BEIJING (CAIXIN GLOBAL) - As he wandered among the booths of 78 employers recruiting new graduates at Beijing's Renmin University March 30, Chen Jun's hopes of finding just the right job faded.
"There are very few suitable jobs," Chen said. The senior in economics submitted only four resumes at the event, which offered more than 500 job openings.
Yang Yanlin, a postgraduate in agricultural economic management, was similarly disappointed at the event. "There are limited job options for my major, and things aren't going well," Yang said.
Chen and Yang are among the 10.76 million Chinese students who are expected to leave college campuses this year, the largest group of graduates in China's history and 1.67 million more than last year, according to the Ministry of Education.
They are trying to launch careers in the toughest job market in years. The world's second-largest economy faces mounting growth uncertainties due to the Covid-19 pandemic, geopolitical risks and domestic industrial restructuring. Regulatory crackdowns and market contraction in sectors including the Internet, real estate and education have forced employers to cut costs and downsize, limiting recruiting.
At the same time, the mismatch between the job market's demands and the qualifications of many new graduates becomes increasingly visible. According to leading recruitment service provider Zhaopin.com, job openings for new graduates declined 4.5 per cent in the first quarter this year from a year ago.
As the graduation season in June approaches, many students have yet to secure a job offer. At a university in southern China's trade hub Guangdong, only 13.5 per cent of this year's graduates had found a job as at March 28, Caixin learned.
Making the competition fiercer is the rising tide of overseas students returning home amid the pandemic and geopolitical uncertainties. Data from the State Information Centre showed that the number of overseas students returning to China exceeded one million for the first time last year. Meanwhile, job offerings from businesses that usually prefer students educated abroad are shrinking.
The number of Chinese college graduates looking for jobs is expected to continue expanding by more than 1.1 million a year, official data showed. The employment pressure on college students will remain for the next few years, said Li Qiang, a Zhaopin.com vice-president. But that does not reflect insufficient job offerings so much as a structural mismatch between supply and demand, Li said.
The gap between college graduates' job expectations and the market's demands is visible. Data from the Ministry of Human Resources and Social Security (MHRSS) showed that the manufacturing industry accounted for the largest portion, or 38.7 per cent, of demand for talent in China, followed by the wholesale and retail sectors.
But college graduates' most desirable jobs are mostly in sectors including Internet and communications, real estate and construction, culture and media, and finance, data from Zhaopin.com showed. Graduates are either unwilling or not eligible for jobs in sectors that have the most urgent needs for workers, analysts said.
The high-tech chipmaking and low-end manufacturing sectors both have labour shortages, a researcher at MHRSS said. According to a 2016 report issued by the Education Ministry, China's major manufacturing sectors will face a workforce shortfall of 30 million by 2025, with huge gaps in new-generation information technology, power equipment and new materials.
Graduates' preference for jobs in state sectors is growing as students seek more stable careers. Although recruitment of new graduates by all levels of governments has expanded over the years, competition has only become more intense as the number of applicants surges. In 2022, on average 68 people competed for each position in the national civil servant exam, compared with a ratio of 16 to one in 2003.
Even in Shantou, Guangdong province, where the private sector is thriving, there is an increasing trend of students taking civil servant exams to seek government jobs, said Su Junzhi, an employment official at Shantou University.
"This is not only the students' choice but also reflects the mentality change of the family behind them," Su said. The interest in public-sector jobs could be seen as a shift toward job security in the wake of the Covid-19 pandemic and crackdowns on the private sector in areas such as private tutoring and technology.
Tens of thousands have lost jobs as a result of the government-forced overhaul of the private education industry alone. Positions in the public sector are seen as "iron rice bowls". A state job usually means lifetime job security with steady income and social benefits in areas such as housing and education.
A 2021 survey by recruitment site 51job.com showed that 39 per cent of students from China's top-ranking universities preferred state-owned enterprises (SOEs) in their job hunts, reflecting risk aversion and desire for stability, according to Feng Lijun, a human resources expert at 51job.com.
Compared with private businesses, SOEs have recorded more-stable growth in recent years. In 2021, China's SOEs reported 30.1 per cent growth in net profit on a revenue increase of 18.5 per cent.
