SMEs in China in the covid-19 era. The impact on recruitment and executive search.
In China, SMEs account for almost 97% of enterprises. These SMEs are essential in China, providing huge amounts of employment opportunities and representing the most important source of jobs in China, accounting for 80% of the non-government labor force.
SMEs in China have had to cope with the difficulties resulting from the covid-19 measures, which have affected business, recruitment and, more specifically, the executive search field. This is all due to political and economic insecurities caused by Covid- 0 policies.
These, added to the fact that the talent pool in China is shrinking and the foreign talent leaving the country, have made it hard for companies in China to find and retain talent, increasing the demand for executive search partners.
So, because SMEs ensure more than 80% of employment in China, it has become vital for establishing the country’s economy to ensure SMEs´ employment at all levels. To address this situation, the Chinese government established measures that include training subsidies and social insurance premiums that can be paid on a deferred basis and has cut taxes and fees.
These measures have already provided 34.7 billion yuan ($5.17 billion) to help SMEs in China in the first quarter of 2022, supporting the employment situation with 1.57 billion for training subsides and 22.78 million vocational training vouchers across China.
On the executive search side and in order to increase the availability of executive talent, the government has given access to capital and loan facilities to foreign companies new in China, through alternative sources of SME financing. Also, a five-year plan for increasing professionalism and improving innovation capacity has been proposed by the Ministry of Industry and Information Technology (MIIT).
These measures will help reduce SME operating costs and increase employment stability. The measures are expected to help restore market expectations and increase market confidence which, combined with telecommuting facilities and other work flexibilities, can help make China's SMEs more attractive to local and foreign executives.
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