Recruiting in China

The refined techniques of recruitment firms are in demand

An increasing number of Chinese companies are turning to international headhunters for high-quality overseas professionals, as they do not have the extended professional connections needed to find such talent.

Zhang Ruguo, the HR manager of the Beijing-based New Oriental Education Group, says that most of the recruitment is directly done by the company, save for some high-level management positions.

"Since we do not have the right connections, we have to ask for help from overseas headhunters.

"They (overseas headhunters) have a rich database and human capital resources. By going through them, we can save a lot of time and energy, and also be sure that the talent we procure is suited for our requirements," Zhang says.

International headhunting companies had very few Chinese clients when they first entered the Chinese market some 15 years ago, but in the past few years there has been a sea change, says James Darlington, head of Asia at Antal International, a global HR consultancy.

"When we first entered the Chinese market in 1998, 90 percent of our clients were multinational companies. But today more than half of our clients are local companies," he says.

Robert Parkinson, founder and CEO of RMG Selection, a Beijing-based recruitment consultancy, says that five years ago his company had hardly any Chinese companies as clients. But now they account for more than 20 percent of the clientele. The company plans to set up a new office in Tianjin this year to handle the workload from Chinese companies, he says.

Parkinson says the main reason why Chinese companies are looking for overseas talent is the fact that the economy is gradually changing. About 15 years ago, China was the manufacturing center of the world with the lowest prices, but now it has changed to a place where more value is added to products.

Moreover, with China emerging as one of the most dominant and resilient players in the global economy after recent financial troubles, and more Chinese companies striving to compete with multinational firms, the need for overseas talent has skyrocketed.

"If you look at what work the law firms do, you will find a lot of their work is not inbound, but outbound investment, to help Chinese companies expand overseas. That's a huge driver," Parkinson says.

There are large demands in two areas: one for the government-backed talent programs, which typically look for top-notch and academically qualified candidates in technology-based areas, says John Benson, CEO of Silu.com, a Chinese career site that focuses on connecting overseas professionals with Chinese companies.

The second is a more across-the-board demand for skillsets that the China talent pool cannot provide, such as professionals with experience in operating in Western cultures, especially from Chinese companies looking to expand abroad, he says.

When searching for high-level talent for Chinese companies, headhunters go through the same process as when they work for other international companies. But the situation varies from case to case, says Ed Zheng, senior client partner of Korn/Ferry International, a global executive search firm. More than 40 percent of its clients in China are local companies, with state-owned enterprises accounting for 50 percent of the total.

"The first thing that we do is to communicate with our client, so that we can understand not only what's on the job description, but also the company's business strategy, its growth target, structure and culture," Zheng says. "Our first job is to help the Chinese companies figure out their specific requirements for talent."

Following this, the company will start to look for candidates overseas. Zheng says that for high-level positions, candidates' personalities and leadership competence probably play an equal, if not bigger, part in their career successes compared with specialized skills.

"We often spend a lot of time in assessing the potential candidate's personalities. Usually in our recommendations about them to companies, only 40 percent are about the candidates' professional skills, while 60 percent is about their personalities and leadership competence," he says.

Approaching candidates is not an easy task, and it is important for headhunters to be aware of the true value of joining a Chinese company from the candidate perspective before doing so, Parkinson of RMG says.

"About 99 percent of candidates that we approach at first will be passive candidates who are not looking for changes or new experiences," Parkinson says.

"Therefore you cannot have people with one year's working experience calling someone with 25 years' experience to have a conversation on career development, as they cannot engage at the same level. Engaging with them is knowing them in a deep way."

When the candidates show interest, headhunters often arrange interviews, to see if there is something they would like to change about the current positions, and the contract-related aspects. After the candidates join the company, headhunters will help them with integrating in the first few months. In most of cases, the recruitment fees can be high and more than one third of the candidates' yearly salary, Parkinson says.

However, even after careful matching, retention of acquired talent is a challenge for many Chinese companies. More than half of the high-level talent leave their positions in Chinese companies after one year, largely due to cultural differences, Zheng says.

"Most of the Chinese companies consider talent as an acquired skill and not as acquiring a talent," he says. "Take a legal director in a Western company as an example. From a Western perspective what makes him tick, besides professional skills, are factors such as pets and hobbies. But in most Chinese companies, the only thing that matters is that he is an expert in legal issues."

