Measures taken by foreign companies since the beginning of the outbreak

Remote work

95% of the surveyed companies set up remote work tools to ensure the continuity of their operations as soon as the Chinese New Year holidays ended, in early February 2020. However, they encountered several challenges like inability to work from home for employees of factories, workshops and construction sites. Furthermore, support functions working remotely also need the necessary IT tools. Thus, relative solutions are sending tools and components to assemble at home, providing VPN access, sending new computers through the IT team and adopting software to facilitate remote work. Moreover, during the pandemic, the top 3 used collaborative tools are WeChat, DingTalk and Zoom.

Flexible work and more flexible hours

49% of the companies surveyed decided to implement a staff turnover policy to reduce the risk of contamination at work, and it was used more often in medium-sized enterprises and large enterprises, whose payroll increased the risks significantly. For these companies, staff turnover took effect at the end of the remote work period, allowing a smoother and safer return to work. Hence, it generally started from the end of February until the end of March. Most chose a system of two teams (A and B), which shared a week each.

Source: daxue consulting, The impact of Covid-19 on the organization and HR of foreign companies in China.

In order to avoid peak hours in public transit, companies reorganized working hours. Employees had departure and arrival time slots, based on their preferences in a 3-hours slot. Furthermore, 5 companies mentioned the provision of rental cars and Didi 滴滴for employees who had to use public transit.

Specific measures to avoid the risk of contamination at work

100% of LEs, MSEs and SEs, and 75% of MEs implemented specific health measures by the end of the Chinese New Year holidays in early February. In factories, the sanitary measures became stricter: reorganization of the changing rooms, footbath at the entrance, more masks supplied per day, and a quicker pace of staff turnover. Additionally, in order to avoid physical contact as much as possible, canteens and meeting rooms were prohibited or fitted to respect the principle of social distancing.

The digital health passport (suishenma 随申码) has been deployed on the Alipay 支付宝 mobile payment app across China since late January. It tracks the movement history of individuals, coupled with the geographic data of the pandemic. Sequentially, it delivers its conclusions in three colors as illustrated below.

Employees’ temperature was regularly checked by digital infrared thermometer at the entrance of the buildings. Furthermore, nominative cards at the entrances were distributed to employees to enter the buildings, and employees were required to keep a physical distance of at least 1 meter in access lines. Beyond these, enterprises distributed masks and hydroalcoholic gel to employees in the office and implemented disinfection protocol every 2 hours.

Undoubtedly,  China’s measures to suppress the spread of the Covid-19 have achieved significant success. Meanwhile, these technological and organizational transformations enabled developments in working remotely, tracking population movements and establishing QR tracking

Operations resumption

The companies surveyed had largely resumed their operations by February 10^th. Authorizations to restart the activity were issued for 88% of small and micro enterprises, compared to 75% of large and medium-sized enterprises.

According to the company’s activity sector, the full recovery is very contrasted, mainly assessed on a case-by-case basis by local authorities. Thus, companies whose areas are considered strategic, such as health or chemicals, have not encountered any difficulty. On the contrary, business sectors based on physical stores suffered a slower recovery, especially those in physical retail.

Check out our pages about how China is recovering from the Coronavirus outbreak and the Coronavirus China economic impact report by Daxue Consulting.

Main HR challenges met by French-speaking companies in China after the outbreak of the Covid-19

Employee motivation and involvement

In early February, the motivation of employees was divided between the desire to resume normal work and the risk posed by contamination in the office. At the end of February, employees’ motivation was affected by the remote work, emphasing the importance of “social work ties” over time. However, the comments of the respondents remained appreciative towards the state of mind of their employees during the crisis and 80% of surveyed companies considered their employees motivated during the crisis.

Assuming that most of the respondents believed that their employees were motivated, the comments showed that it is more the respondent’s state of mind that prevailed in answering this question. Thus, a respondent who is somewhat optimistic about the evolution of the situation will tend to say that his employees were motivated.

To successfully identify the feelings of employees during the crisis and determine their needs, several companies conducted internal surveys at different times during the crisis.

Employee’s feelings

70% of companies surveyed find their employees concerned, especially during the month of February. Fears were mostly fueled by the following causes:

• Staff were worried about potential issues around salaries and job security.
• Fear of contamination during transportation to work and at work.
• Concerns about the return of other employees from high-risk areas.
• Fears on current activities and projects.

Additionally, employees were also curious about following questions:

• What was the financial impact for the company?
• What were the legal and economic repercussions on employment?
• How would the recovery be organized?

Thus, knowing how to assess the mental wellbeing of employees during Covid-19 disruption became nonnegligible for companies. It is notable that short- and medium-term business fears were not necessarily correlated with the size of the business on its pre-crisis financial health. Similarly, subsidiaries of large groups and midcaps in China were not spared from these concerns.

Crisis communication and leadership

While facing these different challenges, leaders and managers insisted on their role in the communication process to answer the questions concerning the business’s economic future, job security, and organizational changes. Regular crisis communication brought visibility and transparency to employees. These methods were necessary to reassure and reduce feelings of anxiety among the employees.

Some comments highlighted the importance of leadership in helping employees get through the crisis. Companies cited decision-making and responsibility as essential leverage for organizing remote work and resuming activities.

Many employees were stranded in high-risk areas and the bottlenecks were long-term since they were unable to reach their workplace from January to April. Some workers were denied entry to their dorms, or were no longer travelling between provinces, according to local regulations. As for the solutions to overcome these issues, remote work remained the leading one.

Source: daxue consulting, Covid-19 impact on the organization and HR of foreign companies in China. Many companies had employees stuck in high-risk regions like Wuhan.

With the global expansion of the pandemic in March that forced the Chinese authorities to close their borders, some expatriates were stranded outside of China. Thus, French-speaking companies in China expected difficulties, particularly for visa renewals and expatriate family life.

Work-life balance

Isolation impacted the work-life balance, which was becoming increasingly difficult to maintain, causing more fatigue and burn-out among employees. Concentration difficulties were sometimes linked to the lack of peace at home, the presence of young children, or the absence of a formal working environment. In fact, 45% of companies believed that children’s education from home has had an impact on the availability of employees. Hence, for some employees, the home work environment resulted in a lower level of productivity.

HR policies implemented by French-speaking companies in China to ride out the crisis

Salaries

Overall, there have been several cases of wage cuts or deferrals during the crisis. However, we observed a clear cap between companies of more than 5,000 employees in China and the rest of the landscape of French-speaking companies interviewed. 50% of LE s decided to act immediately on employee salaries, compared to 17% of SEs. Generally, the wage cuts targeted the executives and the companies’ highest wages. Otherwise, they were linked to a significant impact of Covid-19 on foreign company’s activity area.

35% of the companies surveyed were likely to freeze or cut wages in the short-term, no matter the size of their workforce. Besides, comments showed that future freezes or reductions would be subject to many uncertainties, and linked to the difficulty of anticipating a return to normal activity. Again, some comments indicated that these freezes or cuts would generally affect the highest salaries.

Source: daxue consulting, Covid-19 impact on the organization and HR of foreign companies in China. Large enterprises were more likely to reduce wages during COVID-19 in China.

Layoffs and recruitment freezing

9% of the companies surveyed carried out at least one layoff during the crisis. In the sample surveyed, theses layoffs affected small enterprises. With less financing than subsidiaries of medium-sized companies and large groups in China, small enterprises were hit hardest by the crisis, and were sometimes forced to fire employees. However, it was unclear whether the 9% of layoffs were all directly related to the crisis or not since several comments referred to restructuring plans implemented before the crisis to justify the layoffs.

On the other hand, recruitment was frozen. Overall, there were fewer recruitments during the crisis, except for strategic positions. Store sales, support of customer service positions, directly affected by the crisis, were impacted by the freeze. As for strategic positions maintained, were mainly digital ones, directly related to the good performance of online services during the crisis. Comments showed that IT and social media positions were strategic during the crisis. Here is more information on how the e-commerce industry in China is changing during Covid-19.

New recruitment methods and organizational adjustments

Several French-speaking companies in China added that they encountered difficulties in the process of recruiting new candidates in China during the epidemic. These challenges stemmed from the inability of recruiters to meet candidates in person. As a result, interviews by videoconference were mentioned to facilitate the process, as well as the use of psychometric tests as additional decision support.

Also, companies wondered about a potential change in the professional aspirations of candidates: “Will the epidemic push some candidates to look for work closer to their homes?” and thus never leave their province of origin…

As for organizational adjustments, a few companies reported using the “zero-based budgeting” method to adapt their HR policies during the crisis. The zero-based budgeting (ZBB) is a method of budgeting in which all expenses must be justified for each new period to focus on cost containment. This budgeting method is contrary to incremental budgeting, which applies additions or deductions to the last period’s actuals.

Future prospects of French-speaking companies in China after the Covid-19

Forecasting the recovery

Most of the French-speaking companies in China do not forecast a full recovery until Q4 2020 or Q1 2021. Indeed, the epidemic still impacting Europe and North America and will affect the visibility of the companies whose operations are globalized. According to them, three indicators need to be closely monitored: order book, cash and the working capital requirement (WCR). Conversely, French-speaking companies in China whose operations are based exclusively on the Chinese domestic market have seen their activities restart at a quick, sometimes surprising pace.

An example of a respondent’s foresight of his operations’ recovery: From April to May, in the short term, slight impact of Q1 very easily absorb-able on Q2; From June to December, in the medium term, a possible violent reversal; On January 2021, in the long term, operation recovery will depend on the possible relocation of customers, the US election results and the international situation as a whole (political, economic and financial).

Some strategic changes and experience from the Chinese subsidiaries

To cope with the impact of the Covid-19 on foreign companies in China, decision makers are taking advantage of the momentum of online services to develop their digital activities. Others have made complete strategic changes to survive the crisis.

The French-speaking subsidiaries in China, whose headquarters are located abroad, transferred the experience in China. The questions are mainly related to the necessary protective measures to be taken for the work resumption and the end of isolation. Main tips are the followings:

• The Chinese team in support of the group’s crisis unit.
• Implementation of China’s best practices for the French headquarters.
• Toolbox for the crisis management experience sent to headquarters and global teams.
• Online webinar with the subsidiary: The impact of Coronavirus on the Chinese markets and its innovations.

We are still far from having drawn all the conclusions from the health crisis since the world has switched to an economic one. This study initiated by daxue consulting and Dragonfly Group provides a solid outline to understand the operational and organizational transformation in which the international companies have engaged in China. We are grateful to those companies which agreed to participate in this survey and their contributions are definitely significant. If you have any question, please feel free to contact us.

See how companies in China responded to the COVID-19 crisis in our Crisis Management Report

Listen to 100 China entrepreneur stories on China Paradigms, the China business podcast

Listen to China Paradigm on Apple Podcast

This article The impact of the Covid-19 pandemic on the organization and HR of foreign companies in China is the first one to appear on Daxue Consulting - Market Research China.

In this episode, Nicolas Coster, a business lawyer, explains how employers in China are impacted by the health and safety rules during the coronavirus crisis. The business lawyer explains some changes in relationships between employees and their employer due to the virus crisis and discusses the consequences of excessive stock up of masks.

Jump to the questions:

• 0:26 What are the obligations of employers to their teams? What about masks and disinfection?
• 2:30 Are employers obligated to accept remote working from their teams?
• 3:08 Are there some changes in terms of relationships between employers and employees due to the virus outbreak from a legal perspective?
• 4:29 Is it punishable by law to stock masks or hydro-alcoholic solutions? Can it be taken by the government?

Daxue Talks is a show powered by daxue consulting, a china-based strategic market research company founded in 2010! With Daxue Talks, you will stay up to date with all the latest business updates in China.

The ultimate Coronavirus economic impact in China report

This article Daxue Talks 37: Chinese health and safety rules during the coronavirus outbreak is the first one to appear on Daxue Consulting - Market Research China.

What does an entrepreneur need to be aware of when it comes to labor taxes in China?

In today’s Daxue talk, Matthieu David, the founder and CEO of daxue consulting, discusses the tax rate imposed by the Chinese government on labor and gives some examples of non-taxed items for foreign workers in China.

Daxue Talks is a show powered by daxue consulting, a china-based strategic market research company founded in 2010! With Daxue Talks, you will stay up to date with all the latest business updates in China

This article Daxue Talks 34: Hiring in China: Chinese labor taxes is the first one to appear on Daxue Consulting - Market Research China.

Full transcript below:

I am Gabriel from Shanghai Li Dong Fang Law Firm, I am a lawyer with 7 years of working experience. My specialty is labor law, company law, intellectual property rights, trademark, copyrights and international trade, banking rules.

