildcareoptions,aremorelikelytoretainemployees.Additionally,fosteringa

workculturethatprioritizesemployeewell-beingandengagementcanleadtohigherjobsatisfactionandloyalty.

TacklingkeychallengesintalentrecruitmentinChina

AsChina’slabormarketevolves,companiesfaceseveralchallengesinrecruitingandretainingtalent.Thesechallengesarenotonlyshapedbydemographicshiftsbutalsobycultural,regulatory,andtechnologicalfactors.Understandingandaddressingthesechallengesiscrucialforemployerstoattracttoptalentinacompetitiveenvironment.

Culturaladaptationissues:Aligningvaluesandcorporateculture

AccordingtotheTalentTrends2024-MainlandChinareportfromMichaelPage,oneofthemostpressingissuesintalentrecruitmentisfindingcandidateswhoalignwithacompany’scultureandvalues.Organizationsmustthereforeclearlyarticulateandcommunicatetheircorporateculturethroughouttherecruitmentprocesstoensureagoodculturalfit.Failuretodosocanleadtomismatchesthathinderlong-termsuccessandemployeeretention.

Employersmustalsostrikeabalancebetweenmeetingcandidates’salaryandbenefitsexpectationswhilekeepingcompensationcostsundercontrol.Competitivesalarypackagesareessential,buttheymustalignwiththecompany’sfinancialcapabilitiesandmarketstandards.Byproactivelyaddressingtheseculturalandcompensationchallenges,employersinMainlandChinacanmoreeffectivelyattractandretainthebesttalentinanever-changingmarket.Developingadeeplyingrainedcorporateculture,offeringcompetitivesalaries,andfocusingonskillsdevelopmentandtrainingarekeyfactorsforsuccess.

·Issue206·March202511

NavigatingChina’slaborpoliciesandregulations

China’slaborlawlandscapehasundergonesignificantreforms,especiallyin2024,aspartofthegovernment’sbroadereffortstoaddressdemographicchallenges,improveworkforcesustainability,andstreamlineregulatorycompliance.

Notablechangesincludedthephasedincreaseinthestatutoryretirementage,adjustmentstopensioncontributionrequirements,andtheintroductionofsimplifiedrulesforcross-borderdatatransfers.Thesechangeshavedirectlyimpactedworkforcemanagement,socialsecuritypolicies,andcompliancerequirementsforbothdomesticandforeign-investedenterprises.

AsChinamovesinto2025,furtherreformsareexpectedinareassuchasillnessanddisabilitybenefitsunderthebasicpensionsystem,flexibleretirementoptions,andupdatestopublicholidaypolicies.Employerswillneedtostayup-to-datewiththeseevolvingregulationstoensurecompliancewhilemaintainingbusinesscontinuityandprotectingemployeewelfare.

Theseongoingadjustmentspresentbothachallengeandanopportunityforbusinessestorefinetheirhumanresourcesstrategies.

Digitalrecruitmentgap:Localplatformsversustraditionalchannels

TherecruitmentlandscapeinChinahasrapidlyshiftedfromtraditionalmethodstodigitalplatforms,whichofferuniqueadvantagesandchallenges.ProminentChinesejobportalssuchas51job,Zhaopin,BOSSZhipin,andLiepincatertoabroadrangeofrecruitmentneeds.51jobandZhaopinarerecognizedasmajornationalplatforms,whileLiepin

targetsthemiddletohigh-endjobmarket,makingitidealforsourcingskilledprofessionals.BOSSZhipin,aplatformthatfacilitatesdirectcommunicationbetweenjobseekersandemployers,isrevolutionizingtherecruitmentprocessbystreamlininghiringandimprovingefficiency.

Forinternationalrecruitment,platformslikeHiredChinacate