Sharing for Support
Companies pool human resources to meet labor shortages and layoffs
Yang Nan, who was a KTV operation manager in Hangzhou, east China, has recently gained a new identity. With the company closing temporarily since the novel coronavirus outbreak, he has become a temporary worker at a local Hema Fresh, Alibaba’s New Retail grocery chain, in what has become a new trend: worker sharing among companies to offset both the layoffs and labor shortages caused by disruptions in the market.
“Before working in Hema, I was at home for almost 20 days from January 25 doing nothing,” Yang told Hangzhou Daily. “Temping helps cover my living costs and has greatly relieved my anxiety.” With the help of the experienced staff at the store, Yang has become increasingly at home in his new job.
At the Hema outlets in Hangzhou, employees like Yang are growing. In another local Hema store, 16 temporary workers have helped increase the number of completed orders by 500 per day.
China’s e-commerce platforms are seeing booming sales as more people choose to stay at home and shop online due to the epidemic. Workers’ delayed return from virus-affected regions and growing orders were leading to labor shortage in the outlets. Contrastly, since some offline businesses had to stop operation, they let go of many employees.
To address this mismatch in the labor force, Hema has taken the initiative to offer part-time jobs to laidoff employees from other companies since February 3. As of February 14, around 2,700 employees from over 40 companies in industries such as catering and car rental across the country had joined Hema’s temporary job-sharing plan after some quick training, Hu Qiugen, General Manager of Operation at Hema Fresh, told
Beijing Review.
According to Pan Helin, a senior researcher at the public policy think tank Pangoal Institution, sharing employees has addressed the urgent issues of laidoff workers, temporarily out-of-business companies and understaffed e-commerce platforms by mobilizing social human resources and helping restore social production.
“Although the epidemic has made traditional enterprises suffer, it has created opportunities for them to explore cooperation with new economy firms to share labor force costs and better cope with uncertainties,” Pan told Beijing Review.
Filling gaps
During epidemic control, China’s e-commerce retail platforms have seen surging sales of foodstuff. According to Hema, the number of its daily active users grew by 127.5 percent during the Spring Festival holiday this year starting from January 24, with online orders increasing by 220 percent. Data from e-commerce giant Jd.com also showed its fresh product sales from January 24 to February 9 had gone up by 215 percent year on year to 15,000 tons.
Hu said Hema has more than 200 stores nationwide, each staffed with about 100 people. Since the epidemic, its 18 stores in Wuhan, the hardest-hit city in Hubei Province, central China, have been delivering food and daily necessities to local residents. “Though many employees worked through the Spring Festival holiday, the orders have increased by 50 percent in recent days, still making the stores short-handed,” he said.
So by hiring people out of jobs, Hema has found a way for win- win growth. According to Hu, the company has been so adaptive to the model because it hires shortterm employees during peak sale seasons as a routine practice. The employees borrowed from temporarily closed catering enterprises have learned on the job quickly as they are old hands in the industry. An increasing number of retail enterprises have also introduced job-sharing plans during the epidemic control, such as the retail branches of Jd.com and Walmart. JD Logistics has borrowed 700 employees from more than 10 partner companies.
While job-sharing has helped fill the labor gap for online retailers, jobs requiring experience still lack people. In a statement on February 12, Hema said surging orders have made the demand for couriers especially urgent even though 80 percent of its delivery force had returned to work after the holiday.
“Employees borrowed from companies that have closed mainly work as goods sorters in warehouses and packagers in stores. Delivery jobs, however, require familiarity with the neighborhood,” Hu said.
The participation of employees from car rental companies has partially addressed the problem. Car rental and car-hailing companies such as Shanghai-based Dazhong Chuxing, the online branch of Shanghai Dazhong Taxi Co., have sent experienced drivers to assist Hema’s delivery services in several cities. This has improved the delivery efficiency since cars can carry more than the motorcycles commonly used by deliverymen.
Job sharing has also expanded to the manufacturing sector. IT firm Lenovo introduced temporary jobs to assemble computers and mobile phones in some cities on February 8. According to the company, over 500 people have applied for the jobs.
Trying to survival
Many offline businesses that have felt great pressure during this period have gained a new lease on life by teaming up with online retailers. With most of its 400 restaurants across China shut down, Xibei, a top restaurant chain, is collaborating with Hema and Missfresh, a fresh food delivery app, to find jobs for its idle staff.
Yunhaiyao, another restaurant chain, is also working with Hema to survive the hard time. More than 400 of its employees have joined Hema stores in cities like Beijing, Shanghai and Hangzhou.
Entertainment outlets have also remained closed with no revenue but still have to pay overhead including rent, salaries and taxes, creating great pressure, said Yang Ying, Deputy General Manager of Windsor KTV. To save costs, Windsor KTV has sent 12 percent of its staff to work at Hema.
Catering companies are now developing
takeaway services for self-reliant recovery. With the support of banks, Xibei is expanding to delivery services. On February 6, Jia Guolong, founder of Xibei, informed the staff that 200 of Xibei’s outlets had started to provide takeout services to turn the corner.
According to Chen Na, a brand value director at Yunhaiyao, its branches have established 100 service centers in nearby communities to provide foodstuff and food that can be easily cooked to expand its business. “Yunhaiyao will improve its delivery services by improving food safety after the logistics chain is restored,” she told Economic Daily.
Boosting a Trend
Hema estimates that once more companies resume work, it is likely to face a staff shortage once again. According to a statement, 30,000 new jobs including procurement, marketing and delivery will be available this year as its outlets continue to grow.
To facilitate flexible recruitment, Alibaba has introduced a temporary online employment platform where catering companies can apply for their idle staff to become deliverymen or get other work in Alibaba’s retail stores. The Internet giant said 10,000 temporary delivery jobs will be created.
Jd-backed delivery platform Dada Group will also offer 15,000 positions, of which two thirds are for couriers countrywide and the rest for retail partners of JD Daojia, an ondemand retail platform under the group, in over 30 cities.
The labor gap during this special period has made flexible employment a rising star. According to a white paper on flexible employment in China released by the Renrui HR Group in 2019, the employment model developed rapidly last year. Among the over 5,000 domestic enterprises investigated, 44.6 percent employed flexible workers and nearly 70 percent were planning to adopt the model. Salespeople are the most common position in flexible employment.
For many industries, costs during slack seasons and labor shortages in peak seasons remain problematic, which can make flexible employment a promising future trend, Yang told Guangming Daily.
“Flexible employment will bring a major change in China’s human resources supply. Through digital economic platforms, domestic enterprises can develop partnerships more efficiently and promote mutually beneficial flows of the labor force,” Pan said, suggesting that third-party service platforms providing enterprise and employee information can be developed to simplify recruitment.
“The promotion of job sharing also calls for regulations that clarify the obligations and rights of employers and employees to protect both sides’ interests and reduce legal risks,” he added.