1. What do you need to be careful of when signing a labor contract? What are the typical issues?

First, the type of the entity. We should be careful with the type of the entity we are going to sign a labor contract with. In Chinese law, only entities with legal personality can hire people. For other entities like the representative office of a foreign company, they can only hire staff through a third party. For example, Tesco, foreign enterprise service corporation.

2. What do you need to be careful of when hiring someone? What are the typical issues?

When hiring someone, the employers should make sure their potential employees have graduated, have already graduated. Because in the Chinese labor law, the in-school students are not competent entities, in the Chinese labor law. And, make sure the applicants have no criminal records. Besides this, the employers should also check the potential applicants, their potential employees could apply for the job. For example, the diploma of their graduation and the qualification for the job should be true and valid.

3. What do you need to be careful of when hiring the cleaning person in the office? What are the typical issues?

Regarding hiring the housekeeper, my suggestion is that we should pay attention to the age of such cleaners, or housekeepers. Because in Chinese law, for the retired people, the company can sign a service agreement with them. By doing so, saving the cost of medical insurance, retirement funds, public reserve funds, and unemployment compensation. However, we should also pay insurance for them, just in case of an accident.

4. How can employers make changes to existing employment agreements? What kind of penalties employers can include in a labor contract?

In Chinese law, the employment contract can only be changed with mutual consent, mutual approval from the parties’ guarantor. And, the law provides that the employers shall include penalty other than China expanse. For example, if the employers are out of cost of its staff, oversea study and training costs of the third party’s scope, then, when the contract, when a labor contract is terminated, the employers have the right to ask its employees to pay back such funds.

5. What constitutes illegal work by foreigners in China? In the case of illegal employment in China, what responsibilities will the employee and employer assume?

Namely, working in China with foreign expats working in China without a work permit constitutes illegal work. But there are other forms of illegal work. For example, when foreign expats register, apply; when they apply for a work permit, their employers and workplace will be registered in the database. Well, if such foreign expats work for other entities or in other places, that constitutes illegal work too.

Just in a word, if the foreign expats have a part-time job in China, well, they’re risking doing illegal work. And in this case, in that case, the foreign expats shall be subject to a fine between 5 000 RMB and 10 000 RMB. Their employer shall also be subject to penalty fines. Normally, the employer shall pay 10 000 Chinese yuan per illegal worker. The maximum amount of such penalty shall not exceed 100 000 RMB.

Daxue Talks is a show powered by Daxue Consulting, a china-based strategic market research company founded in 2010! With Daxue Talks, you will stay up to date with all the latest business updates in China.

This article Daxue Talks transcript #15: consultation with a lawyer about employment in China is the first one to appear on Daxue Consulting - Market Research China.

This episode features Gabriel Yu, who is a lawyer with 7 years of working experience with a specialty in labor law, company law, intellectual property rights, trademark, copyrights, international trade, and banking law. In this China business vlog, we ask Yu the most common questions related to employment in China.

Jump to the questions:

• 00:39 What do you need to be careful of when signing a labor contract? What are the typical issues?
• 1:21 What do you need to be careful of when hiring someone? What are the typical issues?
• 2:17 What do you need to be careful of when hiring the cleaning person in the office? What are the typical issues?
• 3:05 How can employers make changes to existing employment agreements? What kind of penalties can employers include in a labor contract?
• 4:14 What constitutes illegal work by foreigners in China? In the case of illegal employment in China, what responsibilities will the employee and employer assume?

Daxue Talks is a show powered by Daxue Consulting, a china-based strategic market research company founded in 2010! With Daxue Talks, you will stay up to date with all the latest business updates in China.

This article Daxue Talks 15: China employment tips is the first one to appear on Daxue Consulting - Market Research China.

Full transcript below:

Matthieu David:  Hello everyone. I am Matthieu David, the founder of Daxue Consulting and this China marketing podcast, China Paradigm. Today, I am with Jenny Shi. You are the founder of Uniway Recruitment and we know each other from an organization called EO, Entrepreneurs’ Organization.

You created your company a few years ago, and before that, you had extensive experience in different foreign companies in different countries. And now, you are supporting the Chinese recruitment industry. Do you want to tell me if you like the word “headhunter in China?” Some people don’t like it because it’s too aggressive. But you’re not providing HR services in China, it’s a bit more than headhunting in China, as far as I understand, and about advising for careers. It’s about the recruitment process in China and finding job candidates in China. In terms of clients, you have very large companies like Siemens, Sisley, Discovery Adventure Park, etc., one Chinese. Why is there only one Chinese client in the Chinese recruitment industry? You are going to recommend service in most of the big cities in China, Beijing, Suzhou, Hangzhou, Shanghai. My first question is, could you give an idea, to the audience, of where you are in terms of development? It could be the number of equipment, revenue, the number of clients you’ve got or the people you interviewed. What is the size now of your headhunter in China? 

Jenny Shi: Thank you for your question. It’s a pleasure to speak with you as well. I embarked my entrepreneurship in China basically three years ago. Over the past three years, we have accumulated about 25 clients of both Chinese companies and overseas companies from Europe and the U.S. Frankly speaking, the majority of our clients are from Europe countries like France, the Netherlands, and the UK. Currently, we’re also growing our client base with more Chinese companies, due to their needs for headhunters in China. For instance, in the past six months, we have acquired five new local Chinese companies that are growing with huge potential. The majority of them come from E-commerce in China. Currently, we are still a small team with five full-time consultants. We are aiming to double our team members by the end of this year.  In terms of the growth rate, from 2017 to 2018, our revenue growth rate is about 33%. And we are aiming to maintain at least this growth rate this year or with a little bit of more aggressive progress. 

Matthieu David:  Talking about the Chinese clients, in your presentation, you’re mainly talking about VIPABC, now called Tutor ABC, the only Chinese client you mentioned. When you work with the Chinese clients from E-commerce, are they recruiting job candidates in China for global expansion or for local managers? Because your key asset and positioning have to be international, to be able to recruit employees in China for foreign properties in China or to be able to bring in international talents in China for Chinese companies. Could you tell us more and if you see something happening with local companies recruiting international talents in China?

Jenny Shi: In terms of client acquisition, we don’t have any preference for either Chinese or Western companies. It’s mainly due to the needs of the Chinese recruitment industry. The Chinese recruitment industry is very much a relationship-based business. Last year, we got 77% of clients referred by our previous clients. If we have already a very big base of European companies, then it’s very natural for us to get more referrals from that side. VIPABC is actually the first client that I worked with for the first year when I found Uniway Recruitment. In terms of the methodology of working with the companies, it was not much different. It doesn’t matter if the client is a Chinese or Western company. It’s just probably the needs of recruiting employees in China. The direction of the selection is slightly different. For European companies here in China, they are targeting bilingual job candidates in China, while for local Chinese companies, sometimes they don’t have the language requirements. It’s mainly focusing on the qualification of the technical side. That’s probably the difference. 

Matthieu David: You mean when you work with Chinese companies, you are working for the local market, right? 

Jenny Shi: Yes. 

Matthieu David: How do you explain that European clients are most of your clients? Does it mean that they are more used to outsourcing the hiring process in China by partnering with a headhunter in China? How do you explain that? 

Jenny Shi: Basically, people come to a headhunter in China for a couple of reasons. First of all, they may not have the right type of resources for recruiting employees in China. Secondly, they want to save the time or hiring process and improve efficacy. The third one is enjoying the HR service in China, to share the industrial language of hiring process in China and marketing intelligence of the Chinese recruitment industry, because, for headhunter in China, one of our benefits is that we are not just talking to one or two companies, but to all the competitors of our clients. In this case, we are able to offer them the marketing intelligence, including the compensation benefits system of their competitors, the directions of the job candidates in China, where they’re working and why they are choosing certain specific companies. This knowledge is very important for our clients. For instance, if they already have the information of the compensation benefits structure of other competitors, it is going to be very useful for them to define or have the trust of their own compensation or benefits structure to attract their target job candidates in China.

Matthieu David: But you have a problem of working for competitors. Some advertising agencies will not work for one car maker and the other one. They have to choose one or another, or the clients have to choose another agency that is independent to have only one of them. Are your clients taking the fact that you are probably working with their competitors or people in the same field as an advantage or as a risk?

Jenny Shi: If we analyze our successful placements for our clients, the job candidates in China are mostly from directly-related industrial backgrounds. They work for the service fee because that’s social hire. The client wants to utilize the experience of these job candidates in China directly, instead of spending two, three, four years to train them. That’s the majority of the cases that we work on. The headhunters in China want job candidates in China with experiences. Of course, there might be issues involved in the candidates’ sides if they choose to work for the competitors because some companies will have a very strict non-disclosure agreement included in their labor contracts. But this very much depends on the previous company of the job candidates in China, if they’re very strict on the agreements of not working for direct competitors or not. The solution could be case by case. 

Matthieu David: Is it picky as other industries on the hiring process in China?

Jenny Shi: I wouldn’t say all our clients are very picky when it comes to choosing the right job candidates in China. They all want the best job candidates in China from the Chinese recruitment industry, the top 20% of the candidates because that’s what they pay for. They pay for recruitment services. 

Matthieu David: You said that referrals are a big driver for your growth. Do you think there is a bit of scalability in referrals?  Do you think there is something you can build in order to speed up the referrals with more clients to you from your past clients? I am sure you have thought about the scalability of this way of getting clients. Have you found something which works?

Jenny Shi: A plan to refer is very effective. For instance, we used to work with the AXA group, one of the biggest French insurance groups in the world. The client was very happy with our service and then he referred all companies under the AXA Group in China to us. It’s very effective because it’s a warm and trustworthy introduction from the existing clients. That’s also one of the strategies for us to gain more clients, by referral. 77% of our existing clients were referred by our past clients because they are happy with what we have done for them. Therefore, our mission is very simple, which is to help our clients improve the efficiency and quality of their hiring process in China. Once we can achieve that, then we make sure our clients are happy. They are happy to refer clients to us as well.

Matthieu David: Referral is a bit random. Do you think it’s possible to systematize referral? Is it to meet with them every month to make sure that they have thought about new opportunities for you? Is it to interview them on video or to make them talk in a conference you organize? Have you thought, found, or thought about the way to leverage these referrals? For Daxue Consulting, it’s very random when people recommend us. One time, it happened on a plane. We were asking one client how they knew us. He said it was from someone next to him on the plane. They were talking about market research in China and consulting in China. The other one said, “Daxue Consulting. Work with them. They are pretty good.” And we got a referral. But how can I scale that? Is it a concern for you or you are already pretty happy by the fact that it’s random?

Jenny Shi: I share your pain and also, your experience as well. For us, we have externalized clients’ screening process as well, the same as when we are screening our candidates. For us, one of our core values is quality, the quality of clients as well as the quality of the candidates plus the quality of our work. We do a pre-analysis of the clients and ask a lot of questions including their vision, strategies, business model, what type of job candidate in China suits them best, and if they have very scientific talent management process in position. Also, we do financial background checkup as well. So, it’s not like random. We analyze which clients to work for. We are very careful and selective. 

Matthieu David: Talking about the quality of clients, I thought about Glassdoor. I also thought about what people think about the company culture in China online. Are you using technology for recruitment in China like Glassdoor or LinkedIn? I believe it’s already frequently used. What kinds of other technology for recruitment in China do you use to assess the company, find and assess the job candidate in China? In the West, I believe LinkedIn has got a large space in the industry. There is also Glassdoor with a lot of growing companies on it. What about in China? Do you have equivalents or the same websites? Do you use any online technology for recruitment in China? I’d be very interested to know. 

Jenny Shi: In terms of the candidate sourcing channels, there are a lot in China like in every other country. LinkedIn is a global channel for recruiting employees in China. Locally, we have Liepin for the middle to senior positions. For some other Internet-based companies, they use Lagou and Boss Zhipin. I think you may have heard about them. For the senior positions, we have 51Job and Zhilian Recruitment and so on. More and more social media channels are coming up, for instance, all the WeChat groups and online channels for recruitment as well. But frankly speaking for our business, we’re pretty much focusing on the middle-to-senior-level positions. We use quite a lot of our own database that we have accumulated in the past couple of years as well as LinkedIn and Liepin. Most importantly, we spend a lot of time talking to the people in the industry and asking for referrals. It’s a very much a time-consuming job because we have to qualify the job candidates in China. We make sure the job candidates in China are in good quality because we think only qualified job candidates in China will be liked and selected by our high-quality clients.

