China Labor Market Perking Up in the Third Quarter 2016

The CIER index score is calculated by dividing the number of job vacancies during a specified period by the number of unique job seekers that apply to jobs during the same period. A CIER index score of more than 1 indicates that confidence in new career opportunities is high among job seekers. A CIER index score of less than 1 indicates that confidence among job seekers is low.

Based on data from Zhaopin's online platform, the quarterly CIER Employment Index is jointly published by Zhaopin and  the CIER at Renmin University.  The index identifies the overall trend in China's employment market, and has become the leading barometer of China's labor market and macro-economic environment.

China Third-Quarter Labor Market Highlights:

• The labor market in China is picking up, with the CIER index rising to 2.22 in the third quarter of 2016 from 1.93 in the second quarter of 2016.
• Internet and e-commerce continued to be the best-performing sector and energy/mineral/mining/smelting remained as the worst-performing sector.
• Northeast China is still the region with lowest CIER index score, but the increase in recruitment demand has accelerated with more government supports.
• While the job market in the first-tier cities of China has become more saturated, recruitment demand in the second- and third-tier cities surged.
• Micro-sized companies continued to create tremendous job demands amid a boom in start-ups.
• The CIER index is expected to keep the upward trend in the fourth quarter of 2016.

China labor market picking up in the third quarter

The job market in China had been on a cooling trajectory since the beginning of 2015, with the CIER index declining in most quarters. After a seasonal rebound to 2.09 in the fourth quarter of 2015, the CIER index dropped to 1.71 in the first quarter of 2016. As the economy stabilized, the job market improved, lifting the CIER index for two consecutive quarters.

Excluding the effects of seasonality and changing demographics, which have traditionally resulted in a long-term rise in CIER index scores, the quarterly adjusted CIER index has stabilized, indicating an improving labor market in China.

According to Zhaopin's data, total online recruitment demand increased by 35% year-over-year in the third quarter of 2016, compared with 21% year-over-year growth in the second quarter of 2016. With the impact of accelerating reform on China's economic structure, more industries and enterprises have restored their growth momentum, creating greater demand for talents.

CIER index by sectors

The CIER index ranking by sectors remained largely unchanged in the third quarter of 2016. However, the polarization trend persisted. Internet and e-commerce continued to be the best-performing sector with a CIER index of 7.28. Energy/mineral/mining/smelting was still the worst-performing sector with a CIER index of only 0.20.

In the third quarter of 2016, internet/e-commerce, insurance, funds/securities/futures/investment, traffic/transportation and intermediary service sectors were the best-performing sectors by CIER index rank. Internet, finance and transportation industries have been booming with the new economy, creating huge job demand.

The worst performing sectors by CIER index rank in the third quarter of 2016 included energy/mineral/mining/smelting, inspection/testing/authentication, printing/packaging/papermaking environmental protection, and petroleum/petrochemical/chemical, which are all traditional manufacturing industries suffering from over-capacity.

The real estate sector was extremely hot, with surging prices in the first-tier and the emerging first-tier cities. Total recruitment demand in the industry increased by 19% in the third quarter of 2016 year-over-year. Job demand from the emerging first-tier cities jumped 33% year-over-year with more housing supplies in key cities such as Nanjing and Hangzhou. Due to a shortage of land supplies and limited projects on sale, recruitment demand in the first-tier cities actually declined by 5% year-over-year.

The financial sector saw recruitment demand increased in the third quarter of 2016 by 26% year-over-year, below the average growth of 35% nationwide. Growth in job demand from the emerging first-tier cities and the second-tier cities was also higher than the increase in the first-tier cities. Demand from micro- and small-sized companies increased the most among companies of different sizes.

IT and internet sector continued to boom with job demand jumping 45% in the third quarter of 2016 year-over-year. The demand was driven by growth in shared economy, VR, AR and live streaming platforms. Within this sector, demand in internet/e-commerce and computer software rose 55% and 49%, respectively. The growth in online games and IT service was 16% and 3% in the third quarter of 2016, respectively.

Traffic/transportation sector was under the spotlight again with recruitment demand surging 74% in the third quarter of 2016 year-over-year. The central and local governments announced new public-private partnership investments in transportation and other infrastructure projects, which are expected to create more jobs in transportation construction, rail transit operation and maintenance in the upcoming years.

