The pandemic-induced disruption has precipitated substantial transformations in the Chinese work environment and expedited shifts within the labor market landscape. These changes encompass altered perspectives on flexible work arrangements and an increased emphasis on salary security and professional growth. In this discussion, we delve into the post-COVID-19 metamorphosis of China’s workplace and labor market, as well as explore strategies for companies to effectively respond to and fulfill the evolving aspirations of their Chinese workforce.
The work landscape in China has experienced a profound transformation in the aftermath of the COVID-19 pandemic. With the pandemic compelling millions to embrace remote work and adjust to novel norms, Chinese workers have developed fresh expectations and perspectives regarding remote or hybrid work setups, job security, and regional preferences. These shifts also align with more enduring changes in Chinese work culture driven by generational and demographic shifts.
This article delves into the intricate transformations within Chinese work culture, shedding light on the evolving perspectives concerning workplaces and career development since the onset of the pandemic. It also explores strategies for companies to effectively respond to these changes, ensuring their competitiveness and enhancing employee retention.
Shifts in Worker Expectations and Attitudes in China:
Remote Work and the Quest for Greater Flexibility:
Despite the pandemic necessitating that millions work from home for extended periods, the adoption of remote work in China has not mirrored trends observed in other markets. Prior to the pandemic, remote work was exceedingly rare, and companies were hesitant to endorse even hybrid or flexible work arrangements. According to a report by Peking University, remote work accounted for only approximately 0.14 percent of job listings in 2019, a figure that surged fourfold to 0.58 percent in 2021.
However, the desire of Chinese workers to engage in remote work presents another question that lacks a clear-cut answer.
A survey conducted by The Paper in May 2022 probed respondents about their sentiments concerning work-from-home arrangements, yielding a generally mixed array of responses.
More than 50 percent of respondents indicated that work-from-home arrangements actually extended their working hours, as the boundary between clocking in and out became less distinct. Among these respondents, 80 percent pointed out that working from home blurred the lines separating work from personal life.
Individuals occupying highly collaborative roles also reported that remote work made it more challenging to fulfill their job responsibilities. Workers also cited household chores as a significant distraction.
Certainly, the repercussions of lockdowns during the pandemic are expected to influence perceptions of working from home, especially as movement restrictions extended beyond typical work hours. According to a May 2022 survey conducted by The Paper, only 34 percent of respondents reported positive experiences while working from home during lockdowns. However, this figure soared to over 64 percent when work-from-home arrangements were not related to pandemic-related restrictions.
Another survey, carried out by Kurun Data and published by The Paper in 2023, revealed that approximately 28 percent of respondents expressed a preference for remote work, while another 28 percent stated that they had no particular preference between working in the office or from home. Additionally, more than 45 percent of respondents rated working from home with a score of 9 to 10 out of 10.
Among the primary advantages of working from home highlighted in the 2023 survey were reduced physical contact, lowering the risk of contracting COVID-19, shorter commutes, and increased flexibility in work hours. Conversely, the main disadvantages included delays and challenges in managing urgent work tasks, less efficient communication, and the inability to complete certain tasks outside of the office.
It’s worth noting that, unlike in some Western or industrialized countries, many white-collar workers in China reside in or near urban centers, often in smaller apartments that may be less conducive to remote work. Additionally, multi-generational households are more common, and workers in smaller and potentially more cramped living spaces may find remote work less desirable, depending on their home situation.
While full-time remote work may not be the preferred choice for most, there is a growing expectation among workers for companies to offer increased flexibility in their work arrangements.
In a survey conducted by Peking University in early 2022, job seekers were asked whether they would like the option to work from home, without considering the pandemic’s influence. The results showed that 95 percent of the over 3,500 respondents expressed a desire to have the option to work from home at least one day a week, with approximately half of them expressing a preference for working from home at least three days a week, and 20 percent indicating a desire to work from home full time.
In line with these findings, 57 percent of job seekers expressed a desire for their companies to permit regular remote work from home, while 16 percent conveyed that they didn’t necessarily need to work remotely but wished for companies to offer more flexible work hours and commuting options.
