(Yicai Global) June 24 -- Chinese companies, particularly small firms, are scaling back their hiring plans and some are even giving up on recruiting new staff amid the uncertainty brought about by Covid-19, according to the findings of a new survey.

Sixty-three percent of employers have delayed, reduced, or stopped recruiting, a report published yesterday by Chinese careers website 51Job showed. It polled 950 companies between May 25 and June 5.

Twenty percent of small and medium-sized enterprises have suspended hiring, while more than 30 percent have cut or are planning to cut their headcounts. SMEs are mainly trying to get by and have little interest in attracting new employees in the next three months, the report said. 

Employers are increasingly cautious and inclined to opt for conservative talent management strategies amid uncertainty caused by the pandemic and resulting Covid-19 restrictions, Feng Lijuan, chief human resources expert at 51Job, told Yicai Global.

Most employers predict it will take longer for them to get back to normal after this year's Covid-19 outbreaks than the initial wave in 2020, so they have started tightening their belts while curtailing recruitment, as well as calling a halt on pay rises and bonuses.

Unemployment Rate

Youth unemployment ticked up in May from the month before, while urban joblessness fell overall. The rate among people aged 16 to 24 rose to 18.4 percent last month from 18.2 percent in April, an official at the National Bureau of Statistics said on June 14. NBS figures showed the same day that urban unemployment fell to 5.9 percent, down from a 26-month high of 6.1 percent in April.

The jobless rate among people aged 25 to 59, the main labor force group, was 5.1 percent in May, versus 5.3 percent in the previous month. The government targets an overall unemployment rate of about 5.5 percent this year.

The arrival of this summer’s graduation season is set to bring further pressure to bear on youth employment, with nearly 10.8 million university graduates set to flood into the labor market.

Business Shrinkage

Thirty-four percent of the employers 51Job surveyed said their business had shrunk 10 percent to 20 percent in the two months ended May 31, the period of Shanghai's lockdown, while 27 percent said the contraction ranged from 20 percent to 50 percent.

Among those severally affected or even bankrupted by the pandemic, the proportion of micro firms was more than five times that of larger companies. 

Almost all industries have been hit in one way or another, but the impact varies across sectors. Large firms suffering the most were in transport and logistics, while the worst affected SMEs were often caterers, retailers, and in tourism, according to the report.

Though hiring is tepid, certain sectors have labor shortages. Feng said logistics, construction engineering, and manufacturing lack frontline workers and digital technology experts are still in high demand at home and abroad. There is also still a strong need for more labor in farming, biopharmaceuticals, and in the fields of medical devices and semiconductors.

Editors: Tang Shihua, Emmi Laine, Xiao Yi