"Flexible employment" refers to the use of non-traditional hiring methods by enterprisesHuman resource allocationA method. Traditional employment models are usually long-term fixed-hire forms, while flexible employment models place more emphasis on temporariness and flexibility, which can effectively help enterprises control labor costs and improve employment efficiency.

The earliest forms of flexible employment included labor dispatching, which later evolved into various forms such as business outsourcing and part-time work. Today, a new model based on platforms has further developed. This new model relies on digital technology, efficiently connecting both supply and demand through flexible employment platforms, optimizing the entire employment process, and achieving efficient matching between 'people' and 'positions' as well as elastic management of human resources.

Flexible employment can not only legalize and make labor more flexible while meeting business objectives, reducing labor disputes, increasing diversity in the labor market, but also lower labor costs and promote a harmonious internal working environment within enterprises.

Between 2017 and 2022, the proportion of people aged 65 and above in China increased from 11.4% to 14.9%, and it is expected to further rise to 16.9% by 2027. The acceleration of the aging process has led to a reduction in the working-age population aged 15-64 from 1 billion to 870 million, slowing down the population growth rate and further exacerbating the instability of the overall labor market. Since 2020, several provinces and cities on the Chinese mainland have issued announcements to adjust the collection entities of social insurance. Including Beijing, Shanghai, Shenzhen, Tianjin, and 15 other provinces and cities, starting from November 2020, they have transferred the collection entity of enterprise social insurance premiums from social security departments to tax departments (i.e., 'social security into taxation'). This measure may increase the tax burden on full-time employees of enterprises.

China's shared economy market has shown a vigorous development trend, with the overall shared economy market size reaching 3,832 billion yuan by 2022. Driven by digitization and the internet, various new economic forms have emerged, which has also promoted the demand in the overall flexible employment market.

The concept shift in career development among the emerging Z-generation workforce has injected new vitality into the overall flexible employment market. Compared to job seekers from the 90s/80s era, the young Z-generation workforce has distinct personalized characteristics, placing more comprehensive demands on businesses and job search channels, thereby driving the development of the entire industry.

According to Frost & Sullivan's calculations, the overall flexible employment market size was about 2613.1 billion yuan in 2017, which grew to 7326.3 billion yuan in 2022, with an annual compound growth rate of 22.9%. It is expected to approach 20 trillion yuan by 2027, with a compound growth rate of about 20% from 2022 to 2027.

Compared to other developed countries/regions around the world, the penetration rate of flexible employment in China is still relatively low, indicating that the flexible employment market in China has great growth potential. From the perspective of enterprises, more than 80% of Chinese enterprises have a flexible employment penetration rate of less than 10%, while only 9% of enterprises have a penetration rate exceeding 30%. This shows that in the future, there is sufficient development potential and space for the flexible employment market in China, which can be further expanded.

In 1984, Professor Atkinson of the University of Sussex in the UK proposed the 'flexible enterprise model' theory, emphasizing that enterprises should adopt flexible and diverse methods for human resource allocation to adapt to internal and external environmental pressures. At the beginning of the 20th century, the United States took the lead in introducing a labor model characterized by flexible employment, namely 'temp labor,' aimed at addressing the severe unemployment problem and heavy social security burden at that time. With the development of socio-economy and globalization, this labor model has been introduced into countries and regions such as Europe and Japan. Although the penetration rate of flexible employment in China has increased, it has not yet reached one-fourth of that in Japan. Given China's vast population scale and industrial demand, it is expected that China will see rapid development in the flexible employment industry in the future.

In 2020, the sudden outbreak of the COVID-19 pandemic brought a huge impact on global politics and economy. Against this backdrop, China became the only major economy in the world to achieve positive growth. Flexible employment has become a new type of labor model, playing a positive role in social governance and resource allocation during special periods, stabilizing employment and promoting development.

In the overall flexible employment application, the characteristics of the manufacturing industry are particularly evident. Firstly, job demand is mainly concentrated in front-line ordinary positions with relatively single skill requirements. Secondly, affected by product characteristics or the buyer's market, there are often differences in employment numbers between peak and off-peak seasons.

Among all traditional service industries that employ flexible workers, the construction industry is the sector with the highest concentration of flexible employment companies, accounting for 76.6%; followed by transportation/logistics/storage/postal services, with 46.4% of enterprises using flexible workers. Overall, the prevalence of flexible employment in traditional service industries needs to be considered in conjunction with the specific industries and main businesses of the enterprises. For example, the flexible employment situation in the hotel and catering industries is similar, mainly concentrated in positions such as waiters and cleaners. These positions exhibit clear peaks and valleys, require simple skills, have low collaboration, and high job substitutability.

