Labor Downgrading: How Does an Employment Hollow Form?

Company G's four-tier labour model

It has been reported that a large regional courier — referred to in reporting as enterprise G (企业G) — has systematically shifted its workforce from long‑tenured, formally registered staff into successive layers of more flexible, cheaper labour. Enterprise G, active in transport, warehousing and parcel delivery, reportedly completed nearly one billion consignments in 2025 and had social‑insurance headcount of roughly 400 people. But behind that scale sits a four‑tier labour structure: A (lifetime, "iron‑rice‑bowl" 编制) workers; B (direct contract) workers; C (labour‑dispatch 派遣) workers routed through a staffing company H; and D workers supplied by outsourced contractors. The reported result: the steady erosion of high‑quality, protected jobs.

From natural attrition to outsourcing

The pathway is clear. It has been reported that enterprise G adopted a "natural attrition" policy for A‑workers — filling vacancies by retirement or voluntary exit rather than hiring new formal staff — while converting temporary hires into dispatched employees via a subsidiary staffing firm H and, increasingly, shifting frontline work to third‑party outsourcers. For Western readers: labour dispatch in China legally makes the dispatch firm the formal employer, removing head employer liabilities from the contracting company; outsourcing goes further, turning labour into a purchased result rather than a relationship. These moves, reportedly carried out in response to local policy nudges and enterprise incentives to cut legal and wage risks, let the company expand capacity without increasing its official wage bill or headcount exposure.

The hollow left behind

The consequences are structural. It has been reported that the policy closes off the classic pathway to stable, pensionable jobs for new entrants, creating a generational divide: older workers still enjoy "编制" protections, while younger, often better‑educated entrants face precarious C‑ or D‑type roles with weaker pay and benefits. Dispatch and outsourcing have also been repurposed as liability shields: bidding processes compress contractor margins, which are then borne by frontline workers, and anecdotal reports describe falling morale, perfunctory labour and workarounds that can even harm efficiency. Who benefits? Short‑term corporate flexibility. Who loses? Workers and the wider labour market’s ability to regenerate quality employment.

Policy choices now matter. Regulators in China have tightened rules on abusive dispatch and late‑stage outsourcing in recent years, but it has been reported that such legal boundaries are often navigated without flagrant illegality. If the "employment hollow" is to be filled, reforms will need to rebalance firms’ incentives, strengthen enforcement of dispatch and outsourcing rules, and restore pathways to stable employment — otherwise the gap between a protected past and a precarious present will keep widening.