Matthieu David: When you say you are pitching senior people, does it mean that it’s only C-Level? Then, you don’t need to go on LinkedIn. It’s only going to the website of the company or by talking to the competitors and reaching out to see the competitors of similar companies? Is it the reason why you don’t really use LinkedIn because you know it’s a C-Level? Is it what you mean? 

Jenny Shi: For hiring C-level job candidates in China, frankly speaking, we would say referrals will be much more useful than reading the messages on the website because they don’t usually apply for jobs or open channels as well. So, it’s all done by referral or the previous database. 

Matthieu David: In your presentation, I saw that you are able to find and give answers within 48 hours and complete the hiring process in China within four to eight weeks, which is really fast. But based on the fact that when someone wants to leave a position, they have to give a one-month notice. How does it work? How can you be so fast in recruiting employees in China? 

Jenny Shi: The Chinese recruitment industry is very competitive. It’s like a red ocean business. The quality and speed are very important for us to be competitive in the talent market in China. The reason why we are able to shortlist candidates within 48 hours is that we have an existing database tool for recruiting employees in China. We know the job candidates in China over the years. It’s already a well-established relationship. At the same time, our team is very committed and dedicated once we commit to working with the clients. So, it’s an internal requirement as well. In terms of the cycle of replacements, four to eight weeks is historical data. For our replacement, it’s also our internal requirement, because we need to make sure the placement is efficient with quality. Plus, it’s also internal management, because as a consulting service, we need to calculate our fees by hour or b day. It’s very important for us to make sure our cash flow is very healthy. If we finish one placement for three or four months, it’s going to be very hard for us to make any profits. But if the position is very senior like the executive, director, or vice president level, then it allows us to have more time. That’s a different case because right now, the majority of our target positions are middle to senior positions. For instance, the senior manager is a position with salaries of around 500K to 800K and the timespan of replacement is two months maximum. If it’s over two months, it’s very nervous for both us and our clients. 

Matthieu David: You wrote on your PPT that your fee is 25% of the annual package, right?

Jenny Shi: This is really transparent in the Chinese recruitment industry right now. We propose a contingency as well as a retainer-based search. Sometimes certain clients will be able to also accept a retain. Normally, the fee is going to be a three-month salary of the candidate. And this is quite transparent in China.

Matthieu David: Three months equal to 25%. One month salary is 8%, so basically 25%.  It’s pretty transparent and everyone has the same metrics and standard on charging. 

Jenny Shi: Yes. 

Matthieu David: I want to go back on the technology for recruitment in China. You said that you use Liepin, Lagou, and so on, depending on the industry whether it’s tech or non-tech. We talked about LinkedIn for the global profile. You didn’t mention any website that is also helping you to understand the company culture in China like Glassdoor. Do you have similar websites that help you in China to frame the company, to know if the company has a good reputation? What website would you use? 

Jenny Shi: Right now, in China, we have a pretty new website, called Qichacha. It’s to check the background of every registered company. We can go through to see if there is any lawsuit involved with the employees. Everything will be recorded in the system, which is transparent to everybody, talents, and suppliers. But for us, the beauty is we have a wide connection of people, of talents, of clients. It’s very easy for us to do a quick reference. On top of that, of course, we visit every single client to also ask questions to qualify them based on our experiences as well. Once we have a long-time accumulation in the industries, we will be able to easily reference-check on the companies.

Matthieu David: We talked about the company culture in China. We saw the news of “996” in China that you work from nine to nine and six days a week. Is it currently in the Chinese recruitment industry? Is it common for you to see online, from your job candidates in China, or from the companies? Is it a standard in China? Is it something that job candidates in China don’t want, so they will prefer places with company culture in China that respect their life? What’s your feedback on this? Actually, companies can’t tell you if it’s real or not.

Jenny Shi: That’s a good question because it’s a hot discussion on the Internet right now in China. I will say this is very much limited to Internet-based companies like E-commerce, but not the traditional companies at all. It’s a very company-by-company practice. For instance, for us, we’re not encouraging 996 working hours as well. It’s crazy. A lot of issues will come with job candidates in China. The E-commerce platform, for instance, is pretty much 9-9-6 working hours. And sometimes, it’s even worse. This is one of the reasons why job candidates in China will like to switch platforms.

Matthieu David: To switch to another industry, not to be in the tech industry anymore. And you see that in your environment?

Jenny Shi: Yeah, based on the interviews with job candidates in China in the E-commerce platform.

Matthieu David:  Talking about online technology for recruitment in China. You talked about Qichacha, a Chinese website where you will be able to check more official information, not really reputation actually. How do you build your own database? Is it one by one when you meet with job candidates in China? Do you extract data from other technology for recruitment in China? If you have to input all the names, it’s a very painful and long work. How do you work to build this database?

Jenny Shi: Firstly, what you mentioned is one of the technology for recruitment in China we used. It’s quite traditional and not very efficient. At the same time, we do data acquisition for recruiting employees in China. We also invest in the data acquisition from different technology for recruitment in China as well by checking the quality of the database.

Matthieu David: So, you can buy a database. That’s what you are saying. 

Jenny Shi: Yeah.

Matthieu David: Interesting. In your presentation, you mentioned the key account management model. What do you mean by key account management model? Key account, for me, is kind of a position like a key account manager. Is it a business plan in China? I am surprised to use it as a business model. Could you explain more?

Jenny Shi: For us, I believe to successfully run a business, I personally like to use the 80/20 rule in business, because I think that 80% of our revenue comes from the top 20% of the key accounts, which means we have a lot of clients, but not every client is a key account. We define a key account as a client who values our service pretty much and forms long-term, stable cooperation with us to ensure the cooperation is long-lasting with quality and commitment from both sides. Normally, we make more profits and revenues from those clients. During the whole hiring process in China, we also put a very significant amount of time and efforts to maintain those kinds of clients in order to grow with them.

Matthieu David: So, building a relationship is dedicating to clients so they can understand the job candidates in China very well and come back to you even if they have no business, but just to share ideas and what’s going on in the company. Key account management is to go into the company and understand it as if it was used to be able to build a strong relationship. That actually links to another question I had. It’s about company culture in China. For example, it’s quite easy to know if someone can use Excel VBA. You can test their knowledge. But the difficult part for every entrepreneur in China who had an experience of recruiting employees in China is whether this job candidate in China fits in its company culture in China. Will they fit in the organization with the way they interact with people? Is this person too aggressive or not aggressive enough? Is this person an introvert, not introvert enough and so on? Do you have a process? Since you are aligned with your client, if the job candidate in China is leaving because they don’t fit culturally, you have to find another job candidate in China again without any profits. So, you have to know about the company culture in China. How do you assess company cultures in China.? It’s so hard. 

Jenny Shi: Alright. This is a very, very interesting topic for recruiting employees in China. Before I answer your question, I would like to also share some data. According to a Hays survey last year, basically 43% of the candidates leave a company because of cultural fit issues in the workplace. It’s a significant issue when it comes to mismatch. So, we place significant importance on cultural or value match while recruiting employees in China. When we visit our clients, before we actually do the job debriefing, we talk about the fit of company culture in China as well. We will specifically design a set of questions to define if they have a very solid company culture in China or core values or not. This is one of the criteria for us to select clients as well. Once they have a very satisfying answer on this one during the process of selecting job candidates in China, we will align with our clients a set of questions to evaluate if the core values fit. We don’t do this alone as an agency. We work very closely with our clients, with CEOs, with the decision makers to finalize this specific topic, because, frankly speaking, it’s a little bit abstract in terms of qualification in the technical fields. On our own side, we also have tools to test the personality of job candidates in China like logical thinking requested by our clients. For senior-level job candidates in China, we even do testing by new technology for recruitment in China that we created. We show them 20 to 30 pieces of artworks to know the person because we believe the artworks themselves are effective. Once people answer our questions, it’s a subjective reflection of who they are. We found this very interesting and helpful. We will write up four pages of reports to our clients of our observations of the job candidates in China because this can help us remove our own subjective judgments prior to reading their CVs, which we found very fascinating and very effective as well. 

Matthieu David: I know a company that asks a candidate to write a letter with a pen to understand the writing of the candidate and to understand his personality based on the writing. I read the feedback and it was pretty direct in saying that he’s very driven, ambitious, but he’s going to do whatever he wants based on his writing. He’s someone who is very social but actually doing to do what he thinks is good, even if it’s nice to hear. Do you use hot words? What is common in the Chinese recruitment industry to assess the character of job candidates in China? Is it the writing, questioning or software? I know a software called Predictive Index. You have to actually answer two questions, what do you think of you and how do you qualify yourself. You click on the word that corresponds to your answer. What have you seen in the Chinese recruitment industry in order to assess the personality of the job candidates in China? Not the skills, because the skill is actually the easiest part. Artwork? 

Jenny Shi: There are different types of personality evaluation tools for headhunters in China. The traditional and famous one, for instance, is called the DiSC that most clients pay for after the candidates go through the test in order to get the job. This is also a scientific personality test or psychological test to understand the personality of the job candidates in China. It’s a very common technology for recruitment in China for multinational companies to use when they are recruiting employees in China. For us, we actually created something new on our own. It’s also because I am interested in art myself. One of the core traits for senior-level job candidates in China is to be very creative and able to solve problems with different solutions. That’s why we use artworks to see how creative they are and how many dimensions they are able to answer the questions. Frankly speaking, based on the historic tests that we did with our job candidates in China, we found almost 82% of the management-level job candidates in China have something in common. They are able to see both the details and the big picture of the job candidates in China. They are able to describe them in a specific way, which is fascinating. For instance, also for the majority of executive assistant type of job candidates in China cannot really focus on the big picture, because the job itself is very much detail-oriented. So, when they answer the questions, they focus more on describing the details of each job candidate in China.

Matthieu David: Very interesting. How did you build this method? Where did you get inspiration? Did you read books?

Jenny Shi: We basically did a lot of tests and then we found a common result. Then we do the statistics to prove if the major trends are similar. This is not practiced by any other companies by now, I guess. 

Matthieu David: Talking about a bit more theoretical way of analyzing someone or maybe more sophisticated than just occasionally checking the skills, would you have some books or some resources to suggest on how to run an interview or how to assess the personality of someone? You mentioned the tests before, but do you have any books you feel are useful and especially work well in China? 

Jenny Shi: I wouldn’t say specifically in China, because, by my experience, when it comes to assessing candidates, it’s global. It’s universal and similar. If I need to recommend a book, I would say “Topgrading”. It’s a good book to follow. The methodology is very scientific, but it takes a long time for employers to go through the whole methodology and there are quite heavy interviews of two to four hours about the patterns to find the consistency in the job candidates in China. 

Matthieu David: What would you suggest a company or an entrepreneur in China do when he is managing his company? Do you have some tips on managing people in China? Take me as an example. I’m doing interviews with job candidates in China every Tuesday afternoon, even when we don’t need to recruit employees in China immediately, I interview potential job candidates in China who apply on our website to be aware of them. Sometimes you create a position because there is a good job candidate in China and not necessarily because we need it immediately. The other reason is that maybe you may need to recruit employees in China in months so it can be good to initiate a relationship. That’s one advice I could give to someone who is asking me how to be successful in recruiting employees in China. Would you have other tips to share on recruitment besides to work with you of course, but on managing human resources and also recruiting?

Jenny Shi: What you did is very important because we believe recruit employees in China is not an event, but a process with continuous efforts and consistent actions. It’s very important to have the desired result. For companies, especially fast-growing ones, it’s always important to have one or two persons to be very consistent in the hiring process in China to build a pipeline of internal talents. It’s not only limited to fast-growing companies, but also for well-established companies. The reason I’m focusing on fast-growing companies is that we are all entrepreneurs in China. Normally startup companies lack a very strong branding in China.  It makes it even more difficult to attract good job candidate in China. That’s why we need to have a very strong pipeline. When the job candidate in China leave the company or something happens, you have a very good solution to solve the problem, instead of being in a situation that you don’t have a job candidate in China to fill the position for six months or a year, which can create a big damage to the business. Other tips that I can give on how to recruit employees in China is first off, there are a few questions that we need to answer as the owner of the companies. 

First of all, who are our target job candidates in China? I think it’s very important for us to define our talent selection criteria and who suits us best at this stage of the business. We hear a lot of owners and CEOs talking to us, “Jenny, we need the best job candidates in China or A-Players in the Chinese recruitment industry.” Frankly speaking, every company wants to attract the A-Players and top job candidates in China. But the question is if they’re suitable for the business or at this stage. That’s why we need to ask ourselves if it’s the best suit. The organizational self-awareness is very important as well. And this is related to the company culture in China and the working system. So, we need to have a very clearly-defined company culture in China as well as the whole talent management system to maintain the talents. 