1) The development of food delivery has led consumers to form online consumption habits

The in-depth application of internet technology has had a profound impact on the catering and takeaway market, driving its rapid development. The outbreak of the pandemic in 2020 further boosted the growth of the takeaway market. By the end of 2022, the scale of the catering and takeaway market had reached approximately 1.1905 trillion yuan, an increase of 303% compared to the 317.5 billion yuan in 2017, with an annual compound growth rate of up to 30.3%. The online user base exceeded 540 million person-times.

Catering enterprises have not only strengthened their connection with consumers through online sales channels, but also made it more convenient for merchants to collect consumer data. This allows them to fully explore consumers' dietary needs, thereby enhancing the competitiveness of the enterprise and increasing the frequency of use of delivery platforms.

Flexible employment platforms play a key role in matching platform demands with labor resources. As a distribution service industry centered on efficiency and time, accurately matching riders, consumers, and stores is at the core of their flexible employment model. The main workforce for distribution services is riders, which are characterized by large scale and dispersion. While ensuring immediate and rapid response, digital technology enables the platform to learn, analyze, and predict employment peaks and troughs in different regions, achieving regional real-time employment mobilization during peak periods and ultimately maximizing delivery efficiency.

2) The shared mobility industry is gradually moving towards standardization

Shared mobility is an emerging mode of transportation where consumers do not own vehicles but share them with others through carpooling or ride-sharing services, paying for their use based on personal travel needs. This model has gained prominence in the internet era. In 2012, 'Didi Chuxing', based on mobile internet and positioning technology, came into being, kicking off a revolution in the consumer travel market. Since 2012, many startups focusing on new forms of mobile travel have been established and supported by capital. Shared mobility has become an important part of the sharing economy, profoundly changing people's travel patterns and fully meeting user needs.

The market scale of shared mobility has shown an increasing trend year by year, growing from 654.4 billion yuan in 2017 to 805.6 billion yuan in 2021, with an average annual compound growth rate of 5.3%. Due to the shutdowns and business closures caused by the COVID-19 pandemic in 2020, the market scale growth slowed down. In 2022, the mutated strains of the COVID-19 pandemic broke out nationwide again, dealing a heavy blow to the travel industry and causing the market scale to decline.

Looking ahead, with the gradual recovery of travel demand in the post-pandemic era and the commercialization of technologies such as autonomous driving, the capacity of shared mobility services will further improve, filling the gaps in public transportation capacity in some regions and scenarios. It is estimated that the market size of shared mobility services will grow from 80.56 billion yuan in 2021 to 110 billion yuan in 2027, with an average annual compound growth rate of 6.4%.

1) Small and medium-sized enterprises (SMEs) are important participants in the Chinese economy

The market entities in our country are mainly composed of small and micro enterprises and self-employed individuals. In 2022, the total number of various market entities nationwide reached 170 million, of which 97.4% were small and micro enterprises, and over 99% were small and medium-sized enterprises. The number of industrial small and medium-sized enterprises above designated size reached 400,000, with operating revenues reaching 75 trillion yuan and total profits reaching 4.7 trillion yuan.

In terms of employment, small and medium-sized enterprises (SMEs) provide 80% of the jobs in China. The total number of private individual jobs has increased by more than 200 million since 2012, reaching 400 million. Although SMEs have performed strongly in terms of the economic foundation and stable development, their digitalization level is generally low. Flexible employment platform companies have focused on SMEs, seizing market share through various down-to-earth approaches and considering them as the key to future business growth.

2) The common demand is for reduced cases and improved efficiency

Compared to large enterprises, the impact of the COVID-19 pandemic on small and medium-sized enterprises (SMEs), especially micro-enterprises, has been more significant. Over 70% of enterprises have been affected by the pandemic, with sales revenue generally declining to varying degrees, with about half of them experiencing a decrease of more than 20%. To cope with the pressure brought about by the pandemic, enterprises have taken a series of measures, including salary cuts, layoffs, scaling back production, and suspending operations. Among the problems faced in the production and operation process of enterprises, 'cost increases' are the primary consideration, accounting for more than 80%. The flexible employment model, as part of cost reduction and efficiency improvement, has become a powerful assistant for enterprises to achieve 'efficiency' transformation and upgrading.

