Replacing print-based solutions, fast-evolving online platforms utilize data and AI to meet the needs of employers, job seekers

Job seekers pack an employment fair in Hangzhou, East China’s Zhejiang province. More job seekers are said to be turning to second-tier cities like Hangzhou, Chengdu, Xi’an and Tianjin. (EYEPRESS NEWS / EYEPRESS)

As China’s economy matures, recruitment processes have also undergone significant transformation. Rapidly evolved online services have usurped the role of traditional print media in this area. 

According to figures from Beijing-based consultancy iResearch, revenue in China’s online recruitment sector in the first half of 2017 exceeded 2.7 billion yuan (US$425 million) and was up nearly 19 percent from a year earlier.

Leading the charge in China’s online recruitment space are the heavyweights 51job and Zhaopin. While their market dominance falls short of a duopoly, it is clear that their rivals have a lot of catching up to do.

Emerging Chinese companies are making some inroads into the lucrative online recruitment market. BOSS Zhipin, 100offer, Jianzhimao and DouMi are all having an impact.

According to iResearch data, 51job and Zhaopin had total revenue of 1.28 billion and 0.98 billion yuan, respectively, in the first half of 2017. Extrapolating this to year’s end, it represents jumps from 2014 revenue of 35 percent and 65 percent, respectively, over the three-year period.

The main driver of sales for both companies is online recruitment.

“Online recruitment services contribute about 65 percent of (our) company’s total revenues,” Kathleen Chien, 51job’s chief operating officer, told China Daily Asia Weekly.

The name 51job “is a play on words”, Chien said, explaining that when you say ‘5’ and ‘1’ in Putonghua it sounds a lot like “I want”, so putting them together means “I want a job” or “no worries about a job”. 

“We now focus on providing online recruitment services through four different brands/platforms, mainly targeting white-collar workers,” said Chien.

These include 51job.com for young professionals, Yingjiesheng.com for new graduates, 51jingying.com for experienced professionals, and Lagou.com for technology industry talent.

The boom in online recruitment has been mirrored in reverse by traditional print media, which is rapidly being rendered redundant.

“Print-based recruitment is struggling to compete,” said Paul Arkwright, publisher and editor-in-chief of Hong Kong-based HR Magazine. “Online recruitment has far greater exposure, and recruiters using the internet have a far greater pool of potential talent to pull from. 

“Online recruiting is also much faster and can utilize data and AI (artificial intelligence) to supplement the process. Passive recruiting and referral recruiting efforts are also ramping up,” Arkwright said.

The big recruiters in China are making the most of the appeal of digital recruiting.

“We started transitioning away from print advertising services in 2011 and ceased providing these services in 2015,” said Chien.

Eugene Sun, head of strategy and corporate development for Zhaopin, scoffed at the notion that China’s maturing economy is reducing the country’s employee-to-job ratio.

“China is experiencing healthy growth. There are ongoing structural changes of note, some of which have led to salary growth and accelerating job changing,” Sun said.

“If you look at the CIER Index compiled in our partnership with Renmin University, the China Institute for Employment Research and the National Bureau of Statistics, the ratio of talent demand to supply has been peaking and is now over 3 — meaning there are three times as many positions as there are candidates,” he said.

“This is a rough macroeconomic guide but shows that there is a mismatch between demand and supply of talent.”

Sun added that demand in so-called second-tier cities is a significant driver of job growth on the Chinese mainland — despite job seekers’ preference for prime urban positions.

“Cities like Hangzhou, Chengdu, Xi’an and Tianjin are gaining more and more attention from job seekers, in some cases outpacing top-tier cities like Guangzhou.”

China’s job boom is not across the board, however, with certain sectors much more highly in demand than others.

“Besides this mismatch between business activity in lower-tier cities and talent urbanization, we also see service sectors outpacing more traditional sectors. Consumer/retail, hospitality, medical tech/internet … each has shown strong growth from what we see, while other sectors have been growing more slowly or are flat,” Sun explained.

“There has also been a disproportionate demand growth for traditional tech-industry roles, from UI/UX (user interface/user experience) design and programming to data analytics and AI. Non-tech industries are building out such teams, leading to intense competition, salary inflation and accelerating job changes.”

Like Zhaopin, 51job is also aware of the sector’s potential, having recently invested US$120 million in tech recruitment specialist Lagou.

“Lagou has established a solid brand in the area of tech hiring. We believe there is a growing and meaningful supply-and-demand imbalance for skilled technology workers in China. We look forward to working together with Lagou to address this problem,” said 51job’s Chien.

She added that recruitment processes have changed significantly in recent years.

“The relationship dynamic between employers and job seekers has evolved over the last decade. As China’s economy has shifted from manufacturing to service-oriented, the need for skilled and educated workers is intensifying at a faster pace than there are workers who have these required skills. There is more competition for top talent among companies,” Chien said.

“Also, the growing affluence of the typical Chinese family and a full generation of only-children has resulted in a group of ‘millennial’ job seekers today that are more selective, independent-thinking and socially conscious when it comes to employment opportunities.”

One significant development that has grown with the rise of online recruitment in China is data matching — a powerful method of pairing jobs with candidates. For an online recruiter like Zhaopin — which has an estimated 140 million users on its online recruitment portal — matching candidates and opportunities is an invaluable asset.

It remains a significant challenge, however, to harness this effectively.

“There is no silver bullet when it comes to hiring,” said 51job’s Chien. “We believe that the ‘business of people’ is fundamentally one of the most difficult things that companies face.”

It is not simply a matter of matching a candidate’s skill set and the job description.

“Company culture is hugely important, and alignment of values has become a key indicator of how successful a hire is,” said HR Magazine’s Arkwright.

“While looking at technical or soft skills is still the baseline for determining whether a candidate has the raw ability to do the job, employers should be looking at how those candidates fit with their organization’s core values to determine if they can create value for the bottom line,” he said.

In an era of increasingly digitized recruitment, Arkwright pointed out that protecting data falls firmly within the purview of HR (human resources). 

“HR should be devoting greater time and resources to properly safeguarding candidate data,” he said. “Data shouldn’t be seen as some abstract concept but as a tangible resource that should be taken seriously.”

Both Zhaopin and 51job are stepping up their business focus in HR services and HR outsourcing and see this as a future revenue earner as human resources management matures in China.

Chien said: “Our priority is to realize the long-term potential of this market. Therefore, we do not have expansion plans to other countries, but we have been a pioneer in bringing high-quality services (such as training programs) from other parts of the world to China.”

She added that 51job is justified in claiming a leadership position as the largest HR services provider in China in terms of revenue, profitability and market share.

“We are the only Chinese recruitment services company listed on the Nasdaq (since 2004) and currently have a market capitalization of over US$5 billion,” said Chien.

Arkwright pointed out that the big recruiters are likely to face stiff competition from the established “old guard” of HR consultancies. Nevertheless, they remain well placed to succeed.

“Online recruitment in China — especially on the scale of Zhaopin and 51job — brings two immediate advantages over established HR consultancies. The first is the scale of knowledge and access to the enormous and growing Chinese recruitment market; the second is the sheer volume of data on candidates, which can be put to use laterally to provide insights,” said Arkwright.