The second question is where our target job candidates in China are and who they are working for right now. This is a direction for us to maximize our talent sourcing channels. For certain talents, we are sourcing in different ways. It could be from a headhunter in China. It could be a referral. It could be job advertising through the target channels. That’s why it’s very important for us to know where our targeted job candidates in China are. 

So, the third one is how to evaluate and attract job candidates in China. We always need to find our ways to attract good job candidates in China. Question number three is how to evaluate, attract, and talk to job candidates in China. Once we are clear of who we are as a company, it’s very important for us to have a very professional screening process to make sure we have the right tools in position to evaluate the job candidates in China on what we want based on our talent selection criteria. 

To attract talents in China, according to the statistics that we have, there are mainly two reasons for talents locally to leave their jobs. The first one is the misfit with the company culture in China, which means they’re not very happy with their line managers or the working system. The second one is they are not very happy with their package or salary. Up to 70% of job candidates in China leave their jobs for these two reasons. The business owners and line managers need to bring these into consideration. During the interview process, it’s very important to also identify what job candidates in China are looking for, what motivates them most, why they want to switch jobs, and why they are specifically interested in your company. Questions like these are very important. 

Number four is, once we successfully attract the candidates and introduce the candidates to our company, how to retain job candidates in China? We will suggest all the companies to have a strategic talent management system in position. This one links to the monetary and the non-monetary rewards system, meaning compensation benefits system is not just about money. It’s also about non-financial tools to recognize and reward job candidates in China in different ways to pay attention to their personal development, instead of only their professional development. On top of that, the whole company, HR professionals, co-owners, line managers, all need to work closely together to retain the talents by making sure that they feel happy to come to work every day. Of course, this is a continuous effort. 

Matthieu David: Do you help your clients on this side?

Jenny Shi: It depends on what type of clients they are. Normally for the fast-growing companies with a solid compensation benefits system, we will additionally provide consultancy service to make sure that they are aware of the importance of designing the system. In addition, even before they start to recruit job candidates in China. Because during the interview, it’s also very important to make sure the job candidates in China know how they will develop after joining the company within the next five years. 

Matthieu David: You mentioned in your presentation under your company logo, “Your Reliable Partner in China.” The word you chose may mean that there are many other headhunters in China that are not reliable. Could you tell us what is the current status of the Chinese recruitment industry? What would be an unreliable headhunter in China? What do companies have to be aware of as a company when hiring a headhunter in China? How to avoid unreliable ones?

Jenny Shi: The quality or standard of headhunters in China is not very consistent. There are bad recruiters in the Chinese recruitment industry and also, there are excellent onesIt’s the reality of this Chinese recruitment industry. This is one of the reasons why I created Uniway Recruitment three years ago because we want to make the Chinese recruitment industry to be more reliable based on my own observations in the past five years before I started my own company. For us, our definition of being available is being reliable. It’s being very accountable and committed. We follow through the whole hiring process in China from the moment we make a commitment to our clients. After we successfully place the job candidates in China, we also follow through the whole probation period of probably three to six months to make sure the placement is solid and the clients are very happy with our job candidates in China. For instance, two months ago, a French logistics client came to us saying that they’re not very happy with their existing headhunter in China because the consultant does not even evaluate the job candidates in China. They just send 50 job candidates in China without even telling them which ones are the target job candidates in China. This kind of headhunter in China does not really help the client save time and improve the efficiency of recruiting employees in China. 

That’s why we define our mission to improve the efficiency of recruiting employees in China and also save the cost for our clients. It really saves our time of replacing job candidates in China. and the cost. Our company very much focuses on the timespan as well. The shorter, the better. That’s why it requires us to spend a lot of time to really understand what our clients need. We ask a lot of questions to define before we send out a shortlist. We don’t really shortlist a lot of job candidates in China. Instead, we shortlist the most qualified job candidates in China. So, we actually close the position within only two weeks’ time for shortlisting four job candidates in China so that one of the four candidates can successfully close the bid. 

Matthieu David: For you, a headhunter in China which is not reliable will be a one that is sending too many job candidates in China without screening and wasting the time of the clients. That would be your red flag. Do you have other red flags when choosing a headhunter in China?

Jenny Shi: Some of them are not following through. I think the Chinese recruitment industry is naturally about sales. After-sales service is very important. And for us, we are focusing a lot on the quality of service, which means we place significant importance on the experiences of both job candidates in China and the clients with us through the first touch point. We make sure that we provide consultancy service to both job candidates in China and the clients during the whole hiring process in China. They are enjoying the best of professional service from us. We make sure we answer the questions to both the job candidates in China and the clients in a very professional way and they benefit from us not just from their job or from their job candidates in China, as well as the access to the information on how to prepare an interview, how to recruit candidates, and how to retain clients. 

We also give directions and suggestions to job candidates in China on how to select a job and how to select a company, which is most suitable for them. Both ways are equally important for us to make sure the job candidates in China are happy with the job and the clients are happy with the job candidates in China for long-term cooperation. For instance, because the companies are so big that they have so many consultants working on the commission-or-fee-based structure. If they are not hitting the target, the companies will wipe them out within six months’ time. A very bad experience for clients—actually, many clients have this type of feedback—is after three or six months, the person we chose is not working for the company anymore. We have to deal with another contact window. It’s kind of wasting time for the clients as well. For us, we are a boutique firm and we are very committed. We have a very stable team and we make sure the team serving our clients really well in the long term. I think this is another difference that we can make among our competitors in the Chinese recruitment industry.

Matthieu David: Do you see a risk with a company working with a headhunter in China and then this headhunter in China will actually in some way resell the profile to another competitor two years after they placed somewhere? Have you seen this practice?

Jenny Shi: This exists in the Chinese recruitment industry, but in our company, normally, the common practice is that the headhunters in China will sign a contract with the clients and they’re specifically saying a few things. 

Number one: During the hiring process in China, if we place these job candidates in China to your company, we will not shortlist the job candidates in China to another company or a competitor at the same time.

Number two, we also have a specific clause saying within a certain period of time, 2 or 3 years, we’re not going to be approaching the job candidates in China for another job. For us, we think it’s neither professional nor ethical. 

On top of that, our company actually signs an agreement with our placed job candidates in China saying you should not approach us as well within 2 years for another job. We are very strict on professionalism and we know not so many companies in the Chinese recruitment industry doing this.

Matthieu David: More and more people are choosing to be independent freelancers to work on their own or to work from home. In the U.S., the number of freelancers is very big with 36% of the workforce. The number depends on the industry though, but it’s sizable. Do you feel that the future of headhunters in China would focus more on the freelancing function that you can work with someone internalized or with a company, instead of purely recruiting employees in China? Do you have companies that want to recruit employees in China but tell you as well, “I can find a freelancer. I can find someone outside your company who is working from home?” Is it something you have seen or it’s not the case yet? 

Jenny Shi: With my observations, there are people doing this right now. It’s possible. For instance, if a consultant has been working in the Chinese recruitment industry in a very specific function for ten years, only recruiting lawyers, it’s very possible because he or she may know thousands of lawyers in the talent market in China and it’s going to be very fast for them to place the job candidate in China. If it’s freelancing, it means it’s less strict. It’s not organizational behavior. If something happens to the client, it will be very difficult for them to trace, because if the consultant is freelancing, he or she doesn’t have the proper license or register a public company. He or she even has issues with income. So, I would not really suggest professional companies to go for freelancers. It’s risky to hire freelancers. From our experience, most of our finished projects are based on very close teamwork.

Matthieu David:  The other way around is you have a client who is looking for a senior designer in their company, but actually, you find out that a job candidate in China who could fit better could be a freelancer. Does it happen sometimes that you see some job candidate in China who say, “I am happy to change my job, but I like to work from home or I like to be a freelancer?” We talk about this economy where people want to work from home and have a work-life balance. They want to be a freelancer, and then you could take your 25% commission at the same time. It would be very similar, but just the contract between your client and your candidate would be different. Is it something you have come through? 

Jenny Shi: For our business, we have not really worked with freelancers or placed any sort of freelancing position. Not yet, but we have interviewed a sizable job candidate in China, especially in designing or management positions as well as for an advertising company like Account Directors. It’s very common on their resumé, working one or two years as a freelancer their own projects. So, there is a sizable job candidate in China out there with very specific job functions and not for all the functions. The reason is we just place full-time positions. 

Matthieu David: Are there any companies or clients saying that “I’m open to having someone in my office or outside my office?”

Jenny Shi: Some companies want freelancers for specific reasons, but our response usually is we don’t do.

Matthieu David: When you explained, actually you mentioned you need a license to recruit employees in China. Do you need a license to be a headhunter in China?

Jenny Shi: The company needs a license.

Matthieu David: A specific license or it’s just the scope, a business scope? 

Jenny Shi: Of course, you need an HR license to allow you to do a recruitment business. Yes. 

Matthieu David: But it’s a business scope, right? It’s not a specific license like selling on the Internet where you need an ICP and so on. It’s in the business scope. 

Jenny Shi: It’s in the business scope. 

Matthieu David: Okay. Thank you very much, Jenny. It’s already one hour. It goes fast. And I hope you enjoyed it and I hope everyone enjoyed the talk. How did you like it? 

Jenny Shi: I will say thank you very much and I really appreciate these chats. Thank you for having me for this interview. I hope it’s going to be helpful in the entrepreneurship proposals. 

Matthieu David: I’m sure it is. Congratulations on what you did and thank you, everyone, for listening. Bye-bye. 

Jenny Shi: Bye. Thank you.

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This article Podcast transcript #36: All you need to know about recruiting employees in China is the first one to appear on Daxue Consulting - Market Research China.

Full transcript below:

MATTHIEU DAVID:  Hello, everyone. I am Matthieu David, the founder of Daxue Consulting and its podcast, China marketing podcast, China Paradigm. Today I am with Matt Conger, the co-founder of Cadence Translate, used to be named SeekPanda?

MATT CONGER:  SeekPanda, yes.

MATTHIEU DAVID:  Cadence Translate focused on the Chinese language at the beginning, now on more than 29 languages, and coordinates translation services. I started just by reading about your company. It is embedded with technology and solutions, which we are going to talk about. To people listening to us an idea of your company, you have built a committee of one or two Southern, vibrant linguists, which I’m relying on your LinkedIn profile for the information, and you raised money. That is something I’d like to know more about. Why did you raise money? Was it for some targets or its part of getting this translation service in China? I am sure anyone who is listening to us knows one of your investors, Dianping. More recently, in 2017, you raised series A or a more sizeable round of investment to finance the growth. I am trying to understand that as well. You are very focused on the financial market in China and other regions, and I would like to understand also how you came upon focusing on the translation service in China and what are the challenges of doing business in China in an industry with very demanding clients. So, thank you very much for doing this. You are currently in LA, the US? 

MATT CONGER: That’s right, yeah. Thank you for having me.

MATTHIEU DAVID: Thank you. It is 7 am in China, pretty early. So it’s a good time to talk.

MATT CONGER: Absolutely. I am looking forward to it.

MATTHIEU DAVID: So, anything I said was correct? Do you have to correct anything?

MATT CONGER: No. We’re always excited to tell our story and the stories of the clients that we see around us.

MATTHIEU DAVID: Could you tell us about the size of the company now? I read on your LinkedIn profile that you have 2500 linguists on your platform. Could you share some numbers like the size of the team, revenues, the number of clients? We got some numbers that you get several Android leads or clients every month with this network, 2400 requests a month. My own business is 80 as a start. So would you be able to share some metrics?

MATT CONGER: First of all, our company is 5 years old. Our founding date was actually this past week so happy birthday to us. We grew 75% last year in terms of revenue, and that was driven by a focus on a lot of our core clients. On average, we are doing about 1000 or so jobs per month. We can talk about what a job means a little bit later if you want. The community servicing this pool, as you mentioned, is about 2500 linguists worldwide and when we say linguists, for anyone listening out there, we are using to encompass translators, interpreters, and even transcribers, all of which don’t really call themselves linguists, but we find it’s a convenient label. In terms of the size of the employees, we have about a dozen or so in Beijing, where I started the company and used to live. We are adding more and more here in Los Angeles and hopefully soon in New York as well.

MATTHIEU DAVID: I see. Could you tell us more about the translation service in China and the US you provide? A translation service has been in the market for ages and decades. Based on what I know from you, I am sure there is something you discovered, something bigger than just translation service in China. Did you add technology or something specific? Also, when we deal with human beings, there is always something uncertain about the quality of the O2O service in China. How do you harmonize? I believe it is a lot of challenges of doing business in China. Could you tell what your solutions are to solve these challenges of doing business in China that you’ve found unsolved before your entrepreneurship in China? 

