Mar 10 2013
The AESC and BlueSteps recently completed a Q&A with Search Firms in the Chinese market to find their outlook for 2013. First in line we interviewed UHunt, a locally established firm, which was established in early 2008.
AESC: Now that we have begun 2013, how would you describe your outlook for China for the rest of the year?
UHunt: The economy in 2013 has slowed down considerably compared with previous years. China is a market with almost 99% contingency services, with only a few sizeable international firms adopting retainer services for clients. This is a very challenging market and there are no professional rules and regulations to govern this practice in China.
The small contingency firms can always make money in the industry due to the fact that bribery is very common in China. The local HR Manager or Director would normally use their own connections when recruiting, without fair competition or the position being channeled through a proper selection process, and by admitting their own firms as vendors. Even if they seem to use a selection process, they have in actuality often connected with friends and relatives to form small companies under their relatives’ titles, this is so that they can do direct business with this company. Equally, contingency firms are given advantages over retained search firms, as the HRD or HRM will provide insider information and recommendation to their own vendors, and outsiders would never know this.
AESC: What are the current trends you are witnessing in executive search in China at the moment? Manufacturing and IT are strong industries in China. What other sectors are experiencing strong activity in China?
UHunt: The Chinese government started to tighten control by enforcing license requirements; as many firms do not have proper licenses, they use consulting licenses to carry out searches in China. However, this is supposed to be illegal.
The IT industry is the most challenging industry in China, and 99% of search firms conducting searches in this sector are contingency firms. Clients in this sector do not normally want to pay retainers; except for very top level positions such as COO, CEO, and they will use internationally reputable and sizeable search firms for these searches. However, these assignments are rare and there are many small contingency firms involved in this industry.
The Manufacturing industry is much broader in the general sense, as this industry can include automotive, electronics, electrical, consumer products. In China it is common to see small firms compete in a single industry and to specialize in one or two sectors.
AESC: What would you say is of greatest concern for senior-level executives working in China today? Do you think that work-life balance as a bigger challenge compared to other regions? For instance do you think that executives working in China have longer working hours than other regions?
UHunt: I personally think that work-life balance is not the greatest concern in China at the moment. I believe the ethical issues, talent management and employee qualities are the greatest issue facing Executive Search currently.
The Chinese government encourages young people to return to their own town or city for career development and the government provides a lot of support to the second and third tier cities. The aim is to attract young people to return to their cities of origin. Thus, the talent in the first tier cities decreased. Good talent always find it very easy to find good jobs, however, new graduates find it more difficult because companies do not want to invest time and money in them out of fear of high staff turn-over rates.
Moreover, I believe that this is why there is a big gap between graduates and experienced talents. It is not easy to find good and stable jobs for new graduates, but it is equally difficult to identify good, experienced talent in China.
The young people nowadays are more concern with long working hours than the executives aged 60- 70 in China. Recent graduates would prefer to have reasonable working hours, good benefits, which include training and good packages including bonuses.
AESC: What are some key changes within China in the past five years regarding executive recruiting?
UHunt: There are more and more contingency assignments coming through, as clients are only willing to hire contingency firms to save their costs and lower the risks involved. Clients prefer to have shorter recruiter time and pay lower costs but still want high quality services.
AESC: Of the executive searches that you are seeing, how would you describe the ratio of those executives ending up on short lists or being placed who are native to China versus expatriates—local talent verses searching outside the region?
UHunt: Interestingly 10% of the executives in China are expatriates and approximately 90% of executives are native or Chinese speaking.
AESC:Of senior-level executives working in China today, how would you describe them? Are they male, female, older, younger, local or expats, and what changes, if any, are you seeing in terms of these demographics?
UHunt: Today, many senior level executives are local Chinese, compared with 10 years ago which was not the case. Companies prefer to hire Chinese nationals who are educated or have been trained overseas for some years, but have work experience in China.
Expatriates who cannot speak Mandarin will be at a major disadvantage in China. Even for small to medium sized international companies, some prefer to find expatriates who will stay in China, but require them to be proficient in Mandarin.
AESC: What can executives today do to increase their visibility and get noticed by executive recruiters? Broadly speaking, if someone who is not currently working in China seeks opportunities in China, what do they need to know and what skills should they bring to the table to be considered for executive positions in China?
UHunt: Firstly, candidates should study and learn Mandarin, and be able to read and write at a reasonable level. Secondly, they should be more exposed to the Chinese market, through frequent traveling, or involvement in short term assignments and projects in China. Thirdly, they need to have strong technical skills and management skills for a company to bring them to China. They need to be an outstanding candidate in the areas that they have focused in.
UHunt is a locally established firm, which was established in early 2008. UHunt focuses on middle to high end executive search services and human resources consulting services; including restructuring, performance measurement, job–redesign, process review and executive assessments. We are a generalist search firm rather than a specialist search firm and we concentrate more on industrial, manufacturing and professional services such as legal and financial services.
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