How to Use the Five-Year Plan to Hire Great Talent in China

How much of an impact do national economic policies really have on building a modern workforce for your business?

In its 15th Five-Year Plan, the Chinese government outlined 18 quantifiable workforce goals. These include reemploying millions of laid-off workers, ensuring near-universal pension coverage, and strengthening injury protections for gig economy workers.

According to the Ministry of Human Resources and Social Security, the plan introduces a series of new measures and policy breakthroughs tailored to the evolving challenges and priorities facing the human resources and social security sector during the 15th Five-Year Plan period.

For businesses hiring talent in China, these structural shifts call for a prompt reevaluation of their hiring process. And when used the right way, the new plan offers plenty of new opportunities to hire great talent.

To provide expert guidance on how businesses can leverage these national workforce targets, we spoke to Amy Jiang, Associate Director of Morgan McKinley Shanghai

From the shift in recruitment focus to tips for sourcing the best talent and improving employee retention, Amy shares her actionable insights for businesses on how to make the most of the Five-Year Plan:

1. Understand the New Geographical Focus

As part of the 15th Five-Year Plan, the Chinese government plans to allocate more resources to selected third- and fourth-tier cities to increase employment opportunities there. “We are already seeing several of our clients shift or expand their headquarters into these emerging cities,” Amy shares.

Her advice for businesses shifting their headquarters to new locations is to thoroughly analyse which places offer more opportunities, resources, and benefits for their particular business before finalising a location.

The Chinese government also emphasised the importance of employment stability, which is highly linked to social security, one of the major policies the 15th Five-Year Plan aims to address.

“Random layoffs will now be under much stricter regulatory oversight”, Amy explains. “So companies need to be very deliberate with their headcount planning, ensuring every hire is strategic and fully compliant with labour regulations”, she adds.

2. Explore Different Business Hiring Models 

With the 15th Five-Year Plan starting to take effect, Amy believes it is the ideal time for business leaders to rethink their business hiring models. Instead of relying solely on rigid annual headcount budgets, she urges organisations to explore flexible hiring models.

“Combining permanent and contract hiring models according to the needs of the business can help to adapt to fast-changing business needs, while still adhering to new regulations”, Amy notes.

3. Keep Track of the Recruitment Shifts 

Amy highlights that the 15th Five-Year Plan indicates a structured recalibration of the workforce, specifically a shift away from mass recruitment: “The recruitment focus will shift to AI, new energy and biotech and hiring for roles such as basic data entry and routine coding will likely decline”, Amy observes.

In this environment, Amy recommends companies put more focus on candidates' soft skills rather than just focusing on a 100% profile match:

“You never know how the world will change in the AI era. So it’s important to focus on soft skills such as conflict management, communication and collaboration, which will be relevant even when job descriptions evolve”, Amy adds.

4. Expand Your Talent Search Strategy 

The 15th Five-Year Plan aims to reemploy 25 million laid-off workers and help another 6.5 million people facing employment difficulties find jobs. This initiative significantly expands the active talent pool.

Amy’s suggestion for companies to widen their talent search in light of this is to engage with local communities in different cities for sourcing.

With the government organising several communities to help unemployed people in their job search, these groups can help companies discover talent that may not be available through traditional talent sourcing channels.

Partnering with recruitment agencies can further assist companies in the soft skills evaluation of unemployed individuals to determine if they are a strong match for their qualifications.

5. Adapt Your Recruitment Process 

To ensure recruitment processes do not exclude candidates from non-traditional backgrounds, Amy advises focusing on potential and skills rather than relying purely on educational or employment history.

“But the challenge here is that it costs more labour to evaluate candidates so thoroughly in the first screening round”, Amy adds.

Businesses will need to adapt their recruitment process to overcome this challenge. “I know several of my clients use AI assessment channels for the initial skill tests or for personality assessments. I think it's more cost-effective and saves time”, Amy shares.

6. Hire From Diverse Backgrounds 

As diverse professionals re enter the labour market under the new plan, businesses have a prime opportunity to build more dynamic teams:

“When you are hiring from a similar background, you are limiting the profiles available to you”, Amy explains. “And mostly, candidates from the same background will have a similar mindset. This can limit the amount of creative or innovative thinking that’s available in your organisation”, she adds.

By hiring from diverse backgrounds, businesses open themselves up to having people with different ideas that can be beneficial for the business’s growth.

7. Highlight Employee Benefits 

One of the strongest intentions of the 15th Five-Year Plan is its goal to keep coverage under the basic pension insurance system above 95%. Amy suggests that organisations align their internal benefits packages with these national priorities to attract great talent.

“In addition to the pensions, businesses can also offer benefits such as flexible working hours and additional health insurance to improve employee commitment and help them feel valued”, she adds. In her experience working with candidates, Amy has found that the most sought-after benefits are flexible working and medical insurance.

A good hiring strategy can help boost business growth by bringing in the right candidate to support their long-term business goals, Amy concludes:

”For example, the new Five-Year Plan focuses on innovation, green development and high tech industries. So companies need employees who have fresh skills and diverse perspectives”, she adds.

Want to ensure your organisation has the right employees in place for growing your business in light of the latest Five-Year Plan?Speak to one of our consultants to get the guidance you need.