MATT CONGER: Absolutely. For us, the challenges of doing business in China we always found was our clients. They need a translation service in China for a specific business objective, which may change from month to month, from week to week or even from day to day. What our real value proposition is a search for the most knowledgeable person, potentially augmented by whatever technology is available to bring that person into your meeting. For example, every day, we estimate that there are about 5000 investor due diligence phone calls that are happening throughout the world. That’s a lot of due diligence projects that need cross-cultural communications in business, and people want to focus on what is being said without worrying about taking notes or doing ancillary market researches in China. For us, it was how we could bring a simple solution so that no matter where our clients are conducting due diligence, we can be there to help them out. I am happy to share more about that, particularly in terms of the product road map, but that’s what really got us to today was this passion and interest in the financial market in China.

MATTHIEU DAVID: I would like to know more about your technology. Have you developed your own technology or you are using technology form others?

MATT CONGER: We’re using technology from others. For example, we are doing this over Zoom, which quietly announced a few months ago that it is going to offer simultaneous interpretation as a feature on its platform. This is something that we don’t think the financial market in China is particularly well-trained to handle, so if all of a sudden all these enterprise clients had access to it, how would they use it? We looked for the best solutions that are out there. You can also apply this to the translation service in China, when we look at the amazing advances that Baidu, iFlytek, and Microsoft that are  utilizing, so we think of ourselves more as an integrator than a developer.

MATTHIEU DAVID: I strongly believe that there is a lot of value for integrators because there are so many solutions currently that can be selected. Knowing that the product has a limit is above value. We are using a lot of software, but knowing them and being able to use them is able to bring value to our clients with technology. So I fully understand that. One thing about internal organization, how do you run the matchmaking with so many people, 2500 linguists, to use your wording and one client? How do you match them to make sure it is the right person?

MATT CONGER:    Sure well, that’s our secret sauce, if you will, but it really comes down to what the client is looking for, and there are three options. They are either looking for domain expertise, for example, I am doing due diligence on the solar industry, and I want a solar expert. Or they are looking for format expertise, for example, they are having a one-hour meeting with a famous entrepreneur in China, and they want someone comfortable in that type of interview format. The third option is that they just need somebody now and don’t really care about the background. They only want speed. So what we try to provide is an understanding of which of these three dimensions, the client is zprioritizing and in the community how we score various people along those dimensions and match make accordingly. 

MATTHIEU DAVID: Does it mean that you have the software or on Excel? How do you work?

MATT CONGER: It’sSalesforce, actually. In terms of the entrepreneurship in China, we started out to build our own technology and thoughtfulness. I discovered the Salesforce ecosystem about 2 years ago, and it has provided countless improvements to our efficiency. That’s how we are able to bring on more people, zutilize dispatch algorithms, do match-making, etc. And it’s not locked in China. You know they can access it.   

MATTHIEU DAVID: Exactly, one of the solutions that are not locked. I am trying to understand why you raised money because I feel you are running a business in the financial market in China, which actually has not developed property technologies and doesn’t make up so much in investment. Where did the investment go into you?

MATT CONGER: Great question. So we actually hadn’t raised money for about two years because that was when we recognized where you are coming to. Translation service in China is a great business. You need to finance your growth, but you are not dumping money in a technology arms race against Microsoft for the translation service in China, so we raised a seed round. It was 1.1 million USD in total, and that was just about building a co-op of investors to give us credibility, to give me some mentors and some reliable sources of experience and, quite frankly, market validation. For example, some of our investors come to form the Hedge Funds world; some of the investors are diplomats. So getting that external validation has been quite nice, but you are correct. This is not a traditional venture-backed company. We focus on growing responsibly, growing profitably, and making our clients happy.

MATTHIEU DAVID: I have some questions because I have an investor in my company from another business I started before I piloted. That’s why I have this question for you. About pricing valuation in China, when you mentioned that you work for financial institutions in the financial market in China, we correlate to high prices. How do you price your service, since quality service is being high priced? Is it a product sharing model as a linguist and it is very standard, 70% for them, 30% for you? Is that the percentage? Is it discretionary and you may pitch different prices in different circumstances?

MATT CONGER: It’s a great question, and I think it’s one of the modest, but important innovations we have brought to this industry, so we price using credits. For example, a Hedge Fund comes to us, and they said, “I have these 10 calls lined up, and then I also need this prospectus translated.” We will say, “One call is one credit, and translation is this many words to a credit.” They say, “Well, how much does a credit cost?” We say, “If you just buy one, it’s this price. If you want to buy 100, it’s this price.” So we give transparency and visibility into our volume discounts. At the same time, we’re removing a lot of the per-word or per-minute charges that the translation service in China used to love because it just feels like counting pennies. I will say, as an entrepreneur in China, our original business model was profit sharing, 80/20, where we would just let the interpreters choose their own price, and then we split it. That worked well in a model, where we were going after a broader set of clients coming to our marketplace website. I am sure we both remember O2O in China was the hot buzz word three years ago. Ultimately, we didn’t find ourselves being differentiated when serving that audience in the financial market in China. We quickly grew our brand, so we needed to adopt a different pricing model.

MATTHIEU DAVID: Would you condition yourself and say you are a premium translation service in China? 

MATT CONGER: As far as I know, the most premium with regards to due diligence in the financial market in China, for sure.   

MATTHIEU DAVID: Okay, I see. 

MATT CONGER:  Which is more the reason for the name SeekPanda. We would have worked when we are trying to uphold a brand that aspires to the heights that we do. We needed something more, a little less region specific and less cute, to be honest.   

MATTHIEU DAVID: I go back to this question because I am not very clear on how you zharmonize the translation service in China. How do you make it start up that you had the same quality as one person, person A, and person B, country A and country B? I feel it is a huge work to make sure that the quality is the same across all the people you work with?

MATT CONGER: You are absolutely right and just to make that challenge of doing business in China even harder, I can share that often, the person that we are coordinating with at the client side is not even the one who needs the interpreter. It is the administrative assistant of that person or a research broker of that person, so it is a constant challenge of doing business in China. For us, I come back to a simple mantra. I want my community to understand how the financial market in China works, because I believe that if they are intellectually curious and follow the financial market in China, they will have enough context to the point when they are sitting on a call with a mutual fund out in Singapore and know the business objective of that mutual fund, or when they get called to join a call at a Japanese private equity firm with their understanding of the context that the firm needs. Now that is the aspiration. The reality is we are not there yet, in terms of getting everyone up to that common level of knowledge about the financial market in China. Our big initiative for 2019 and probably 2020 is helping increase the skills of a lot of our community. That is something that we’ll be doing very shortly, and I am quite excited about.  

MATTHIEU DAVID:  How is your vision of executing this plan to increase the skills?

MATT CONGER:  So we want to be the first translation service in China that is trying to increase the domain knowledge of our community. We are not trying to make people better translators or interpreters, but we are trying to help them better understand the financial market in China, so we are doing a call on Zoom, which had their IPO today. If I would ask 100 interpreters, how does IPO’s work? What does that mean? If you were asked to interpret for “IPO Road Show,” do you know what that means? So we intend to focus on that vocabulary and context. We are going to deliver will be some form of online learning. Perhaps you and I can chat afterward; maybe you’ve got some good tips on platforms or resources for that?   

MATTHIEU DAVID: Do you mean that you select them through a Q&A and you score them in terms of the knowledge about the financial market in China?

MATT CONGER:  That is the idea that there are people who we can tell just from their CVs that they have a very strong background in the translation service in China, but then it comes down to the domain knowledge about the financial market in China. I am a fan of your podcast. I was listening to Pauline Lahary’s interview that you did from myCVfactory. I think she has a similar aspiration of making people have their best foot forward and giving employers a kind of faster route to understanding how best to use them. That is very much our intention as well.  

MATTHIEU DAVID: I see. She’s facing a similar challenge of doing business in China. When I see your post on LinkedIn or maybe other social media, I see that you are fighting a lot for the prominent people you have or companies you have offered service to. I feel that is very, very smart marketing and it could be a very, very strong marketing tool that you offer these services for someone in the financial market in China, such as the Hedge Fund or politicians or whoever is famous. What are your marketing strategies in order to scale your business because it is like 2-400 questions per month? I understand that some clients can come every month, but I believe that you are onboarding new clients at the same time. Could you share a bit more about your marketing strategies and your client relation strategies? 

MATT CONGER:  Marketing strategy for us is simple. We want to be the brand authority when it comes to due diligence for cross-border activity in the financial market in China. To our great surprise, this was a surprisingly open space in the financial market in China. There are many firms that tell you how to do entrepreneurship in China, but they are pushing their own agenda. There are many consulting firms that help you get things done, but there’s no one as laser-focused as we are by publishing often about international due diligence in the financial market in China and we hope to be top of mind. Remember we are marketing to two audiences, our clients and linguists. On the linguist side, we try to have the same content be wrapped around messaging of this is going to make your career more lucrative and give you more interesting assignments. But it all comes down to having a content strategy to get referrals. What actions can we take to inspire someone so much that they are going to give us referrals, because it is our most profitable marketing channel in the last few years, for sure?

MATTHIEU DAVID: I see. I do try to scale this referral program through incentives, through gatherings or any methodology?

MATT CONGER: We have tried the traditional SaaS model of referring a friend and get a $100 Amazon gift card or what, but that backfired, to be honest. That doesn’t do justice to what we are trying to do, so instead, we are tracking referrals by sending them kind of small gifts. We are trying to do meet-ups whenever I travel, take folks out for dinner and those types of things in terms of referrals. I imagine it is similar to your business consulting. It is accelerated by referrals in kind of all levels.

MATTHIEU DAVID: You co-founded the company. Could you tell us a bit more about your co-founders, and how you met them, what is their origin, how you began to work together? A bit more understanding about how you began for the projects themselves in your entrepreneurship in China? 

MATT CONGER:  I came from the due diligence world, where that was my entire career up to the point when I moved to China with very little knowledge of the translation service in China. So when I landed in Beijing, I googled to see who was good at it and found a gentleman Jonathan Rechtman, who at the time was a freelancer scaling up his own reputation and doing all sorts of fascinating assignments. I pitched him on this idea of what if we can have a platform to expand the translation service in China, increase the reach of what we are trying to do, and not have to be structured as a traditional agency that, quite frankly, functions as a guild, but something a little more thoughtful. Since we are both in Beijing, we took a leap of faith together. Colloquially he knows the supply side extremely well, and I know the demand side extremely well, but the importance of having a co-founder is to understate it throughout the whole entrepreneurship in China. If Jonathan were here in LA with me, then he would be sitting right over here, but now he is based in Beijing, so he looks after a lot of our activities and partnerships from Beijing.

MATTHIEU DAVID: That’s the question I wanted to ask. I know that you have two offices in Beijing and LA. How do you manage so far the different locations? I see that you are also in New York. How do you manage all the locations, and what is your plan for all those locations within functions, sales reps, or operations? Would you mind sharing about that and this use?  

MATT CONGER:  I think first and foremost, corporate culture in global business is the most important thing to the long term success. I was very nervous when we decided to set up multiple geographies, for myself as CEO not being at the same geography as the majority of our caddies. For us, one of the core tenets is that we want to have every caddy go through the same experience, which for us is equivalent to when you join Google or Twitter, you have to code a little app before they let you into your job. So we like to have people in that match-making pilot seat that we just discussed. For example, our head of marketing has to spend three months just match-making to get some sympathy and empathy for what our clients and our other employees go through. With that in mind, we do hope to build a common culture across our offices. Now, we have made a lot of mistakes, and I am sure I am going to make several more, but that is the intention. The Beijing team has done a tremendous job of staying up overnight because we serve clients around the globe and we do not yet have folks in LA or New York to serve people in that time zone. We had some very brave people agreeing to do the overnight shift in Beijing. It was good during our entrepreneurship in China, and I am eager to transition it to something more sustainable.

MATTHIEU DAVID: How do you manage cross-cultural communications in business, like people calling you and having to stay up very late at night? How do you compensate them? How do you work on this challenge of doing business in China?

MATT CONGER: It is about trying to figure out what is a good fit for their career and then put them on a path to support that. For example, the team that is supporting our North American and South American clients are mostly Westerners, so they do aspire to take all the relationships they are building and at some point zcapitalize on those and go back to their home territories. It is also a matter of compensation. People who are hungrier and more willing to work overnight definitely get a compensation bump, but that isn’t sustainable. So it really is trying to find someone who is based in a country that might not be somewhere they want to stay long term. For example, we provide an English-speaking office that allows you to work with western clients. You just have to work overnight. It is very well for some people’s career, and we were fortunate enough to find some very talented people to fill out that team.

