Recruiting in China

Move Will Solidify Position as Asia's Market Leader in Mid- to Senior-Level Recruitment

NEW YORK, Feb. 7 /PRNewswire-FirstCall/ -- Seeking to expand its team presence and depth in mainland China markets Shanghai, Beijing and Guangzhou, Hudson (NASDAQ: HHGP) today announced that it signed a definitive agreement to acquire Tony Keith Associates Ltd. to better serve the talent needs of U.S. multi-nationals operating in Asia. The transaction is expected to close during the first quarter of the year, subject to customary closing conditions.

"This deal brings together two leading recruitment brands in the Chinese market," said Gary Lazzarotto, chief executive officer of Hudson/Asia. "The combined expertise and geographic reach of one of China's leading IT recruiters and our mid- to senior-level recruitment capabilities should be extremely attractive to U.S. multi-nationals seeking top talent to help enter the market or expand their operations in this high-growth region of the world."

"Hudson's global reach, talent network and client base will enable us to better serve our existing clients and candidates, and broaden our reach to other companies that could benefit from our specialized recruitment capabilities," said Raymond Wong, partner of Tony Keith. "What's more, and just as important, Hudson's organizational culture and values mirror ours."

Hudson, which has operated in four key Asia markets (Hong Kong, Japan, Singapore and China) for nearly a decade -- will now number more than 350 professionals and seven offices primarily serving U.S. multi-national clients throughout that continent. Recently, the global recruitment and talent management firm was recognized by China's World Management Review magazine as "Greater China's Best Headhunting Firm of the Year" for 2006.

Hudson

Hudson (NASDAQ: HHGP) is a leading provider of permanent recruitment, contract professionals and talent management services worldwide. From single placements to total outsourced solutions, Hudson helps clients achieve greater organisational performance by assessing, recruiting, developing and engaging the best and brightest people for their businesses. The company employs more than 3,600 professionals serving clients and candidates in more than 20 countries. More information is available at http://www.hudson.com/.

Special Note: Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995: Except for historical information contained herein, the statements made in this release constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such forward-looking statements involve certain risks and uncertainties, including statements regarding the company's strategic direction, prospects and future results. Certain factors, including factors outside of our control, may cause actual results to differ materially from those contained in the forward-looking statements, including our ability to complete the Tony Keith acquisition, economic and other conditions in the markets in which Tony Keith operates, risks associated with operating Tony Keith as part of Hudson Highland Group, unexpected developments relating to Tony Keith's business after closing of the acquisition and other risks discussed in our Form 10-K and our other filings made with the Securities and Exchange Commission, which discussions are incorporated in this release by reference.

By Meta L. Levin 2007.1.23 Wall Street Journal

When Bernie Fung returned to Hong Kong 14 years ago, he secured a front row seat for the fastpaced economic transformation of the People’s Republic of China.

A HongKong Native who spent 20 years working and studying in Canada and the U.S., Mr. Fung is now CEO of AON Asia, a risk management consultancy, and finds himself competing for the limited pool of financial professionals who have expertise and experience of working in and with China. "It's a challenge to find the right talent," he says.

The rapid pace of economic growth is making China one of the hottest financial recruitment markets in the world. And multinational companies seeking to enter China are looking to hire candidates with skills that allow them to work in, and advise on, this complex market.

Companies arriving in china on the tide of foreign investment need accountants, auditors and financial managers who understand the market and are familiar with the variances between cities, provinces and regions. Demand is also high for English speakers, those with overseas and management experience, as well as familiarity with working in a multinational corporate environment and with new product sales, says Thomas Zhou, partner and co-founder of DaCare Executive Search, which has offices in Beijing and Shanghai.

"Native (Chinese) understand the culture, the policies and, most important, they have network connections with local government and companies," says Sherry Liu, a Beijing native, now based in Milwaukee, who has lived in the U.S. for 22 years and operates SimChain Global Logistics LLC, and outsourcing company in China. Like most, she believes that the best picks are the "haigui," Chinese who studied abroad and know the international game rules.

That, however, is one of the biggest challenges, and recruiters like Guy Day, managing director of Ambition Asia, an accounting and finance recruiting firm in Hong Kong, struggle to find enough Mandarin-speaking candidates who hold a U.S. Certified Public Accountant, British Certified Practical Accountant or similar certification from other countries.

Chinese colleges and universities are turning out an increasing number of entry-level job candidates, but there are few middle and upper-management Chinese with the necessary experience in international commerce, making the competition fierce and salaries rise. "Investment in education didn't start until about 10 years ago, so there is a greater supply of those with little or no experience and the top jobs are going to people from Hong Kong or to non-Asians," says Mr. Day.

