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Under pressure:
Global index diagnoses the pressure points in China’s labour market


Updated: 14 Apr 2016
China has been given very high scores for labour market flexibility and overall wage pressure in a global assessment of the efficiency of skilled labour markets in 31 countries.
The Hays Global Skills Index, produced in collaboration with Oxford Economics and released today, scores China’s labour market against seven indicators, or points of potential pressure. For each indicator China received a score out of 10. A score close to 0 indicates little to no pressure, while a score close to 10 shows severe pressure. 
The Index shows that in China, pressure on our labour market comes from two of these indicators. The first is ‘labour market flexibility’, which measures the legal and regulatory environment faced by businesses and for which China scored 8.0.
China’s high score on this category remains consistent with the scores of previous years shows there are barriers restricting the labour market impacting employers’ ability to source skilled labour.
“China has recently taken some steps to make labour market legislation more flexible, which could ease the skills shortage and see this score reduce in next year’s Index. For example, the government’s recent policy of cancelling occupational qualifications will have a positive impact on China’s future job market flexibility and will encourage innovation in our skilled talent pool. It should reduce constraints on talent movement and encourage a more active, fair and competitive job market.
“The impact of this policy is yet to be fully seen, but should show up in next year’s Index in the form of reduced pressure in our ‘labour market flexibility’ indicator,” he said.
The second indicator or pressure point is ‘overall wage pressure’. China received a high score of 7.5, showing that wages continue to increase above historic trends.
“While this score is down from 8.4 last year, the score of 7.5 is still very high and shows that employers continue to face wage pressure,” says Simon. “This supports what we’re seeing on the ground, namely overall labour market tightness as employers compete for talent based onsalary increse in both talent attraction and retention. a. It also shows that further salary increases will likely do little to alleviate the skill shortage.”
For the remaining five indicators, the Hays Global Skills Index ranked China fairly positively. Our education system is very well equipped to meet future talent needs (we received 1.2 for ‘education flexibility’), our labour market participation is fairly flexible (2.8 for ‘labour market participation’) and candidates usually possess the skills employers are looking for (4.9 for ‘talent mismatch’). These are all positives for our labour market since they indicate low pressure points.
Interestingly, while China received a high score for ‘overall wage pressure’, it received low scores of 3.8 for ‘wage pressure in high-skill industries’ and a moderate score of 5.0 for ‘wage pressure in high-skill occupations’. As Simon explains, “As China’s economic growth rate moves to more sustainable levels, it is providing some welcome relief for employers in our highly competitive talent market. But overall wage pressure is still a significant challenge, particularly in low-skill industries and functions, supporting sentiments that China’s competitive advantage as a low cost global labour market has eroded significantly in recent years.
“With salaries rising in low-skill industries and job functions, and organisations reducing their reliance on expensive expatriate labour, we are seeing very little wage pressure in high-skill industries and occupations.
“However the employment market is still facing a shortage of skilled candidates, particularly at mid- and senior-levels. As a result, effective talent attraction, development and retention need to remain high on the priority list of CEO’s and HRD’s,” he said.
About the Hays Global Skills Index
The Hays Global Skills Index assesses the efficiency of the skilled labour market in 31 countries, or its ability to supply skilled labour. The Hays Global Skills Index provides a score for each country of between 0 and 10 which measures the pressures present in its labour market. The score is calculated through an analysis of seven equally weighted indicators, each covering different dynamics of the labour market  Three indicators explore the supply of talent, namely education flexibility, labour market participation and labour market flexibility. One looks at talent mismatch. The final three are wage pressure indicators, looking at overall wage pressure, wage pressure in high-skill industries and wage pressure in high-skill occupations.
A score of 5.0 indicates a balanced picture for labour markets, a score close to 0 indicates less intense competition for vacancies, and a score close to 10 shows severe difficulty in finding skills. 
The Hays Global Skills Index report, titled ‘Labour markets in a world of continuous change’,can be viewed at
In China Hays operates from four local offices: Shanghai, Beijing, Suzhou and Guangzhou.
Hays, the world’s leading recruiting experts in qualified, professional and skilled people.
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About Hays
 Hays is the leading global specialist recruiting group. It is the expert at recruiting qualified, professional and skilled people worldwide.

Hays Specialist Recruitment (Shanghai) Co., Limited ("Hays China") operates across the public and private sector, dealing in permanent positions. Hays China’s eighteen specialisms span Accountancy & Finance, Banking, Architecture, Construction, Education, Engineering, Executive, Finance Technology, Human Resources, Hays Resource Management, Information Technology, Insurance, Life Sciences, Manufacturing & Operations, Oil & Gas, Property and Sales & Marketing.

Hays China operates four local offices in Shanghai, Beijing, Suzhou and Guangzhou. It is the local representative office for Hays plc, which is a global company. As at 31 December 2014 Hays employed 8,748 staff operating from 244 offices in 33 countries across 20 specialisms. For the year ended 30 June 2014, Hays placed around 57,000 candidates into permanent jobs and around 212,000 people into temporary assignments. 24% of Group net fees were generated in Asia Pacific.

Hays operates in the following countries: Australia, Austria, Belgium, Brazil, Canada, Colombia, Chile, China, the Czech Republic, Denmark, France, Germany, Hong Kong, Hungary, India, Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New Zealand, Poland, Portugal, Russia, Singapore, Spain, Sweden, Switzerland, UAE, the UK and the USA.