Zheng says the good thing about the process is that the appropriate person can be found, and skills can readily applied.
"However, ignorance about a talent's cultural values, personalities and career aspirations will lose their loyalty. When a talent has been abstracted to a skill, and a higher-paid job has been offered, they will leave right away," he says.
Moreover, enterprise culture in Western companies and Chinese companies are quite different. In Western companies, employees' rights and obligations are set down in a contract and the boss is more likely to be open about it, whereas in Chinese companies, personal networks and relationships are more important, and the boss is more likely to give orders than to listen.

He adds that while retaining talent, money is usually not the prime motivator. Instead, it is more about people who have a real interest in the culture and history of China, and those who are ambitious and capable of seizing the available opportunities.

Claire Yang, managing director of the consultancy Accenture Greater China, and an expert on talent and organization performance, says overseas talent should accept that things operate in different ways in different cultures and be more positive in communicating with Chinese bosses and make changes.

Even though the number of companies using headhunters is increasing, it is still small compared with the whole market, Parkinson says.

"Chinese companies are less familiar with headhunting services. In Chinese culture, people pay more attention to their own network and relationships; they come to us only when people simply cannot be found by other channels," he says.

It will take another five or 10 years for Chinese people to start using headhunting companies for outsourcing professionals, he says.

Contact the writers at chenyingqun@chinadaily.com.cn and huhaiyan@chinadaily.com.cn

Rapid expansion has left the industry short of qualified professionals, Huang Ying reports.

The rapid expansion of movie theaters in China has boosted box office revenues as well as spurred a huge demand for theater management specialists.

The boom began in 2010, when box office receipts exceeded 10 billion yuan ($1.61 billion) for the first time. The number of theaters surged from 2,000 in 2010 to 2,800 in 2011, up 40 percent year-on-year, according to statistics from EntGroup Consulting, a Beijing-based entertainment industry consultancy. The rapid increase in the number of theaters resulted in a shortage of qualified managers.

"During rapid economic development, the availability of human resources tends to lag behind industry growth," said Han Jian, associate professor of human resource management at China Europe International Business School.

A qualified manager must understand all aspects of running a theater, including operations, marketing, finance and screening, which is why it takes a considerable amount of time and effort to develop such skills, Han said.

Liu Cuiping, research manager at the Beijing-based entertainment consultancy EntGroup Consulting, said, "Nowadays, most movie theater managers are sourced from other sectors, such as hotel management, business administration and finance."

For example, Xu Qiong, general manager of Bingo Cinema in Hangzhou, Zhejiang province, said that she entered the industry after leaving her managerial position at Procter & Gamble Co.

The shortage of qualified candidates has left theaters fighting for recruits.

Li Hui, assistant general manager of Omnijoi International Cinema in Xi'an, Shaanxi province, said: "I receive many calls inviting me to join other theaters. It's not unusual in our line of work."

Li began working in theaters in 2005 and has held different positions, such as waitress, ticket clerk and snack saleswoman.

Wang Guangmin, director of human resources and administration at Beijing Megabox Zhongguan Cineplex Co, which owns and operates two theaters in the city, said, "Qualified theater management candidates have a wide range of options when seeking job offers."

The competition for managers has led to a high turnover rate.

Some candidates seek higher positions and higher pay, but once they are hired, sometimes their skills are insufficient for their added responsibilities, said Li Yunling, training director of operations at a theater owned by Hainan Airlines Co Ltd.

"Those people just use their previous work experience as a bargaining chip for higher positions and better pay," Li added.

Liu from EntGroup said the turnover rate in the theater business is high because of strong market demand yet low wages, especially in second- and third-tier cities.

Some managers leave for other theaters, while some leave the industry entirely, Liu said.

Yin Gang, president of Cine Asia (Shanghai) Ltd, a theater solutions and services consultancy, said, "Competition for competent theater managers results in higher operation costs, which is undoubtedly detrimental."

In the movie industry, theaters have more clout than film production and distribution companies, said Cai Ling, a cultural industry researcher with CIC Industry Research Center, a Shenzhen-based consultancy. The high managerial turnover rate in the sector will have a negative influence on the industry's development, he added.

In order to retain the managers they already have and to keep qualified candidates waiting in the wings, theaters have come up with different strategies.

Some train their employees as potential theater managers in advance, so as to fill vacancies in newly opened outlets or to respond immediately to unexpected turnovers, Liu said.

"We try not to recruit managers from outside our company. We prefer to maximize the potential of our own employees through proper training," Wang from Beijing Megabox said.

