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Multinationals Can Build a Lean, Mean Staff on China's Grad Glut

Stocks in this article: BIDU NTT DIS GOOG

To look at this dynamic in another way, consider the opposite trend in Vietnam. Talent is hard to find in much of the country, foreign companies complain. Those in jobs are pressing for higher pay, often by calling wildcat workplace strikes that shut down production until workers and managers work something out.

In China, a widely forecast economic slowdown last year from levels between 9% and 10% over the previous decade should give foreign employers another boost. Chinese officials warned in 2012 of "increasing employment pressure" for graduates because of that slowdown, from more than 9% to around 7.5%.

To get offshore HR directors salivating even more, add to this mix the increasingly high quality of graduates. They're more versed now in specialized, practical fields rather than the theoretical teachings of the past, says Arthur Wang, East China director for the recruitment and HR outsourcing firm Robert Walters China.

In other words, you'll get a person who knows a bunch of computer programs in addition to the core Marxist-Leninist tenets (insert dry wit emoticon here).

In sum, the better the employee, the lower the pay and the happier that headcount is to have the job, the better for productivity and the bottom line.

It's hard to say exactly which employers will make the most of this trend -- meaning worth the attention of investors. But China's two top job-search Web sites, and, drop plenty of well-known company names. A lot of them were looking this week for entry-level workers.

Among the names found on these sites were Chinese search engine Baidu (BIDU), the Japanese telecom giant Nippon Telegraph and Telephone (NTT), Walt Disney (DIS) and Google (GOOG).

But what happens if the Chinese economy roars back to 9%-10% growth? My guess: rampant restlessness and fast workforce turnover for the same MNCs that can choose the cream today and pay them whatever.

The glut of grads will go on unless universities buck up their admissions bars again. But employees with a year or two of experience can quit more freely than they can now and find more rewarding work at higher pay.

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