It’s difficult to put your best foot forward when your China hiring report is released as major financial institutions have just gone into a major meltdown.

Such is life.

Of course, the Hudson Report for July to September 2008 is as deep and accurate as you would normally expect from them. We just have to adjust many of the results downwards.

The trends should be much the same as in the report but the optimism is much less warranted. 2009 looks like a bit of a bust.

Analyzing Results

A good starting point might be to look at the results of the Hudson Report over the last few years. This shows a hiring decline through 2007 until mid-2008, with a little bump up this quarter, possibly attributable to companies getting the Olympics out of the way.

However, if we compare the current report to 3rd QTR last year we find that even that little bump up is not enough to compensate for the gradual drop in hiring over the past year. In the 3rd QTR last year 60% of employers were looking at increasing headcount. This year’s figure is down to 55%.

Salaries are also still an issue in China, as I mentioned two days ago.

Employers here still face the highest salary inflation in Asia. Only 8% of respondents, across all industries, can say they are negotiating lower wages for new managerial hires in the current economic climate. The fact that 8% can do this in a market that generates 25%-30% rises just for changing jobs is itself an indication of things to come. Half of the 8% percent of companies that could get lower new hires salaries say that have reduced these salaries by 6-10%.

Whoever heard of companies offering lower salaries in China and being successful?. Not since 2001 has there been any possibility of this happening.

Any scope for lowering starting salaries, assuming the staff being hired are experienced, is surely indicative of a brewing problem. In the first QTR 2008 Hudson were telling us that staff turnover rates were much higher than than the previous year.

Based on previous experience, any decline in hiring is likely to follow a specific scenario. Things will drift lower for a while, and then go off a cliff. HR departments in China are heavily focused on hiring so they will be hit nearly as hard as external 3rd party recruitment suppliers.

If only we could be sure of if, when and how it comes about that we all have little to do.