MATTHIEU DAVID:   How you build your corporate culture in a global business? Did you use some resources for inspiration? When we think about companies, we always think about a product and less about cross-cultural communications in business. But at the end of the day, the company is developed by people and what units people is its corporate culture in global business. Now the word ‘culture’ is more and more used in companies, and I feel more and more during my entrepreneurship in China that corporate culture in global business is at the essence or is one of the most important things in a company. Could you share more about your principals? Maybe you have some company values and how you built your corporate culture in a global business?

MATT CONGER:   As a CEO, one and the most important job of mine is to look out what inspires people to build and live a corporate culture in a global business that we all want. For us, the number one company value I will share with you is to win the referral. This is the idea that you need to spark someone’s enthusiasm for what they need, either on the supply side as a linguist or on the domain side as a client and just make them happy. On the day one, when employees join, I take them through an overview of our culture and zemphasize that that is our top value. The second thing I would mention is that you really need to find people that are intellectually curious. In Beijing, for example, we have a very diverse set of folks. This week is the Indonesian Presidential Election, and I bring that up because we have one Indonesian and two Malaysians in our team. I love the fact that they are talking about current events. Therefore, how will that affect the financial market in China and Asia and our clients? So from a culture perspective, finding people passionate about winning a referral and how the world works are what we aim to do, which is I think what makes us sustainable.  

MATTHIEU DAVID: I see. Some people say in a company, to build a vision and values, but what was your process in building that? Is it your own thinking or personality? Is it because you observe people within your teamwork career? How did you build it? From my experience, a lot of entrepreneurs in China build their values on their own personality, more than the observation of what the clients like, what the clients are looking for and what the team is working well with as values? What is your process?

MATT CONGER: I have a lot of personality traits that, I hope, won’t an impact on our culture. Instead, I try to point our team towards zorganizations whose culture I admire and connect the dots for them between the success of these companies and the corporate culture in a global business that underpins. For example, in the professional services world, there is a very competitive market known as spirit networks. There are a bunch of them in China and all over the world. We have observed that the culture of this spirit networks is very different, and you could almost predict market share changes based on, like Glassdoor reviews of these different organizations. So companies that numerically get good scores for employee satisfaction we have noticed are just capturing market share. To me, it is causation, not a correlation. 22-year-olds make up the majority of our entry-level employees. We are their first professional firm and certainly their first western one. Instead of being that the kind of the chairman giving what the vision is, I like to just point people to zorganizations that inspire me, ideally give them exposure to these organizations, and just have them emulate all of the things that we notice.   

MATTHIEU DAVID: I see. Talking about causation, what books have inspired you on your entrepreneurship in China? I think one of the topics that are very close to your topic is about remote work because so many of your linguists are working from their own location. Knowing more about how to manage remote working is certainly one topic you have looked into. Could you share some books that have inspired you during your entrepreneurship in China and more specifically, I would like to know how you conceived and thought about remote working?

MATT CONGER: To the point of zorganizations whose culture I admire, this isn’t a very beloved company, but let’s talk about ExxonMobil, this giant company. It is written about 6 years ago called ‘Private Empire,’ which talked about how an incredibly focused firm Exxon Mobil is and how it really tied to look at the future, in terms of geopolitics, economics, etc. Back from that, how do we figure out our operations to thrive in that future and to some extent? That’s what we like to do. We like to say, “AI and technology are coming. How are you going to adapt to a world where your iPhone is going to get you through 90% of business meetings, but you are going to need some solutions for the other 10%?” We look at the world where the US-China trade war is going to shift investor’s attention to different parts of the world, so how do we adapt to that? That narrative in that book really inspired me to have discipline on the organizational level and a think tank mentality of looking at the future. Now to your question about remote workers, there is no one resource that has really inspired me. I will say both our offices in LA and Beijing are in WeWork. I do think that to some extent, demographics are on our side and we are going to get more remote workers. For example, we said Cadence has a four-room studio and 20 WeWork around the world, so you can be a remote worker in Tokyo or Seoul. Whenever you have a call, you could just do it in the comfort of your nice office without having all the burdens of having an office job. That’s an experiment. That is a hypothesis, but I do think in terms of remote workers, that is the direction we want to move towards, and to some extent, we are seeing it happen already. 

MATTHIEU DAVID: Talking about the book, on the product-end point, if I am correct, I feel what you are saying is that excellently managing the company based on more macro-economic trends like geopolitics, demographics and so on. How, as a small to medium business, can you get inspired by methodologies that are used by such a big company? The correlation I see already is about the languages. Indonesia is growing on politics and certainly, a need for more translators because you are serving the financial market in China and Asia, which certainty is key for them. Could you share more and tell me if I am correct about the reasons?    

MATT CONGER: You are correct. As a global translation service in China trying to get ahead of the trends for where investor due diligence is focused on, there is also this mindset of consumption of news and trying to connect patterns. That is something that Exxon does at a massive scale, and I would like us to do at a much smaller scale. One idea of implementing what we have done is allowed people to give stock picks. If we ask people to publically say, “I really like this company. If I had $1,000,000, I would put it in this company.” This act of putting a stake in the ground and saying, “I believe in this” forces each other to question that logic or to learn from it. We have joked that we would run a kind of side investment vehicle for our employees based on their ideas. Clearly, we are not doing that, but again taking that big company mentality of looking into the future, we try to implement it at a very small scale with things like that.  

MATTHIEU DAVID: I see. To be a bit more China-specific for the end, what are the specific challenges of doing business in China you have witnessed during your entrepreneurship in China?

MATT CONGER: Well, can we do another two hours? I think it might take 2 hours to go through this. First one is talent. In a foreign country of so many ambitious, intelligent people, trying to build a pipeline of talent is challenging for a westerner. When I talked about my co-founder Jonathan, you can remember from his last name, Rechtman that he’s not Chinese. The two of us really had an uphill battle in terms of thinking how do we create a sustainable hiring process etc. Do we try to embrace some Chinese hiring methodologies, or do we try to import Western or Silicon Valley ones? The second challenge of doing business in China is about the basics of running a small business. For our western clients, the payment processing, our CRM Salesforce, and a lot of these basic issues reduce the productivity of China-based employees considerably, though no fault of their own, but there is a limited ability for us to improve that. I could go on and on, but those are the two big challenge of doing business in China.

MATTHIEU DAVID: So in China you have WFOE, you have your own company, and you also have companies in the US, I believe, right?

MATT CONGER: That’s right so the parent company is in the US and we have a China WFOE that took us a year and a half to permit it, but that’s our structure.

MATTHIEU DAVID: Talking about challenge of doing business in China as a translation service in China within the financial market in China, what do you feel it specifically more difficult to serve your clients in the financial market in China?

MATT CONGER: Great question. The number one challenge of doing business in China I would say would be compliance. By this, I mean there’s this concept of material nonpublic information. In 5000 investment calls that I mentioned earlier, the number one commandment is thou shalt not reveal material nonpublic information. For better or for worse, in China there is less respect for that concept, so it can put our einterpreters in a very awkward spot if they’re facilitating a conversation and insider information is coming out or if someone in one of these conversations solicited inside information or did something with that. For us, the biggest challenge of doing business in China is not the nuance of the language or putting the business card or the WeChat correctly, but is compliance and the respect with which we deserve to be treated.

MATTHIEU DAVID: So how do you solve this issue? Do you train people you are going to be in touch with? Do you want them before the call or before the talk is starting?

MATT CONGER: We do all that we can. We really try to look at their background and get a sense of whether they are trained in institutions that zemphasize ethics. Are they aware of what even constitutes inside information, and to what extent? Where are they in their career, such that they would understand the implications of it? We do mention that people go to jail for trading on insider information, and both in the US and in China, there are serious repercussions for obeying the compliance. But it’s an endless challenge of doing business in China, and I live in fear that it just takes one little slip-up and a whole house of cards can collapse, not just our company, but all the research brokers that are out there facilitating those 5000 phone calls. It’s something that we can only give sticks. We can’t give carrots.

MATTHIEU DAVID: It reminds me of my first business, D’Elysee, a gift box business. Inside the gift box, we were selling scuba diving, sky diving, driving a luxury car, and you can imagine how stressful it can be to make sure they have the right insurance. The Chinese insurance market is not as mature as the US or Europe, where everyone is insured. So I fully understand what you are talking about. Again to talk a bit more about China, what resources do you use to be up to date about entrepreneurship in China, and what books would you recommend?

MATT CONGER: A great question. I am going to come back to this theme of the financial market in China because I tend to look more at what the Wall Street Journal or the Financial Times is covering in China, which I completely understand is a very skewed perspective from the Western side. I try to compliment that by just asking the local team members what they are reading and trying to provoke some of those discussions. In terms of books, by the time you write a book in China, it’s out of date. It can certainly be true. One resource I will direct your listeners’ attention to is this fantastic website called Muddy Waters Research. It’s a great and provocative name, and it is a research firm that uncovers accounting fraud or just bad actors in China. They will target publically traded companies and say, “Hey, I am pretty sure you guys are cooking the books. We are going to publish our research findings on your publically.” I highly recommend reading those reports. They give a fascinating view as to how kind of the financial market in China and all of the auditors and that ecosystem come together. All the work is free, and it’s just a good name, Muddy Waters.

MATTHIEU DAVID: Focusing on China?

MATT CONGER: Yes. They may expand, but all they do is focus on Chinese companies, so it could be companies that are listed in China or Chinese companies that are listed overseas.

MATTHIEU DAVID: I see.

MATT CONGER: The fact that they write in English, but they are sanalyzing the financial market in China is really quite compelling.

MATTHIEU DAVID: I see. I have the same feeling that books about China are so quickly out of date, except about the history in China.

MATT CONGER: Sure.

MATTHIEU DAVID: It is difficult to find a good one. Thank you very much, Matt, for being with us. It was very insightful. I discovered a lot more through the interview about Cadence.

MATT CONGER: Yes, absolutely. Thank you for having me and looking forward to meeting up when we are in the same city soon.  

MATTHIEU DAVID: Yeah, hopefully, soon. Thank you. Have a good day.

MATT CONGER: Cheers. Bye.

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

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This article Podcast transcript #31: How to build an influential corporate culture in a global business is the first one to appear on Daxue Consulting - Market Research China.

Full transcript below:

MATTHIEU DAVID:  Hello, everyone. I am Matthieu David, the founder of Daxue Consulting and its China business podcast, China Paradigm. Today I am with Fabien Guerin. Am I pronouncing it right? I don’t know how to pronounce your name, actually. I am French too, but I think Guerin maybe because the English speakers like to spell. I have seen your company many times in China. I have been in China for 9 years, and I have seen the name of your company because it is a very good name to remember; Talent Fishers. So, Talent Fishers is a search company, but a bit more than this you are supporting HR services in China.  I understood within your scope that also you are doing interim management as well, that you are finding candidates in China for companies, you are supporting companies to organize their HR services in China and setting up their team.

You have had the business since 2007. It is rare to see companies staying that long in the market in China. I guess more in your industry; a bit more of an ordering industry. You may see newcomers and new leavers. So, you have been in the market for a long time, and I’d like to know in this interview as we briefed just before about the differences in China about what you see differences; west and the east and how you grow the business from 2007 until now. So thank you very much for being with us, and my first question is where is Talent fishers now in terms of size, number of offices, number of people. Could you tell us some metrics?   

FABIEN GUERIN:  Okay so Talent Fishers is as you explained it and we are tech research company, so we think it is very important to us because you want to know about what we do and how we do it and also explain the spread that we have. So we do unique offers and related HR services in China, mostly aiming at helping companies finding the right talent for their company. It can be interim solutions. Most of the time, it is permanent and very ready to actually attract and find candidates in China. There comes HR consulting, HR services in China. We can get back to this later on. We mostly focus on finding candidates in China that are mid-level we provide to also help our tee accounts if you talk about better partners in finding low-level as well because in the way we do our business, and basically we help them cover the whole of Asia so we have 6 offices; one in Shanghai Hong Kong, Singapore, Ho Chi Minh, Bangkok, and Mumbai. The idea is actually to keep on growing and keep on spreading the network to be always within the communities of talents on the ground because of cultural reasons. Our team we have got a bit less than 50 people now. Some people leave, and some people join, and that is why as well and basically….

MATTHIEU DAVID:  Sorry, I didn’t get… it can just when you said the numbers; how many people in your team?

