economy - Headhunting: another industry you do not want to be in
In my line of business, you do end up talking to people looking for a job, companies looking for people and, yes, also different styles of headhunters. Actually, I even got married to one who left the business, so can claim a bit of an historical overview.
In theory, China should be an ideal hunting ground for headhunting companies, since the fast expanding economy has only a limited number of experienced managers who can work in China.
The other day I discussed with her some of my recent experiences on the China-related labor market with headhunters. "Never work on a contingency-basis," she repeated her old rule, "only on a retainer-basis".
That means in good English that the headhunter is always paid, also when this diligent firm is unable to deliver the required candidate. "Otherwise they might talk to twenty headhunting firms and 19 of them will always lose out," she argued. "It will kill the industry."
Well, if her analysis is right, the industry is on its way being killed.
I saw I never shared with you the shocking numbers about the headhunting industry, but the Shanghai Daily had a few months ago a really decent overview. China has now 5,000 headhunting firms, 500 in Shanghai only. Each year 100 news firms join the mayhem, fortunately, another 100 close also their doors. The value of the industry is estimated to be a USD 1 billion, boiling down to an average income per firm of USD 200,000. Everybody seems to work on contingency-basis, only few customers are willing to pay retainers. And why should they?
That is really very little for an industry that partly has to survive through its volume. You do need volume to survive inevitable failures if you do not work on a retainer. That gives way to many poor-quality performers, with only limited resources.
In the end this is also not helping the recruiting business: the typical Chinese jungle has effectively expanded from manufacturing into services too. Too much low-quality competition, too few good results. Any opposing opinions?
4 comments:
hi, i read your blog when i search for information about headhunting biz in PRC as i am trying to join as consultant, my belief is: this industry is relatively new in PRC, comparing to neighbouring cities like HK and Singapore, as so many international firms coming to build their operation in China, they need help frm headhunters.
what i get from your article is that there are too many low-quality comp but too little good results to make this biz sustains.
do u think that it is actually a process in which low-quality players would be wiped out and the industry ends up with big international players, who also carries other kinds of consulting service
I still think most of what I wrote two years ago still stands: because of the tough competition, it is very hard to build up a higher quality of service. Many companies, including the foreign ones, would make use of this killing competition and it still does not look like there is a premium possible for that quality.
Unlike smaller countries, international players might not be able to wipe out domestic competition that easy, a feature more industries are suffering from.
Fons! Interesting to bump into you again. We talked a bit on QQ last summer when I studied abroad in Beijing with Victor Shih of Northwestern University. I'm actually really interested in the headhunting/recruiting industry in China... I've heard both that there is a glut of unemployed college grads, but also foreign firms are having trouble finding qualified candidates for entry-level jobs. I'm curious how this could be.
Well, you should go to a real expert, of course. I would nobody advise to go into headhunting/recruiting in China, unless you already have a firm foundation.
Problem you mention is a familiar one: most graduates do not have the skill to fill in the vacancies foreign firms mostly have.
Post a Comment