The survey from Peking University identified similar pros and cons of remote work arrangements as The Paper’s survey, with flexible hours and reduced commute times being the primary advantages. However, a prevalent concern among respondents was the assumption that companies might offer lower salaries to employees working remotely.
Despite clear worker preferences for a hybrid model, many companies remain hesitant to embrace remote work arrangements. Managers often voice concerns about potential impacts on productivity and team dynamics. The 2022 survey by The Paper revealed that the primary reason companies allowed remote work was to meet employees’ expectations, rather than to improve work outcomes.
Nevertheless, offering work-from-home options for the well-being of employees can have positive effects on companies. In early 2022, the online travel agency Trip.com Group implemented a policy allowing employees to work up to two days from home every week, following a trial period. The company found that this hybrid model reduced turnover rates by one-third without adversely affecting productivity.
Embracing Change in Job Opportunities and Employee Mobility:
Despite the economic and job market volatility induced by the pandemic, a recent survey conducted by Michael Page indicates that Chinese employees are increasingly proactive in their pursuit of new job opportunities. Approximately 86 percent of survey participants, numbering nearly 3,000 individuals from mainland China, expressed a favorable attitude towards changing jobs, with 44 percent actively seeking new employment or considering a switch within the next six months.
Moreover, among those who embarked on new job journeys in 2022, a substantial 78 percent remained open to exploring fresh career prospects.
The Michael Page report also unveiled a positive correlation between economic downturns and the inclination to explore new job prospects.
Lily Liu, Head of the Beijing Office and Regional Director of Michael Page, posited that the pandemic-induced economic deceleration might be a driving force behind this trend. As companies adopt cost-cutting measures and budget freezes, many employees perceive job changes as their sole avenue for advancing their job titles or securing salary increases. Additionally, the pandemic’s inherent instability may foster a sense of job insecurity among employees, prompting them to keep an eye on alternative opportunities as a safety net.
This trend underscores the importance for companies to thoughtfully consider the support and growth opportunities they offer to employees to enhance retention. Providing regular feedback and guidance can offer reassurance and demonstrate the company’s appreciation of its workforce, potentially mitigating concerns related to job stability.
Transparent communication regarding career advancement prospects is also pivotal in managing employee expectations, encompassing the provision of clear pathways and guidance for success within their current roles. In cases where immediate salary raises or promotions are unfeasible, offering opportunities for on-the-job training, skills enhancement, or avenues for personal growth within their existing positions may serve as alternatives to boost job satisfaction and security.
Aspirations for Job Stability and Career Advancement:
While the inclination among Chinese employees to explore new job opportunities persists, their appetite for risk and tolerance for salary instability seem to be on the decline. This shift aligns with the sluggish post-economic recovery and stagnant wages experienced during the pandemic, which have left many individuals feeling economically worse off than they were previously.
In the Michael Page survey, 40 percent of respondents expressed concerns about the mounting cost of living, while 22 percent reported not having received any salary increases over the past two years. Michael Page’s analysis of the survey results indicates that these factors are driving employees to seek more secure and predictable compensation arrangements compared to their past preferences. Consequently, employees may be less inclined to accept “riskier” compensation structures like stock options and equity, instead favoring tangible and stable salary and benefits packages.
This shift in mindset could also translate into job seekers exhibiting greater interest in opportunities with larger, well-established companies while becoming more hesitant about positions with smaller firms that have uncertain futures. What was once an exciting prospect, such as joining a small startup with plans to go public, may now be viewed as too risky.
The Michael Page report underscores the need for companies to offer more opportunities for skill development to enhance employee retention. Survey results reveal that a lack of career growth within their current roles is one of the primary reasons for employees changing jobs. Unlike the past, where employees may have been enticed by specific job titles or a company’s brand, they are now more likely to pursue opportunities that provide clear pathways for career advancement.