FABIEN GUERIN:  A bit less than 50 I would say, now. I don’t have all the… because I gave a little bit of it to each of my country managers. Some of these and this is just our start-up office which is like Mumbai and years ago we sat down and rebuilt from scratch in Mumbai, so it’s actually the one is a very active activity where you make mistakes, you start over again. You are just… basically, the idea or the aim is to have 20 places in the next, like within 4 years to a real footprint on the whole of Asia. We lack a bit of expertise in the north-east of Japan and Korea, and that’s the direction we are going in, and we do more and more business in Indonesia and managed from Singapore, so we want to have a  facility in those two locations as well.

MATTHIEU DAVID:  Okay understood. About opening offices, you talked about the different offices, and I would like to go back to China because we are talking about China Paradigm. Now China as a new paradigm can impact companies in the world whatever the size, but first let’s talk about the new offices as you mentioned. How do you open a new office because you need to… do you send someone? Is there someone you identify? Is it actually open to you by chance? Is it through a plan and then you execute the plan? How have you been able to open so many offices and I am asking these questions because I think in many companies it is very costly. It is very rough on them and very costly. So how have you been managing it? 

FABIEN GUERIN:  So the first rule for me is to make sure it’s not going to be. First of all, I need to confirm with my clients, and on the ground, they are good for us, and they will be able to basically have enough business to provide more business to enable the quality of the service that we deliver in other countries. For the question, I can tell you how you should not open an office because I have done in the wrong way. When we decided to expand from China; that was on the demand of clients. The first office was built in India and Vietnam because clients were very satisfied and we were helping them in China and asked for help in other countries. So the first mistake we made was to actually work with doctors or the kind of franchised approach. We are notified all the search firms who were not doing very good, but were… one in terms of vision and the other of point of service.

The reason of their absence of success was the lack of sales or not enough sales, but very high levels of delivery and we decided actually to build are very franchise with those in those countries and wit didn’t work. It didn’t work because at some point even if you don’t like it very much; your interest goes different ways. So this is something I would not recommend.  The successful offices that we have and all our offices are doing very well and are very profitable. We have very happy people working there. Those who were not happy, we actually asked them to leave, and we onboard new people more aligned with the culture of the organization.

For each of those offices actually, I personally go and spend time on the market at the privilege of having great country managers run each of the offices, so I am not based… I am virtually based in Shanghai because that’s where I have been for the past 16 years, but basically, I don’t belong to any office. I run the organization and when I once opened a new office I just got there and confirmed the trends and the market research we’d been working on of the weeks before and then the first thing I do is I try to find somebody who is able to build the business being trained by me and the country managers to ensure that we are in harmony of service with people who belong to the Talent Fishers culture, basically. So the right person probably 

MATTHIEU DAVID:  Interesting.

FABIEN GUERIN:  And then we train them.

MATTHIEU DAVID:  Actually it is a case 3. It’s a case 3 for you on business first. Do you get local people or do you send people from your main office from Shanghai and secondly how do you interact with them at a distance? Like you say you have great country managers, but do you know they are great before they join you, or do you know they are great when you work with them? Actually, what are the parameters you have in mind for country managers; local or non-local, already experienced with you in your main office? What are the parameters you look at to make sure they are good for Talent Fishers is kept in the new office?

FABIEN GUERIN:  Okay so that’s a… I am not hiring people for skills, but really for their attitude for this rule specifically. Now that the thing is I have 7 actually because I also have a South-Asia managing director to monitor harmony of the activity in those regions, basically. I have a good idea of getting the right Talent Fishers. It is more difficult because I had to do the work of defining precisely what is our vision, why we do this job, how we want to do it and what are the regions we expect and based on this, I could identify and that is our job so we could find the right profile of attitude to actually be able to onboard on this and deliver the message. Local for us is not very important. What is really important for us is that if it is a local person we have great people in Thailand and India and Singapore who are local people.

They have a cultural background. They have been living and have grown, and they have been very open-minded, and they understand what the clients being based in the US, is based in Australia, is based in Europe means beyond the words. It is very difficult to actually understand what a client wants because most of the time they are not really sure what they want or they don’t know how to express it, and that’s very important. Once we have the right person being from whatever background, we spend a lot of time together to ensure we are in line in terms of our user metrics and that is also very involved because when you use this a few thousand kilometers away, you put a lot of trust in these people. 

MATTHIEU DAVID:  Exactly. How can you spend time with them because you are so far away?

FABIEN GUERIN:  Well, at the very beginning I spend a lot of time.

MATTHIEU DAVID:  Like, a call?

FABIEN GUERIN:  Nope. We sit together. I go there, we spend time together, and we debrief every single meeting we have and track and sign of misalignments. Of course, I take everything we can bring in the culture as well because the culture is a single thing. So, one of them actually helped build the culture, but we need to be sure and align the use and the role of clients especially in meetings or interacting with other people, and we hire staff who we can tell these people are aligned or not.

One thing that is extremely important as well is that I never look for copycats of my personality. I want somebody very different from me because I am a developer. I am not a farmer. At some point, the country manager needs to prefer to be a good hunter and also a good farmer and a good manager and a good coach, and that’s what we want as well. I have to admit I am not the best manager in the world. One one-to-one I am okay and as for the rest, again build with daily tracking measuring and so on. So I think people actually can fit in the dual and we exchange a lot. We exchange a lot over the phone, over WeChat, we share a lot, and we build a trust relationship so basically somebody who is never asking questions, somebody who is never asking for opinions from my side. For me, I am not the right person to work with this and the other way around. When I have an idea, I test the idea with them.

When I have a doubt, I check my doubts with them, but we build a relationship. I make sure that they spell it out and have a meeting together, so we have… we build a stem and a process where we basically encourage cooperation between the offices, and that’s where all the successful aspects of our business… a lot of business comes from Singapore to India. India to Thailand and Thailand to Vietnam and so on and I report that a lot. We need to talk to each other, and they cannot feel isolated, and you need to leverage your presence on these markets, and finally, we have a regular call altogether to inform about what we are doing.

Obviously, everything is centralized in the system. We have the same tools to actually monitor the activities, but mostly the success that we have within the searches, but we also talk and report and explain and discuss regularly on the phone and Zoom, and so on and finally, we meet twice a year. We have this where we sit in the bunker for 3 or 4 days altogether from 9-6 where we update the terms of our contract and everything, and we spend a lot of time together on team building, and today we have managed to build something which is quite consistent and quite fun. I make sure everybody has fun as well.    

MATTHIEU DAVID:  There is a lot to talk about in everything you have said just now. One of the things I’d like to know more is to be more specific on how do you make interactions work? You say you are regularly in contact with them. Is it every week, every month, is it every day? Do you have patterns; specific buttons or it’s a bit random and depending on the level of comfort you have with the person who is a bit more comfortable or checking in more with someone who… do you have patterns already or it is more intuitive?   

FABIEN GUERIN:  We have patterns, and we have set dates. I think one of the things that are very promising is what to think of the other people, not the country managers, but the others in the offices need to know what is going on as well. So we need to make sure that everybody is informing everybody about our successes so that they can share with their team and that they know they belong to a group. So we have region communications every week about what we are doing. We share everything; the news, good news, birthdays, or whatever activity. We ensure that together on WeChat groups that we have. We have a Mandarin group, we have a country group, and we have groups, and we also have somebody here dedicated to external and internal marketing in China who is actually sharing information with me on the social; networks and again WeChat because it is a personal tool.

Sending messages that we call Motivational Monday’s where we share good vibrations, and we make sure that everybody likes and shares this information. We do a lot of communications to cross measure anything we can actually remind everyone about it and the reasons why we do this job, which is very important to us. We have a very specific pattern about defining how we work, and that’s also for the staff. One of our mottos is that we believe and we are sure of it because we have proved this.

What we do can be either the most boring job in the world because you key in a few words, you print a resume and send it to the clients. It is a very depressing job. I wouldn’t go to the company if that was my job or we do believe that what we do is extremely important. We are not doctors, we are not lawyers, but it is important because if we do the job correctly, there is a chance to change people’s lives. Somebody is bored, unhappy and doesn’t like what he does, but when Talent Fishers is finding candidates in China for this position and this person, they actually go in an environment where it is going to be extremely motivated; the level of the skills can work well and learn.

You can have an impact on everything in his life; in his family, in his friends and at the end of the day the company was happy in delivering HR services in China and helping people in the quality that we do it. So we work a lot on making sure that everybody is aligned on that. Why do we do this job and that means it goes to how we do it, which is very different from the usual you know, talent factories.

We focus on consulting in China. So we communicate a lot internally and externally on tools for use and why and then have this processing tool and when we sense that somebody lacks a bit of motivation sometimes we go… that’s the instinct thought, and we go and spend time together either four physically or over the phone or we send others to discuss with them to ensure there is not a big issue and to re-motivate them. So, the process factor; daily WeChat communication, weekly communication internal marketing in China, and monthly team meetings online and at least twice a year altogether face-to-face working and having fun together.

MATTHIEU DAVID:  I see. It is interesting to see that WeChat is being used in companies as well in groups and so on and sharing it with a personal WeChat… which is certainly a big topic to talk about.  You said that you have internal marketing in China, and you said you have values. Will you like to mention the values because you talk about the mission which is changing lives. Would you mind talking more about the values within your company and your way of leveraging them into the internal market or what you include in internal marketing in China? Maybe it is more than values.

FABIEN GUERIN:  Again as I explained if we believe that what we do has an impact, then we don’t take ourselves too seriously, and we are not surgeons, but we cannot take our job lightly. It is very important. Clients pay us for that, and they spend a lot of time with us for that, so we need to make sure that we pay that positively in people’s lives by finding the right job and training companies to train the right people and help them to grow towards whatever ambitions they have.

So basically to do that, but it also comes the sense of responsibility. You cannot do it lightly. If you want to do it properly then you need to make sure that you care and that is one of the values and you need to demonstrate to the clients that you care by looking up actively, by demonstrating that you understand what the need is, what profiles they should look and every often part of the consulting is to help clients understand that what they think they need is not what they need or who they need.

Then often different options; you know the name Talent Fishers. That is the origin of the company. I got the name and thought, “That’s a good name.” So the name deserves a company, and then we had the work progress as well, and of course, it was an altogether type of thing. Basically, we hate to go and find the direct competitor and the sales manager in the right competition. We do it sometimes because that is what clients want and we are in the service business, delivering HR services in China, but what we love is when the clients say and we had this case again last week where the client calls me and says, “Fabien, I am looking for someone, I cannot give you a title because I am not exactly sure what the title is and the scope of the job is not exactly clear. This is what this person should do,” and then we build the job together. That is amazing, and we get strong advice and share experiences without defining the need and so brainstorming, sharing experiences a bit extremely transparent.

A lot of clients actually don’t know very well their company, and that is normal and what the market says about their company and what we call their in-shop brand. If you have a bad reputation for whatever reason you need to know, so one of our values is actually to be extremely transparent and tell the client, “This is what the market says. Based on this situation, it is going to be difficult to find the person you want.” So how do we address that?  How do we solve this issue so that we can actually find the right people to get back on our feet and actually grow the business? So the values are again, each company is different; the job is different. Being caring and being fairly reliable on the timing of the commission and the process and the deliveries that we commit to provide and the transparency; we don’t poach people from our clients.

We never lie. We believe the reason is that we listen to them. If there is a tight point in your resume, that’s a responsible candidate. We don’t poach the candidate as well. We explain to them what the job is about. We listen to them, and then we make sure that if we present the candidate, we believe he is a good candidate anyway. There is no such thing at the perfect candidate, but we present only the good candidates to stay in the long term. So based on these values, it is all about caring, transparency, ethics and that is how we communicate, and that is what we find candidates in China, our clients, and our staff, and we built a process based on that.  We make sure that we are basically… we sustain the commitment.

So we communicate every week; every Wednesday before 6 pm or if it is not before 6 pm we will be at the office, but every single week we have done it in the week for the search. Everything went well. We communicate face-to-face and the ideas we have so it’s really a popular ship where we communicate and ask questions and remind the client about what we’re supposed to do.

Again, because we don’t do this alone, we do this together. We don’t do this alone.  We need them. We need their activity, we also need to make sure they listen to what we have to reflect from the market, and everything is built internally, and we remind this… you use the tool, but you don’t know why you use the tool then it doesn’t make any sense, so we work a lot on this internally through the communication that we have, and we highlight very highly the successes is the internal newsletters, internal marketing in China. We solved it because of this, and this and we are in the right direction. This is a good example of why we do this; success and celebration and then the next one.

MATTHIEU DAVID:  Okay talking about your clients, how do you charge your clients? I feel there are some standard industries which are like 25/30% of the annual salary and here is about the region and so on. Do you have a similar way of charging? Is it different for you? How do you charge your clients?