But the thresholds for entering large SOEs are often high as the employers prefer experienced workers or those with outstanding educational backgrounds, sources from some SOEs said. Since 2020, the central government has pressed SOEs to recruit more new graduates to bolster the pandemic-hit job market. But due to rigid requirements and management systems, a significant increase in the short term is unlikely, an SOE executive said.
The job market for graduates is cooling as businesses in the tutoring, internet and real estate industries that once offered huge numbers of job opportunities are hitting the brakes on hiring after years of acceleration.
The education and tutoring industry hired more than 700,000 new graduates annually in recent years, making it one of the most important job-creation engines, according to Ge Wenwei, a partner of Duojing Capital. But that engine ran out of gas since the summer of 2021 when the industry was shaken by new rules - known as "double reduction" - to reduce the burden on students from homework and after-school tutoring.
Intensified scrutiny of private tutoring services led to the closure of many small and midsize institutions and massive terminations. In many cities, the size of the sector shrank by 90per cent within six months as companies hurried to exit the market. Leading players including New Oriental and TAL Education Group scrambled to revamp their businesses and slashed thousands of jobs to survive.
"There will be recruitment of fresh graduates, but the number is marginal compared with previous years'," said an executive at an online education company. Leading players in Beijing have mostly planned to hire 300 to 400 graduates this year to replace older workers or fill vacancies, compared with 3,000 to 5,000 hired previously, the executive said.
The real estate industry, which was once a preferred destination of fresh graduates, is also cutting its workforce amid a market downturn and an industry-wide liquidity crunch. Since the second half of last year, many developers have halted new hiring and started cutting jobs as business slumped, a headhunting employee said.
Big tech companies including Alibaba Group, ByteDance, Meituan and JD.com have also slowed hiring amid business shifts. In the first quarter this year, the internet industry's job offering for fresh graduates declined 1.78 per cent from a year ago, according to Zhaopin.com.
After years of rapid expansion, Chinese tech companies since late 2020 have faced tightening scrutiny from various fronts, which has led to fundamental changes for the industry, analysts said.
Most internet companies conducted campus recruitment in March. Meituan was said to hand out more than 10,000 offers in its spring college recruitment, Caixin learned. JD.com planned to hire more than 20,000 college graduates this year. At the same time, many tech employers have launched terminations to cut costs.
Firing higher-paid, older workers and hiring new ones has been a common practice by internet companies to cut employee costs, an internet industry recruiter told Caixin. College graduates are cheap, high-quality talent resources, and big Internet companies will not give them up, she said.
Finding a solution
Challenges for fresh college graduates to find jobs have been persistent since the early 2000s when China expanded university enrolment. The problem has only worsened over the years despite all kinds of policies and measures. The crux of the matter is the ever-growing number of graduates who cannot meet the demands of the job market, several human resources experts said.
There has been a mismatch between students' expectations and market realities, they said. The job market mismatch reflects the fact that China's education system has lagged behind the country's industrial transformation, experts said.
Chinese universities have focused on cultivating general-purpose education, which can't meet companies' rising demands for special expertise, said Zhang Chenggang, a job market expert at the Capital University of Economics and Business in Beijing.
The biggest problem for China's higher education system is a disconnect with social needs, said Xiong Bingqi, president of the Beijing-based 21st Century Education Research Institute. In August last year, the State Council issued a job market development plan requiring universities to improve their academic discipline setting to better respond to market demands.
But in practice, universities are hesitant to make major changes due to concerns over heavy costs and potential risks, Zhang said. Experts have long called for China to promote vocational education to improve the structure of the supply of talent.
In September 2020, nine central government department led by the Ministry of Education issued a guideline with the goal of expanding the share of vocational school enrolment and establishing a higher education system for vocational training.
But for many Chinese families, vocational schools are not seen as a promising option as such schools have long been derided as "low-end and low-quality" and inferior to full-fledged universities. To alter that mindset, educational evaluation standards should be diversified, said Chu Zhaohui, a researcher at the Chinese Academy of Educational Sciences.
One of the important pursuits of the modern vocational education system is to cultivate talent suitable for model social development, and that requires the establishment of a social value system that respects the equality of all people, Chu said.
It is also important for China to promote upgrading the industrial structure, develop the regional economy and form a virtuous circle of education and economic development, experts said.
This story was originally published by Caixin Global.