Job applicant screening in China and its four pillars

Abstract

Chinese employers practise extensive personal screening of applicants during the recruitment process. This study identifies four motives for these practices – statistical, customer taste, employer taste and regulatory. It discusses their distinctive roles in the Chinese labour market and in regard to labour-market regulations. Using a convenience sample of large Chinese employers, the study evaluates the economic and institutional determinants of screening approaches and implications for firms’ performance. Statistical screening, based on the assumption that social group membership is an indicator of productivity or loyalty, is found to be related positively to employers’ capitalisation, labour-market power and private ownership, and negatively to skill supply in provincial markets. Customer-taste screening is prevalent in the services and sales sectors, and interestingly in wealthy first-tier cities. Employer-taste screening endures in privately owned firms, and in skill-intensive industries and first-tier cities, and appears linked to customer-taste screening. Some forms of screening breach anti-discrimination laws and persist because of lax enforcement of such laws, but requests for personal data on job applications forms may also reflect compliance with equity indicators. Regulatory compliance-based screening is related positively to firms’ market power, capitalisation and state ownership. The implications of the different screening practices for public policy and corporate strategy are examined.