Recruiting in China

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.

Randstad plans to recruit 100 secretarial staff to fill temporary assignments for clients by the end of this year.

"We believe this is the right move for us because we see the same trend happening in China as happened in other markets: Both workers and companies are calling for more flexibility instead of just job security," Kerkhof said.

Randstad set up its first Chinese office in Shanghai in 2005 and linked with Talent Shanghai Co Ltd in 2006 in which it held a 70-percent stake.

Now it owns seven branches in Shanghai, Beijing and Suzhou with 230 staff members, dealing in flexible staffing, pay rolling and search and selection business.

Executive searcher DHR International, one of the 10 leading executive search companies in the world, has big ambitions for its role in the fast-growing Chinese market.

The company runs an office in Shanghai and will open a Beijing office this year. It expects that revenue will triple in China this year.

"We can serve the Chinese market from the Shanghai and Beijing offices," said Christine Greybe, managing director of DHR International Asia.

The company's concentrates on headhunting senior executives for leading global companies involved in financial services and advanced technology, health care and retailing.

"A lot of our demand is coming from international companies, which account for 85 percent of our clients, but we are also starting to serve Chinese companies that are expanding internationally," said Eric Dieny, executive vice president of DHR International Asia.
Dieny, who has been living in China since 1982, is in charge of the Shanghai office.

"The Chinese companies we serve now are young but very aggressive and many of them are clustered in high-tech industry," Dieny said.

He said their Chinese clients have funding, especially from venture capital firms, and they try to attract senior executives to help them grow into a giant company.

"Senior executives in China move very quickly but those who change jobs frequently are not great value for us," Dieny said.