It can be difficult, however, for non-Asians to understand the cultural complexities of working in china. "Sometimes a manager coming in from another country will have problems, because he doesn't know how to handle the locals," says Leonard Sarkissian of Milwaukee, Wis., whose company, international Harbor LLC, helps foreign firms through the process of setting up a business in China. He emphasizes the importance of learning to read cultural cues. For instance, Chinese will not say no directly to guests. They may say," it's very difficult," explains Ms. Liu. "There are many ways to show their disagreement, but none of them is no". Foreign managers who don't understand that may find the process frustrating and counterproductive.

Recognizing this, AON Corp., AON Asia's parent company, recently initiated a program to identify Chinese national studying in the U.S., hire them and put them through a training program before sending them back to China to work at either AON's insurance or brokerage offices there.

Those who take internal audit jobs in China must be ready for a lot of travel, and that can make these positions a tough sell, says Mr. Day. "Some of the junior-Level jobs have 90% travel. You are literally living out of a suitcase." Accounting and financial analysis jobs tend to have considerably less. Since many companies have manufacturing facilities in China, it also is important that those looking for jobs understand and be familiar with this environment, Mr. Day says.

Chinese job candidates are becoming more sophisticated. Whereas salary was king for many years, whey now are evaluating employers by career trajectory, training and overseas opportunities, as well as remuneration.

"Candidates have woken up to the fact that working for the right company and having the opportunity to work their way along a clearly defined career path can be worth more than money along," says Mr. Day. While money is still strong attraction, he finds the market maturing as those with financial expertise look for careers and not just jobs, and cast a critical eye on such things as location and travel opportunities. Employees also prefer big name multinational companies, seeing in them more opportunities in the long run.

An increasing number of young Chinese job candidates are looking for companies that will finance their M.B.A. studies, says Mr. Sarkissian. In fact, it has become a part of some corporate retention programs in China. An employer will offer to pay for graduate school in return for a commitment to stay with the company for certain number of years. A lot of Chinese universities also now have partnerships and joint programs with those in the U.S. and Europe. Often a job candidate will ask if the company will pay for an M.B.A. as part of the interview. "It would be the kicker for them," says Mr. Sarkissian.

Language is a big issue. Although Mr.Fung agree English is the international language of business, he believes that finance professionals who want to be successful in China do need to at least be familiar with Putonghua, the official Mandarin dialect spoken in most of the large cities.
"As a hot growth market, more U.S. companies are trying to establish their presence (in china), which does create additional demand for managers who are fully Mandarin-English fluent in both language and culture," says Susan Amy, director of the Career Management Center at the university of North Carolina's Kenan-Flagler Business School.

These is also the issue of Chinese familiarity with Western business culture. "Part of the advice I give is to raise your hand and speak up at meetings," says Corbette Doyle, AON's U.S. –based global chief diversity officer. "That is culturally unacceptable in China." It is Ms. Doyle's job not only to promote diversity in AON's offices around the world, but also to find ways to do business without stepping on cultural toes. She cites as an example a group of Chinese AON employees who founded the "China Desk" within the company. They help AON's U.S. clients who want to go to china, as well as Chinese clients who want to invest in the U.S. "They see it as an opportunity to help the organization and help themselves without raising their hands and saying 'look at me.'" She says.

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SHANGHAI and Beijing office properties are on top of the world - and that's official.

The two cities led the way with an average eight percent return on investment ratio among the world's top 12 real estate markets last year, according to a definitive report by a respected international property adviser.

In its inaugural edition of Global Investment View, CB Richard Ellis also said investment in office buildings continued to surge, with Asia and Europe recording the most significant increases in activity.

In particular, Beijing attracted 29.8 billion yuan (US$3.8 billion) in office investment in 2006, as compared to 16.7 billion yuan in 2005.

Shanghai secured 22.6 billion yuan, an increase of 3.2 percent from a year earlier.

A substantial rise in cross-border investment activity was also recorded, as competition among investors, yield compression, and a limited pool of desirable assets have led investors to broaden their geographic search for opportunities.

According to the report, Shanghai led the Asian market with nearly 6.4 billion yuan last year, more than twice the three billion yuan recorded in 2005. American investors were responsible for 2.5 billion yuan, up from two billion yuan a year earlier.

"The increasing volume of global office investment activity over the past five years reflects the abundant institutional and private-investor capital that has been allocated to real estate and the migration of this capital across borders in pursuit of opportunity," Gregory S. Vorwaller, president of CBRE's investment properties group, said in the report.

