How “cash crunch” is affecting companies’ employment policies

Morgan McKinley November 15, 2013 1 min read

In recent times, Chinese financial markets have coined a popular term ‘cash crunch’.

Emerging cash flow issues have caused companies and labour markets to take a more cautious approach to future economic trends throughout China. At present, with macroeconomic regulations and controls, and the tightening of monetary policy, an increasing number of companies are experiencing shortages in funds, especially those companies that were previously forerunners in the financial industry. One reason for this is that, due to a shortage of cash flow, companies have not been able to maintain a stable workforce, which has led to a loss of talent and a dip in performance levels. In the second half of this year further tightening of funds has been forecasted. This will lead to businesses having to be even more cautious when making decisions, for this reason there will be a delay in or even a withdrawal of previously available vacancies.

As a result of external market conditions, we would suggest to candidates considering a new job to not just consider the specific job but to also consider the company, its operations and what other roles may be available, and also to be clear of their own career path and goals. We also recommend maintaining long-term contact with headhunters so that they can keep up to date with changes that occur in the labour market.

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