Human resources companies have poured into China in recent years looking keenly at the robust economy and the shortage of talent in the market.
Randstad, the second largest HR solution provider in the world, launched a flexible staffing business in China recently because it saw the market could potentially create an additional 1 million new jobs annually in the next three to five years.
A professional flexible staffing business which sends staff to employers who need temporary employees has to be an official employer of the workers and has to take on all the responsibilities for the employees, including training, professional development and other benefits.
People in China tend to confuse flexible staffing with payrolling, which is the predominant business for staffing companies such as Fesco which offers staff for longer periods.
In the flexible staffing business, workers are sent to different client companies to undertake temporary work, usually for weeks or months at a time.
"China is in the early stages of flexible staffing. In Europe, an average of between 10 percent and 25 percent of the workforce are flexible workers managed by staffing companies," said Paul van de Kerkhof, Managing Director of China operation of Randstad.
The service allows employers to use temporary workers to offset dips in productivity in peak and low seasons.
While the annual revenue created by Japanese staffing companies each year is US$30 billion, in the US it reaches US$80 billion and in Europe is worth US$90 billion.
Some Chinese companies, in an effort to circumvent more stringent labor laws introduced this year, have suddenly fallen in love with flexible staffing, Randstad said.
And some international companies have found that operating flexible staffing is extremely tough in China because of regulatory barriers.
Current employment laws require companies, including staff providers, to sign a minimum two-year contract term with employees, which makes it hard for staff providers whose employees have to handle short-term assignments, usually just a few months or even weeks.
"We are working with Chinese regulators to come up with more tailored regulations that support the flexible staffing market," Kerkhof said.
