Recruiting in China

HONG KONG, June 4 (Reuters) - U.S.-based Kelly Services Inc. , the world's fifth-biggest recruitment firm, said on Monday it was expanding into China by acquiring a staffing company with offices in seven cities in mainland China.
Kelly Services, which is based in Troy, Michigan, said it had agreed to acquire P-Serv, a privately owned company which is based in Singapore but has offices in Hong Kong and seven cities in mainland China, including Beijing, Shanghai and Guangzhou, as well as second-tier cities Chengdu and Suzhou.

It would not disclose how much it had paid for the Singapore company but said the acquisition would enable it to do executive search, middle-management placement and temporary and contract staffing in China.

"We've got a number of multinational clients worldwide who are finding it difficult to find talent in China and want to use a recruitment company that has integrity," Dhiren Shantilal, Kelly Services' senior vice president for the Asia-Pacific, said by telephone.

A shortage of managerial talent in China has created a tight labour market and foreign companies face difficulty keeping staff amid rampant poaching.

Kelly's clients include Intel Corp. , the world's top chip maker, which has operations in second-tier cities Chengdu and Dalian. Shantilal said Kelly hoped to expand into three more second-tier cities in the next six to eight months.

He estimated that revenues earned by recruitment companies in China amounted to about US$2 billion in 2006 and would probably reach US$3 billion in 2008.

Foreign recruitment firms have been eying expansion in China since Beijing last year partially relaxed restrictions on investment in the sector.

In February this year Chicago-based Hudson Highland Group Inc , the world's sixth-biggest recruitment company, acquired a Chinese IT recruitment firm to better serve its multinational clients.