CIER index by regions and cities

In the third quarter of 2016, Eastern China enjoyed the highest CIER index score of 1.75, followed by 1.69 for Central China and 1.59 for Western China. Northeast China was still the lowest with a CIER index score of 1.4.  The recruitment demand increased the most in Central China, up 55% in the third quarter of 2016year-over-year, followed by Western China, up 48%. Northeast China saw job demand up 36%, higher than 29% for Eastern China in the third quarter of 2016.

The government has introduced new initiatives to rejuvenate the economy in Northeast China. As a result, the job demand in the region has picked up. The 36% increase in the third quarter of 2016 was much higher than the 14% growth in the second quarter of 2016.

The Second- and third-tier cities continued to create more jobs in the third quarter of 2016 and enjoyed high CIER index scores of 1.63 and 2.22, respectively. The job demand in third-tier and below cities grew 73% in the quarter year-over-year, followed by 46% increase for second-tier cities. The first-tier cities only had a 20% growth in job demand, as some companies left these cities due to rising costs.

CIER index by size of companies

Micro-sized companies (companies with fewer than 20 employees) had the highest CIER index score of 3.11 in the third quarter of 2016, followed by 1.42 for large companies (companies with more than 10,000 employees) and 1.01 for mid-sized companies (companies with 500 to 9,999 employees). Small-sized companies (companies with 20 to 499 employees) scored the lowest at 0.84.

The CIER index for micro-sized companies declined to 3.11 in the third quarter of 2016 from 3.58 in the second quarter of 2016. This was caused by an increase of job seekers. More and more job seekers are now willing to work for start-up micro-sized companies. This is also an indication that China's industry structure is in transition from labor-intensive industries to more knowledge-intensive industries. The quality of talent is more important than the quantity of talent.

Labor market outlook

The CIER index is very likely to keep the upward momentum in the fourth quarter of 2016 with the stabilizing economy, seasonality factors and the long-term demographic trend.

About Zhaopin Limited

Zhaopin is a leading career platform in China, focusing on connecting users with relevant job opportunities throughout their career lifecycle. The Company's zhaopin.com website is the most popular career platform in China as measured by average daily unique visitors in each of the 12 months ended June 30, 2016, number of registered users as of June 30, 2016 and number of unique customers^[2] for the three months ended June 30, 2016. The Company's over 120.0 million registered users include diverse and educated job seekers who are at various stages of their careers and are in demand by employers as a result of the general shortage of skilled and educated workers in China. In the fiscal year ended June 30, 2016, approximately 36.9 million job postings^[3] were placed on Zhaopin's platform by 509,813 unique customers including multinational corporations, small and medium-sized enterprises and state-owned entities. The quality and quantity of Zhaopin's users and the resumes in the Company's database attract an increasing number of customers. This in turn leads to more users turning to Zhaopin as their primary recruitment and career- related services provider, creating strong network effects and significant entry barriers for potential competitors. For more information, please visit http://www.zhaopin.com.

Safe Harbor Statements

This press release contains forward-looking statements made under the "safe harbor" provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and the U.S. Private Securities Litigation Reform Act of 1995.  These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates," "confident" and similar statements. Zhaopin may also make written or oral forward-looking statements in its reports filed with or furnished to the U.S. Securities and Exchange Commission, in its annual report to shareholders, in press releases and other written materials and in oral statements made by its officers, directors or employees to third parties. Any statements that are not historical facts, including statements about Zhaopin's beliefs and expectations, are forward-looking statements that involve factors, risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Such factors and risks include, but not limited to the following: Zhaopin's goals and strategies; its future business development, financial condition and results of operations; its ability to retain and grow its user and customer base for its online career platform; the growth of, and trends in, the markets for its services in China; the demand for and market acceptance of its brand and services; competition in its industry in China; its ability to maintain the network infrastructure necessary to operate its website and mobile applications; relevant government policies and regulations relating to the corporate structure, business and industry; and its ability to protect its users' information and adequately address privacy concerns. Further information regarding these and other risks, uncertainties or factors is included in the Company's filings with the U.S. Securities and Exchange Commission. All information provided in this press release is current as of the date of the press release, and Zhaopin does not undertake any obligation to update such information, except as required under applicable law.

For more information, please contact:

Zhaopin Limited 
Ms. Daisy Wang 
Investor Relations 
[email protected]

ICR Beijing
Mr. Edmond Lococo
Phone: +86 10 6583-7510
[email protected]

Photo - http://photos.prnewswire.com/prnh/20161020/430825
Photo - http://photos.prnewswire.com/prnh/20161020/430819

SOURCE Zhaopin Limited

Related Links

http://www.zhaopin.com