Lu Yi, business manager of Shanghai-based Century Universal Film Network Development Co Ltd, which operates 20 theaters across Shanghai, Beijing and Jiangsu province, said: "Although our company is not big, our turnover rate is small. Most of our theater managers have witnessed the development of the company and have become emotionally attached to it."

Yin from Cine Asia said, "The fundamental solution to the shortage is education, but currently, only a few Chinese universities and colleges offer theater management as a field of study."

Beijing Film Academy began offering courses in theater management in 2010 in response to the widening gap between supply and demand.

"As far as I know, it is the only example of theater management studies at the university level in China," Liu from Entgroup said.

The number of movie theaters increased to 3,680 by the end of 2012 from a year earlier, up 31.4 percent year-on-year, according to statistics from EntGroup.

National box office revenues reached 17.07 billion yuan last year, registering a year-on-year growth of 30.18 percent. Ticket sales from 25 theater chains exceeded 100 million yuan, of which six generated sales worth more than 1 billion yuan each, according to the State Administration of Radio, Film and Television.

As a human resources manager, when is the last time you talked to the leader of your company's sales department?

Chong Ng, Greater China managing director of talent recruitment solutions provider FutureStep, is often disappointed with the answer he receives.

One of the techniques his company uses is to set up a one-day workshop and make sure all the client company's business leaders - all its China-based CEOs, board of directors and senior HR leaders - are in the workshop.

Ng then asks them about their business strategy for the year, and the talents they need to implement it. His team will make sure they work together to come up with strategy for the year ahead.

"You'll be surprised how often this does not happen (in their own boardroom)," Ng said.

"Most often, a sales manager picks up the phone, calls the HR manager and says, 'I want to fill the position immediately, or we want to find a sales manager immediately'."

FutureStep calls this a "reactive" recruitment approach, one that leads to employers failing in the increasingly competitive talent market.

"China's talent market, especially in the high end, is becoming more and more competitive," Ng said. "Employees now have a lot of options. They can work for big US multinationals, big European multinationals or big Chinese companies. How can your company stand out in the market?"

According to Ng, to be strategic, employers have to have a very good workforce plan. Every business plan - from opening a research and development center to increasing sales by 20 percent - should be followed by a workforce plan. As business plans change, the workforce plan should also be flexible and change accordingly.

Ng compared this process to marketing strategies used by consumer goods companies. You have to know your target candidates' genuine needs and try to fit your company's features to their appetites.

Generally, potential employees want to know the company's culture, salaries and development prospects. The HR department should give them this information, in addition to other information that may suit them, such as certain traits about the company that match prospective employee's interests and likes.

Be attractive

These days, large Chinese companies, especially State-owned enterprises, are increasingly popular among China's young job seekers. In its annual list of the 50 best employers in China, recruitment website Chinahr.com listed 18 foreign companies. Chinese companies, most of which were SOEs, took up the rest of the list.

So what can foreign companies do in China to improve their popularity?

Ng said foreign companies should clearly demonstrate their commitment to China. This commitment can be shown by opening research and development or product development centers in China.

"It shows that they are not coming to China just to sell their products. They are also developing their products for China and for the world," Ng said. "When candidates see this, they will feel reassured."

Ng said it is also important for foreign companies to create a stable leadership. In the past, some multinationals' China branches saw a leadership reshuffle every six to 12 months. The frequent changes give employees a sense of instability.

In addition, foreign employers have to make sure growth and development opportunities are available to their local employees, he said. This commitment can be shown by making leadership as diverse as possible to break the perception of "glass ceilings".

Most-wanted talents

Upon being asked about the most-wanted professionals in 2013, Ng said he would rather talk about function than specific industries.

"In fact, except for a few technical people, talent requirements are more or less the same across various sectors," he said.

"For example, all companies need salesmen. Actually, the need for sales managers is rising strongly in 2013."

As markets in first-tier cities are becoming mature and saturated, multinationals have a robust demand for salespeople with a full knowledge of markets in second- and third-tier cities.

In this regard, multinationals have to put in much more effort to fostering their employers' brands in these cities and identifying the talent pools there, because local companies have an advantage in finding local talents, Ng said.

And as the Chinese market is departing from its previous linear growth pattern, corporations operating in China need a new type of leadership, which Ng described as "a shift from operation-oriented toward growth-oriented".

"The good old days are gone. Now not only do you need to run a business, you need also to fight a business," Ng said. "This means leaders should run a factory, but also find business to keep the factory running."

However, Ng said one of the most common mistakes foreign companies make is they expect the local talents they hire to be productive in a very short time, but it does not work that way.

