51Job Discusses China's Tightening Job Market (JOBS)

From 51Job's (JOBS) Q1 2006 earnings conference call transcript:

Q - Jason Brueschke, Citigroup

Great. Fantastic. Let me ask you one other question about the job market. The job market in China is clearly tightening. Weekly, there are articles in the press out here about employers not being able to find enough employees. In other words, it seems that companies are now competing for employees, which is a reversal of what was happening out here in China just a couple of years ago, if now last year. My question is twofold: do you think that this trend continues, and if so, secondly what implications of this new environment do you see the demand for your higher-priced products, both online and print, as well as the implications for your pricing power in the market as employers increasingly need to turn to services such as 51job to meet their recruiting needs? Thanks.

A - Rick Yan

I remember the last time we heard from customers that they are desperate to get people, it was probably 2003. At that time, many companies were growing. There was a lot of foreign direct investment coming into China and the government was saying that the economy had kind of overheated. I think we had pretty high growth in 2003 and 2004 and we certainly hope that this tightening of the labor market would give us higher growth rate on the top line. We have not seen it yet in our numbers and in our weekly numbers, but we hope that this will be the case. It will be good for us and good for everybody.

A - Kathleen Chien

Jason, I would just add one things to that. I think there’s been a lot of press about the tightening of the job market, but I think that really is at the managerial range, if you will. I think that actually has been a phenomenon in the market for more than six quarters, probably, at least, going back as early as 2004. I don’t think that the environment has changed that much in that sector of the market. We also last year talked a little bit about the college graduates coming into the market, and is the demand for them that much stronger. I don’t think so, for that. So I think it’s still certain segments of the market in which I think we’re seeing very, very severe shortages if you will. And I think that will help in certain segments of our markets as well.

Comments

[Vasko:]

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2008 Mar 18 03:35 AM