"Diversification across both geography and property types will continue to drive investment portfolio decisions around the world."

Generally, China's mainland real estate market, which includes residential, office, hotel, retail and industrial properties, continued to be in the global investment spotlight last year.

CHINA Mobile has paid US$284 million for a majority stake in Paktel Ltd, Pakistan's fifth largest mobile operator, the company said yesterday.

The deal has been sealed in Istanbul, Sina.com said today.

The Beijing-based China Mobile now has an 88.86 percent stake in Paktel, a unit of Luxembourg-based Millicom International Cellular SA, which operates networks in developing countries.

Liu Aili, vice president of China Mobile, has been elected as the board chairman of the new venture in Pakistan, said the company.

The venture will be the world's biggest mobile phone carrier's first international deal and is seen as a symbolic start for its global expansion strategy, insiders said.

Paktel, which has 1.5 million users, is valued at US$460 million, according to a statement from Millicom.

Hong Kong-listed China Mobile earned 96.8 billion yuan (US$12.1 billion) last year, up 23 percent from 2005. The company's total user base hit 318 million, a 20 percent increase from the previous year, the company said in a statement last month.

China Mobile's development strategy is to invest overseas, especially in emerging markets, company Chairman Wang Jianzhou said in September.

China Mobile wants to export the marketing tactics and technology it developed in the rural areas of China, the world's largest market by users, to emerging countries.

VENTURE capital investments on the Chinese mainland jumped 55 percent last year, reaching a three-year high, an industry report said yesterday.

Venture capital valued at US$1.89 billion poured into the mainland last year in 214 deals, said a report jointly released by Dow Jones VentureOne and Ernst & Young.

It marked a 37 percent increase in the number of deals year on year.

Information technology remained the dominant industry for investment.

By industry, 131 IT companies were financed last year, receiving US$920.7 million, up 34 percent from 2005 in terms of capital.

Meanwhile, there was significant growth in areas such as healthcare, retail companies and clean technologies.

The business, consumer and retail industry category posted 57 deals and US$613.3 million last year, 20 more deals and 40 percent more capital than in 2005.

The energy segment climbed with 10 deals, up from one in 2005, and US$212.6 million invested, up from US$80 million a year earlier.

"The continuous growth of the Chinese economy and the middle class in China - as well as the increased focus on innovation - are the primary drivers for the significant investment growth in these sectors," said Bob Partridge, China leader of Ernst & Young's Venture Capital Advisory Group.

Stephen Harmston, director of global research for VentureOne, said: "Another sign of the strength is that investors are helping their companies to ramp up quickly in the global marketplace by funding them with increasingly larger sums."

The median deal size in China is now US$5.9 million, up 59 percent from US$3.7 million in 2005.

In addition, the level of second round investment activity illustrates the growing maturity of the venture capital market in China, Harmston said.

"Investors are helping companies to move past the start-up stage into the next phase of development," he said.

OVERSEAS banks are competing heavily for talented workers in China's mainland this year to exploit their ability to offer a full line of retail services.

Citigroup Inc will add another 1,000 employees to its China payroll in 2007, boosting its domestic staff to 4,000, the company said.

In a single week in January, Citigroup opened three new consumer outlets, in Beijing, Tianjin and Shenzhen, as it continued to expand its network in key Chinese cities.

The world's biggest financial group now has 16 consumer operations and six corporate investment banking branches in the mainland.

"Given the importance, size and scale of China, Citigroup is taking a comprehensive approach to our expansion in China, and organic growth remains a key priority," Richard Stanley, chief executive officer of Citigroup China, said earlier.

The Bank of East Asia, whose net income rose to a record last year, will increase its mainland workforce by a quarter this year in a bid to boost profits from the market by more than 25 percent, Bloomberg News reported yesterday, citing Chairman David Li.

The Hong Kong-based bank, whose shares have doubled in the past year, will add at least 500 people in the mainland in 2007, Li said.

The Hongkong and Shanghai Banking Corp will employ another 1,000 people this year after hiring 1,000 additional workers last year.

The world's big names in financial circles are deepening their roots in the mainland's banking sector by establishing their own networks or teaming up with local counterparts as strategic investors.

They are vying for a slice of the country's US$1.9 trillion in household savings.

China's mainland allowed overseas banks to offer a full array of yuan services in December, a commitment required under its membership to the World Trade Organization.

A PricewaterhouseCoopers report in late 2005 forecast that overseas banks will employ more than 16,900 workers in the mainland by 2008, up from 6,654 at the time.