"A lot of multinationals have a mixed organization. You get one boss in Singapore and the other in New York. So you have to be able to work on a global basis. Decision-making there is very different from local companies, so it takes time for new hires to adjust to that environment," Ng said.

Foreign companies should also provide local talents with the resources to be productive, he added. "You can't just send a manager to the office in Beijing and say 'good luck', with no backing resources, no coaching and training."

Throughout the interview, Ng stressed that the qualified talent pool in China is "not very big". To get them, foreign companies should prepare for a fight.

"In 2013, the war for talent, once ferocious, will become more subtle and focused. Businesses will not hire the volume of talent they once did, but against the current economic backdrop and the drive for growth, they will be focused on hiring critical talent," Ng said.

The living environment has become a growing concern for expatriates working in Shanghai and Beijing, although the two cities topped a list of the most attractive Chinese cities for expats, a new study found.

The survey — 2012 Amazing China, conducted between September and December by International Talent, a magazine under the State Administration of Foreign Experts Affairs — gauged views of 175,400 expats working in China about their favorite Chinese cities.

Among those expats, 1,050 were surveyed about their opinions on the policy, administration, and working and living environments of their cities.

Shanghai and Beijing were topped the list, followed by Shenzhen, Suzhou, Kunming, Hangzhou, Nanjing, Tianjin, Xiamen and Qingdao.

In Shanghai and Beijing, their living-environment scores were lower than those of other cities, said Zhang Xiao, who was in charge of the survey.

Cities such as Suzhou, Kunming and Hangzhou received comparatively high scores in living environment, and that helped boost their rankings, she said.

Despite topping the chart for three years, Beijing and Shanghai underperformed this time in living environment as foreigners living in these two cities have complained about the worsening air pollution, according to the survey.

The smog-shrouded sky over Beijing is discouraging expats from staying longer and scaring away others who would otherwise love to visit, work, and live in the city, the study showed.

"Recruitment has become difficult as the number of foreigners who are applying for teaching positions in Beijing has decreased by at least half compared with the same time last year," said Yang Sha, general manager with Angelina International Placement Service in Beijing, which specializes in hiring foreigners to teach languages in schools in China.

"Air quality is absolutely the main reason," he said.

All four foreign staff members in Yang's company left Beijing this year because of the smog.

One left for the southern city of Xiamen, Fujian province, and the others went back to their home countries, Yang said.

Nestle SA, the world's largest food company by revenue, said on Monday that it will boost its investments in China’s health food sector.

"Nestle will bring more products which target Chinese kids, the senior, pregnant women and (products) for critical care," said Luis Cantarell, president and CEO of Nestle Health Science SA.

The Chinese health food market was worth 105 billion yuan ($16.87 billion) in 2011, with an annual increase of 11.4 percent since 2006, said the State Food and Drug Administration.

According to the Beijing-based S&P Consulting, China's per capita spending on health food is $31 per year, which accounted for 0.07 percent of consumers’ total annual consumption. By contrast, the figure in the United States and in the European Union is about 2 percent.

Chicago-based labor and employment law firm Seyfarth Shaw announced on Wednesday their launch of a new office in Shanghai, China. The law firm intends the Shanghai office to function as a work hub covering the entire of Asia. The office in Shanghai will be managed and led by Wan Li from DLA Piper, who is one of the most high-profile China practitioners. The Shanghai office is Seyfarth Shaw’s second office outside the USA. The other one is in London.

J. Stephen Poor, the chairman and managing partner of Seyfarth said, “Opening our Shanghai office is part of aligning our international services with the needs of our clients … In speaking with our clients during the last 12 months, there has been overwhelming feedback for us to open an office in Shanghai to support our clients in some of our core practice areas. We are delighted to open the Shanghai office to help us better serve our clients in China.”

Darren Gardner, the chair of Seyfarth’s International Practice said, “It is an exciting development for us to open our office in Shanghai. This is an important next step in the evolution of our international service model, following the very successful opening of our London office in 2011.”

Speaking on the recruitment of Wan Li, Gardner said, “We are very pleased to welcome Wan Li to the firm. He is an experienced and highly-respected member of the Chinese legal community who we have known and worked closely with for mutual clients over a long period of time. We are very much looking forward to building out our team around him, especially in the employment and corporate practice areas.”

The new office of Seyfarth Shaw will be in Shanghai’s “Jing An” business district and located in the Jing An Kerry Centre Tower II.