The reform of the supply front, a term frequently appeared in the statement of top government officials, has been officially launched since the Central Economic Working Conference of last year. NPC and CPPCC in recent days have worked out details regarding the implementation of this policy. Considering this, the main purpose of the reform on the supply front is to carry out structural reform on the supply front and achieve the best allocation of all elements, so as to drive the growth of supply and demand together, and to optimize the development and quality of economy. Thus, the reform of the supply front, also a new reform on economic sector, is an appropriate strategy of the State to solve current economic issues.
The development of enterprises is very vulnerable to economic environment. On the other hand, enterprises are showpieces for the economic development of industries and even the country. The reform of the supply front is a significant movement that will affect market competition in every industry and from which all enterprises, as well as an inspiration for all enterprises to discover optimized resources and rebuild their own advantages.
The demand side is composed of investment, consumption and export, while the supply front contains land, capital, labor and innovation. The main focus of the structural reform of the supply front, sharing the same objectives with the “four battles” proposed in the Central Economic Working Conference of last year, according to experts, are:
To Resolve Overcapacity
To Reduce Enterprise Cost
To Digest Real Estate Inventory
To Prevent Financial Risks
Among them, to reduce enterprise cost has the most direct relation with the benefit of enterprises. To this end, the State will reduce the explicit cost of enterprises from following aspects:
First, to continue the reform of the price of resource goods and to reduce the raw material cost of enterprises;
Second, to reduce tax and commodity price, promote depreciation and reduce the finance and tax cost of enterprises;
Third, to push the marketization of interest rate and to lower the financial cost of enterprises along with the reduction of interest;
Fourth, to carry out reform of endowment insurance system and to cut down the labor cost of enterprises.
The above strategy is a strong signal that labor cost has jumped to the top of explicit cost list of enterprises. In this new round of economic reform, labor cost of enterprises has received special concern from the State. Out of the consideration of improving people’s livelihood, the State has launched specific policies directly and indirectly to help enterprises reduce labor cost. On the occasion of new national reform and under the call of the government, all enterprises shall take the opportunity to find out more solutions for reducing labor cost, follow the direction of national policy, and to enhance their own foundation and energy to welcome a comprehensive reduction of enterprises and win a better place in market competition in the future.
As a domestic leading HR service agency, Talent Spot is very concerned about troubles and problems in the recruitment of enterprises. The service system it established and upgraded all the time based on the actual situation and demands of enterprises has remarkable effects in cost control and promotion of business development. Based on our market study over the years and our service experience with several global top 500 enterprises and in various industries, we found that talent outsourcing is an effective way for enterprises to control labor cost, satisfy labor demands in management and operation and to improve production quality.
Two major benefits of talent outsourcing service:
Firstly, the recruitment, training, payment and welfare management, entry and demission management, staff management and other similar affairs are all managed by third-party service agency, which will dramatically reduce the manpower and management cost of enterprises;
Secondly, HR service institutions can provide professional personnel with rich practical experience in respective industries, who have strong adaptability to their new roles and are able to support the business development of the enterprise.
Of course, besides above mentioned apparent cost control effects, talent outsourcing can better and practically solve the recruitment troubles of enterprises, while reducing lots of invisible costs. Thus, enterprises will be able to develop their business with ease.
Lily Chen, Senior Supervisor of Talent Spot, has abundant experience in internal HR management of enterprises. Based on her own practice, she has summarized several major and common troubles regarding recruitment that enterprises meet at present and examples for solving these troubles with talent outsourcing service:
1. Limited size of personnel force and time-consuming application for becoming regular staff
For a large-scale enterprise, especially MNC-owned institution in China, application for becoming a regular staff is a time-consuming job that costs great effort. To some extent, such situation would hinder the business development and talent recruitment of the enterprise or institution.
An America-based Global Top 500 enterprise that Talent Spot used to serve once had an urgent demand for recruiting over 200 administrative, HR and financial personnel in 30 days, out of its rapid business expansion in Asia-Pacific region. However, its limited size of personnel force was not available to cover all newly recruited workers. Moreover, the approval of application for becoming a regular staff required 60 days, far longer than the specified limit for recruitment.
The talent outsourcing solution provided by Talent Spot has broke this limit. It not only helped the enterprise recruit workers it needed in a limited period, but also ensured newly recruited workers arrived in time. Under the talent outsourcing solution, enterprises could consider turning outsourcing talents into regular workers based on its own demands, so as to ensure smooth business development.
2. Demands for project workers and short-term employees hard to be satisfied
Sometimes, enterprises might have demands for short-term employees for some temporary projects arising from their rapid business development that their recruitment departments are not ready to cope with.
A large-scale manufacture enterprise used to be involved in this kind of trouble. Its recruitment department confronted with a great challenge of recruiting over 20 short-term and high-quality technical personnel within a limited and short period, which seemed to be impossible to accomplish.
A superior outsourcing service provider always focuses on accumulating abundant human resources in various industries, in order to address above mentioned challenges. Talent Spot supplied the enterprise with high-quality talents in the form of talent outsourcing. The enterprise could decide to renew or terminate the contract with these short-term talents upon the completion of the project.
3. High Turnover rate of employees and low efficiency of recruitment
As new-generation employees gradually become the major part of an enterprise, many enterprises are facing the challenge of high turnover rate of employees. A large-scale automobile manufacture enterprise, used to be under the service of Talent Spot, once run into a shortage of employees in its Finance Shared Service Center in Shanghai, which had dramatically affected the routine operation of the center. With its profound reservation of talents, Talent Spot provided this enterprise many experienced employees, who were able to start working upon employment, helping the enterprise to solve the problem and promoting the normal operation of the finance shared service center while reducing the training cost at the early stage.
4. Demands for new ways of recruitment to promote flexible development under uncertain external economy
In the times of VUCA, it is necessary for every enterprise to develop a rapid adaptability to changes. Dealing with changes requires the courage to try and make mistake, as well as the awareness of early preparation and risk prevention. Various new regulations concerning recruitment issued by the government are reminding enterprises to maintain the attitude of change at any time, not to violate the legal requirements. Talent Spot’s customers want to attain a diversified business development by introducing new ways of recruitment while maintaining their current organization and ensuring compliance with new laws and regulations.
Talent Spot provides customers with talent outsourcing service and consultation service, helping them mitigate legal and regulatory risks and avoid invisible losses.
Along with the constant implementation of reform of the supply front, the State will definitely devote greater efforts to reduce enterprise cost. All enterprises are expected to grasp this opportunity and take the advantage of talent outsourcing to achieve constant control of labor cost and further business development.