3) Application of digital technology

With the in-depth development of flexible employment models, especially driven by professional and technical job fields, the entire recruitment process is gradually showing a trend of encompassing all stages: pre-recruitment, recruitment, and post-recruitment.

Employing enterprises conduct a detailed analysis of historical recruitment and employment information using AI algorithms and big data technology before recruitment, achieving timely allocation of supply and demand and precise matching of people with positions, thereby reasonably planning recruitment plans. During the recruitment process, technical means such as AI interviews significantly improve recruitment efficiency and shorten the entire recruitment cycle. After recruitment, assessment tools not only provide data support for supply-demand analysis and person-position matching but also serve as a basis for evaluating individual capabilities for technical flexible employment positions, offering a strong reference for subsequent talent cultivation and retention.

The application of digital technology in the recruitment process, including pre-, mid-, and post-screening stages for flexible employment, has effectively improved the efficiency of the entire recruitment process, ensured the accuracy of recruitment, and provided strong support for the efficient operation of the entire recruitment workflow.

4) Promotion of favorable policies

In recent years, the State Council and the Ministry of Industry and Information Technology have successively promulgated a series of policies to promote the vigorous development of flexible employment industries. For instance, in July 2015, the State Council issued the "Guiding Opinions of the State Council on Actively Promoting the 'Internet+' Initiative," clearly proposing that by 2018, internet infrastructure should be further enhanced, network facilities and industrial foundations should be solidified, the development of new-generation mobile communication networks and next-generation internet should be accelerated, and new infrastructure such as the Internet of Things and cloud computing should be improved. In August 2018, the Ministry of Industry and Information Technology issued the "Three-Year Action Plan for Expanding and Upgrading Information Consumption (2018-2020)," through the "Enterprise Cloud Adoption" initiative, conducting publicity and training for enterprises in various industries, promoting in-depth cooperation between cloud computing service providers and industry enterprises, using cloud-based software applications and data services to improve enterprise management efficiency, while also organizing the selection of typical benchmark application cases. Another example is the "14th Five-Year Plan" for promoting the development of small and medium-sized enterprises (SMEs) issued by the Ministry of Industry and Information Technology in July 2022, planning to organize more than 100 industrial internet platforms and digital transformation service providers by the end of 2022 to provide digital transformation services to over 100,000 SMEs, promoting the "cloud adoption" of 100,000 SMEs' businesses. This also means that enterprise digitization is becoming a strategic direction with great potential that deserves focused attention.

1) Expansion of the application scope of flexible employment models

With the continuous development of the Internet and digital technology, office software is also undergoing constant innovation and iteration. The realization and application of work organization forms such as remote work, video conferencing, and collaborative work across multiple locations have become possible. At the same time, the characteristics of different groups have also promoted the continuous expansion of the application scope of flexible employment models. From initially focusing on blue-collar jobs in manufacturing and service industries, the market has gradually expanded to include positions requiring technical skills, abilities, and knowledge, further expanding the flexible employment market. Meanwhile, the main workforce group for flexible employment has also shifted from blue-collar workers to technical and professional talents.

2) Flexible employment will become the main mode of employment for enterprises

The slowdown in population growth, the gradual fading of demographic dividends, and the increasingly prominent aging issue have led to a continuous increase in the minimum wage standard, thereby driving up labor costs. The social security tax inclusion policy requires enterprises to pay social security premiums based on their employees' actual wages, significantly increasing their social security costs. With the full implementation of the Golden Tax Phase IV tax system, digital technology has improved the precision of tax management, preventing enterprises from evading taxes, underpaying social security, corporate income tax, value-added tax, and issuing false invoices, which has resulted in an increase in operating costs for enterprises. Against this backdrop, flexible employment has become an effective way to reduce enterprise costs.

Under the traditional employment model, enterprises independently recruit talents for various positions, forming long-term and stable employment relationships with job seekers, with individuals being employed by one company for an extended period. In contrast, under the flexible employment model, some basic positions within enterprises are recruited and managed by third parties through labor dispatch or business outsourcing. With the continuous maturation of the flexible employment model and changes in people's work preferences, this model will gradually penetrate into other non-core business positions of enterprises, becoming one of the main employment models. Enterprises undergo a transformation in resource allocation, focusing on recruiting for core businesses while outsourcing other operations to flexible employment platforms, making them the main contractors for other business recruitment.