Emma Charnock arrived in Hong Kong four years ago to launch recruiting group Hays’ operations in Hong Kong and China. She has worked for the firm for the last 12 years, first at the London headquarters, then in Australia. She spoke to China Economic Review about the state of recruiting in China.
Q: What is the present situation for Hays in China, and how does it compare with the rest of your global footprint?
A: Hays was launched in China in 2006 and since then we have experienced quite a lot of growth. We now have 50 consultants in Hong Kong, 70 in Shanghai and 15 in Beijing. While we’re a British company, 50% of our business is international. Of this, I would say about half is in the Asia-Pacific region, but this does include Australia where we are market leaders. Only a small percentage is currently in Asia.
Q: What is your China strategy?
A: China represents an exciting opportunity and we’re aiming to increase our market share significantly over the coming 12 months. This will mean doubling our headcount in terms of consultants and opening an office in Suzhou next month.
Q: How did the downturn treat you?
A: Different sectors were affected differently. In Hong Kong, 80% of what we do is with the investment banking community, so it was the hardest to fall. But we’ve recovered back up to peak levels over the last six months. We’ve hired and replaced most of the staff we had to cut back. In China, on the other hand, we didn’t really have much of a problem. We continued hiring throughout the downturn, especially in markets outside of banking. Manufacturing, operations, IT and pharma have all seen growth, and we’ve invested in those markets.
Q: There’s been talk of a looming talent shortage in China. What’s your experience?
A: We work a lot with European and US companies that want to expand into China, that know us from working with us in other markets. I think we’re in quite a good position to find people who want to come back to China to work. Our global network gives us access to Chinese communities overseas and that’s where we get much of our talent pool from. Locally, the consultants’ ability to attract talent is quite difficult. There are over 2,000 recruitment entities in Shanghai alone, so the competition is intense.
Q: Who are your primary competitors?
A: There have been the usual foreign corporations here for the last 10 years, but in mainland China – one of the most complicated recruitment markets in the world – our competitors tend to be state-owned enterprises. They’ve got a huge monopoly in the China market with an enormous number of employees.
Q: The conventional wisdom is that hiring demand for foreigners in China – excluding overseas Chinese – is on a permanent decline. True?
A: I tend to agree, although we still see demand for expats in leadership roles on the mainland. Operational roles are more local hires. However, we’re seeing a big increase in recruiting for Mandarin speakers from other parts of Asia. Singaporeans, for example, have been exposed to other management styles overseas but still speak Mandarin. Technically they are also expats.
Q: There has been a lot of news recently about upward pressure on wages. What are your impressions?
A: Obviously the 18% pay rise in the blue-collar sector is going to have an effect on the white-collar sector. We are seeing incremental wage increases, especially for the half-pat returnees who are now demanding the same salaries we were seeing two years ago. That part of the market is getting pushed up. However, for domestic university graduates, competition is still fierce. Their entry-level salaries are fairly static.