Companies, including small businesses, can take several measures to address these challenges. This includes establishing stable compensation structures with transparency in pay progression and the performance expectations required to attain them. Furthermore, as employees place greater emphasis on job security and salary stability, it becomes increasingly vital for companies to understand employees’ career aspirations and their expectations for future growth within the organization.
Trends in Youth Employment Post-COVID-19:
An examination of China’s labor market in the aftermath of COVID-19 would be incomplete without addressing the employment landscape for young workers. Young graduates are entering an increasingly competitive job market, which faces the challenge of accommodating a larger number of graduates with a limited number of available positions.
Expectations of college graduates, particularly those who have pursued education abroad, are frequently unmet by the domestic labor market. The prevalence of low salaries and unattractive job prospects has led to a growing phenomenon where more and more young individuals are opting not to enter the job market altogether. Instead, they often return to their family businesses or adopt the lifestyle of “full-time kids.”
Even among the younger workforce that does secure employment, there is a growing inclination to remain in or near their hometowns, avoiding the larger and more costly eastern and southern Chinese cities.
This trend is not confined solely to the younger generations. Demographic data from 2022 reveals that an increasing number of migrant workers, broadly defined as individuals who migrate from rural areas to seek employment in urban areas, are opting to find work within their home province or a neighboring province.
Furthermore, the data suggests that workers are gravitating towards prefecture-level cities or provincial capitals, where the cost of living is lower. For instance, Chongqing municipality witnessed a marginal population increase in 2022, despite having a negative rate of natural population growth (total birth rate minus death rate), indicating a positive net influx of immigrants. In contrast, Guangdong province experienced an overall population decline, despite recording the highest natural population growth rates in China at 3.33 per mille. Major cities such as Shanghai and Beijing also witnessed substantial declines in population.
While these phenomena are not entirely novel – the tradition of migrant workers traversing the nation in search of employment has waned over the past decade – the pandemic may have accelerated these trends. Movement restrictions and limited job opportunities during the pandemic made it more convenient for individuals to stay close to their homes. Additionally, stagnant wages during the pandemic prompted many to reconsider the appeal of life in sprawling metropolises, which sometimes fail to deliver on their promises of improved economic opportunities.
As highlighted in a report on youth employment in China by the Asian Development Bank, “The growing number of college graduates and the limited mobility of the workforce appear to be a nationwide trend. To shift the location preferences of young workers away from top-tier cities and industrial hubs towards less-developed cities or their provincial hometowns, it is imperative to establish an adequate number of quality jobs and ensure stability in labor markets.”
Simultaneously, younger workers are moving away from traditional manual jobs, particularly in manufacturing and construction, which were prominent sources of employment for earlier generations. Instead, they are gravitating towards new job categories within the service sector and the digital economy, such as couriers and delivery drivers, which have largely supplanted manufacturing roles among this demographic. This shift is occurring despite the generally modest compensation associated with these jobs, as they offer a high degree of flexibility (for instance, delivery drivers often have the liberty to choose their work location and hours) and are relatively less physically demanding than positions in manufacturing and construction.
In a modest shift of perspective, government and public sector positions are regaining popularity. These roles, often referred to as the “iron rice bowl” for their inherent stability, had fallen out of favor as individuals pursued the allure of higher earning potential and prestige offered by rapidly expanding private industries, particularly in the technology and digital sectors. However, many of these industries have lost their luster due to negative reports of overwork and instability, with companies facing closures or staff layoffs.
The growing preference for stability and consistent working hours associated with government jobs among younger workers mirrors the broader trend toward seeking job security that has intensified since the pandemic.
The evolving attitudes and expectations surrounding work among the younger generation necessitate adaptations by companies to attract and retain young talent. To align with the desire for stability among younger workers, HR departments should emphasize the potential for long-term job security and career advancement within the company.
Furthermore, companies can explore the option of expanding their presence to more affordable and smaller cities to accommodate the trend of workers staying closer to their hometowns. In cases where physical expansion is impractical, companies can also consider offering remote positions, which would entail providing the necessary tools and technologies to facilitate remote work.