FABIEN GUERIN:  We do research, so we offer tailor-made solutions, HR services in China so that it can be based on differences in cases, but we belong to the retained part of the basics. The reason is that we invest measurable time and energy in consulting them. Those who actually just print the resume and send it to you. We believe that what we do is very expensive and we believe that what we do is actually quite reasonable and we charge the same; 25%, 23% depending on the market. The other difference is that we ask clients to invest a little bit in us to ensure we can finish the job properly to ensure that they are included in the process and at the end of the day they have the prices which are the same.

So that is the difference between retaining and contingency and set costs, but not the same approach and not the same investment on the search provider part and that also explains why very simply the contingency search firms; they usually close between 15 and 30% of the cases they work on. We close 100% of the cases except if the client decides to stop or if the client finds candidates in China by themselves, the right candidate. Otherwise, we commit to keeping on searching. Sometimes it takes 10 days. Sometimes it takes 4 weeks. Sometimes it takes 9 months. We have a case lately where it lasted very long actually where we found the right candidate after 2 weeks.

The client made an offer, and they accepted the offer and the same day… it was this lady; this lady was asked if the company is interested and she said, “I cannot leave my company. It is too unstable.” The client wanted this. Can he stop that or always compared every single candidate to her. She was gone. She was not there anymore. It took us 9 months to find the right person. We kept working on it. The client said they have never worked with a search firm that has been so faithful to the commitment they have. They keep working with us for all things now, so that’s also, of course, we prefer to be faster, but it takes what it takes, and we keep going until we find the right people and this deserves a little bit of investment by the client to make sure that we have a partnership rather than just email resumes.

MATTHIEU DAVID:  When you say investment, is it a retainer investment or multi-retainer right that you can maybe take that from the commission or no it’s not?

FABIEN GUERIN:  That is a one-time retained.

MATTHIEU DAVID:  Okay, even if it’s lasting 9 months?

FABIEN GUERIN:  Yeah actually it is part of them… there is a bit of re-defining the research, and again most of the time it doesn’t take 9 months. It takes a very reasonable time. Not very fast, though. If it is too fast, then you don’t have to make all the quality and safety check to ensure that you actually have the reason person and there is no hidden issue. So the ideal process for us is 4-6 weeks between the moment we start and the moment we assign the candidate, but sometimes it goes much faster. Sometimes we already have a candidate in our mind when we actually sign the deal with the client because of the brainstorming and so on which is placed and sealed and went to the meeting with the resume and then we confirm with the client if they are the right profile and so 20 minutes and this is from knowing your market and advising the client.

So this one-time retainer deducted from the final fee. In some countries, actually, we do that in China, Vietnam, and India so far. We also help some of our clients in building larger teams. This is what we call recruitment process outsourcing, so basically a client either a new branch or division or new factory and they need someone who is actually acting as their staffing manager to basically run the projects from every single side and HR consulting, HR services in China, and interim planning in some ways and basically we work with them for 3 months or 6 months and then it’s a months’ period because it’s consulting fees and it’s very, very low hiring fee. So we are very flexible with some of our clients and client s also ask us to look for their Asia sales director or… they have a need. They want to work with us. We are very confident to help them then we work together, and we find a way. 

MATTHIEU DAVID:  Okay. Talking about finding candidates in China and assessing candidates; could you tell us how you run an interview? It could be for your own company. It could be for assessing a candidate for one of your clients. Do you have a process running interview? Do you go through the full resume from the time he started? Did you focus on the last experience? Do you also contact past employers to do a background check? Could you tell us more about how you assess and how you run an interview? 

FABIEN GUERIN:  I cannot tell you all. I cannot tell you everything. That is part of the multi-city that we built and the process that we built over time. Basically, different things; first of all, the attitude, what the person attended this is something that we assess very quickly in the first couple of minutes, and then we check and confirm over the interview and then you have the skills and the skills growth, you have to run through it to actually ensure that the candidate is not pretending to be able or having experience.

So basically there are a number of things, and then we ensure later on remembering the names of the authors of the books to consider and if it is inconsistent in talking about the experience you know the skills that you want to assess, and you turn around an experience, questioning about how it went, who did what, the result, the failures, the process and so on based on one experience to apply a couple of skills that you want to really assess. So it’s interviewing based on competencies through experiences, and that’s extremely strong. I never question by myself. I always have at least two of my teammates country managers to interview the candidate as well and again; the most important for me is the attitude for the client is a little bit different and also advice at least for 2 years.

MATTHIEU DAVID:  Does that mean you have 2 people interviewing one person? It is not 1 to 1. Is it from 2 to 1? 

FABIEN GUERIN:  It can be 2 to 1 or 1 to 1, but anyway I want to have at least 2 to 3 interviews with the people with different approaches. I am in favor of being very generous in dealing from ourselves in the interview. I believe that being nice and being honest and being yourself as an interviewer and as a candidate is actually the best way to actually show you who you are. You are going to hire the person for who he/she is. Not for what he/she pretends to be. So be yourself, be relaxed. That’s the main advice that I can give to the candidates; be yourself. Be yourself, tell the truth and find out if it is the right job for you as well, but one thing as well to be very nice is that the nicer you are and the better climate or the atmosphere you develop in the interview and the more relaxed people are and the more visual their flows as well. So you have everything to gain in building nice and relaxed relationships.

Of course, we need to sell the job to them. One of the biggest issues that we have had with people are talking about the finding candidates in China, but if we don’t sell the company. Good candidates have a lot of opportunities. So why should this opportunity, your company, and this job be the right job for this person and of course again, the same advice applies. Be honest, don’t oversell the company because if you are selling one place and the big and then realize that it’s actually old faith. This person is going to leave so you have wasted a lot of time, energy and money. So that is what we try to do; to make sure that the consideration is there, the transparency is there and that people choose them for the right reasons and then if you have all these ingredients, normally the candidate is going to stay for quite some time, and that’s our aim as well. We don’t want to place somebody for 6 months.    

MATTHIEU DAVID:  What is quite some time for you?

FABIEN GUERIN:  It differs in the country obviously, and that’s the culture, and it is changing. In 2007 when I started, I would have said that 2 years was a good score for China. Now I would say we are aiming for this at 3 to 5 or 2-4 years, sorry for this market because of the market evolved a lot. The candidates evolved, and that is good because China evolved basically and finding candidates in China now; what they want is, of course, good pay. In 2007 they wanted good pay, better pay and that’s normal because their pay wasn’t so very high so you cannot just grow from wanting more money. Now they want more money which is normal; they want a good job where he can have fun, where they can grow, a company they can be proud of and then a job they can be proud of, in a reasonable distance from home or basically they are normal people.

The French are the same; the Germans are the same; US citizens are the same. They want a good job, healthy, well-paid, and where they can grow, and that is why you need to build and you need to build a good value proposition for your candidates as well. A lot of clients say, “Well, nobody wants to work for me.” Of course, they don’t because they have to drive 2 hours to get there and things like health when you are right on the factory, the canteen is terrible; it’s dirty. No, you have to work… you need to be a better employer to attract people, and that’s the deal. It is a win-win proposition. You need to make sure that you respect the candidates if you want them to actually commit to helping grow your organization. 

MATTHIEU DAVID:   I’d like to actually talk more about it and before we do that, would you mind sharing a couple of questions you usually ask a candidate wither to start the interview or either to end the interview or one question you always ask or something you always do with a candidate, checking out employers or anything you always do? 

FABIEN GUERIN:  Okay. It’s not one answer. Each interview is different. There is no… each interview is, and that is why it’s fun as well.

MATTHIEU DAVID:  Perhaps scripts?

FABIEN GUERIN:  Repeating the same question over and over again, so each interview is different. Of course, you prepare based on the specific requirements from the client and everything we want to assess.  We like to know the candidate’s background respecting their privacy, but I like to know if they want to talk about it; what can they tell about their personal history and the choices they made and why they made those choices and the lessons they took from each lesson.  I don’t mind people not having a very linear story. Everybody makes mistakes or wrong choices. If you know how to articulate and if you took the lessons, that is fine.

So basically, there is not one single interview which is the same. It needs to be long enough. I don’t think that an interview shorter than 45 minutes is respectful for the person who is coming to visit you. Also it’s not enough to actually get from them actually to share what they have to share to make sure they get what is important for them and o carry on a decision on that and we talk a lot again about what their motivations are, why they wake up in the morning and again it can be… there is no wrong answer. It can be money. Why not? I have 4 girls. I know what it is to have a bit of pressure in building a family. It can be whatever reason. It can be just growing; it can be ambition. We need to know the motivations to ensure again that there is a match and that the person is going to be in the long term deal with our clients. The reference check is very different — the reference check we do automatically. We check past employers.

We have a very strong process to make sure that we talk to the right person and not the person that the candidate wants us to talk to and this is a script because this needs to be clear on facts and figures that are reasons why they left, who decided that this person had to leave, how long this say how much they were earning; the relationship with the employers and with the staff and so on. This is very fixed. For the one, to one interview or for the successful interviews and branding interviews we really make sure that each that we do is different and again that’s also one other thing; what is behind and is based on the values that we have and again understanding what the client wants us to understand. If you have an interview with me or with Matthew in South Asia or Layna or whatever; the interview is going to be different.

The questions are going to be different, and the size is going to be defense because each one is different. What is important is getting the sense that they want when finding candidates in China and making sure as well and making them realize that yes, it is a job for him if he is qualified or no, it is not a job for him. Very often we say you have an amazing resume. What you have done is very impressive, but we don’t believe this job is for you, so we are not going to present you to the client because you are probably over-qualified, for example. An overqualified candidate is not a sustainable solution for the client. So we need to really have the best interest of the candidate and the client at heart and make sure that again, it’s a win-win situation. We can change their life positively. If it’s not this guy, it is going to be the next one, and if it’s not for him, he will find another job. Maybe through us, but maybe through somebody else.     

MATTHIEU DAVID:  So I found always in the recruitment industry is that most recruitment is based on past experience and similar experience. I am recruiting this guy because he has been in telecom and my client is in telecom, but actually not at the motivation of outside the industry. When I talked with a Chinese friend of mine who now she is at the Alibaba Express. She joined when she was a graduate with very little experience; 1 or 2 years actually of experience. They bet on her with very little experience when she was working at Green Energy. How do you react to this? Most of HR director, most of the people working on the corporate side, I think less on research; they actually screen based are you the same as me? Are you the same as all companies? Did you do the same thing? Is it a concern for you as well?

FABIEN GUERIN:  I love this question because that is one of the specifics of Talent fishers. It’s one of the reasons why we are known in most of our markets, and that’s why we have over 70-75% of our business coming from client referral. We like to think out of the box, and we believe that most of the time the best candidates won’t come from the same area. We hate having to find a copy-cat. So, I will give you an example of the organization to understand it. Basically, we have been hired by a well-leading luxury organization to hire their China for e-commerce. Why did they ask us to find this person and not a company that they have actually been interacting with? Because they have heard that we are different and that we love to actually think out of the box and go and get people from other industries who can actually bring best practice in the role.

So, we’ve been there, and we tell them that. We tell them, “If you want us to go and find somebody working within e-commerce from a direct company leader we are not going to do that because it is not a good idea because, to be honest, a couple of exceptions; they are not very good. We are going to go to industries; to leading industries where e-commerce became the destructive challenge for the industry, and we are going to have to really adjust at that process to actually maintain the alignment with the core mission of the organization, but through another way.” That’s when our business gets further, and I am going to give you one of the little secrets that we have here, and I hope the company leaders are not listening too actively, but basically for each search that we have we gather the whole office in the room and again, a little bit like a bunker.

We have the person who has got the search or who is going to lead the project with the pen and the bolt, and then this person has to explain the job. Then we shoot as many questions as possible to make sure that he covered the whole process. Once this is done, each one of us for 15 minutes sends as many crazy ideas as we can. We can go into this hospitality, luxury, beauty cosmetics. What about health and we write everything down and then we reflect with it. “This is a bad idea. This is a good idea because of this and this and this.” Then we go and talk to people, and we find out who can actually bring added value to our clients and who can actually integrate or a little bit the interests and the right attitude to actually join the luxury industry. So that’s why it is difficult, that is why it is fun, that’s why we love our job because we talk to people from different backgrounds every day and we have to use our brains and scratch our heads on a daily basis.

That is why it is successful because a lot of clients are usually a bit concerned and say, “Why do you send this guy?” Trust me and meet with him and you will see. Of course, we have a briefing. Many clients need a briefing anyway.  They just call and see why. They meet with this person and either they say, “He is not the right guy, but I understand why you sent this person. It is very interesting.” Or, “Yes, amazing. I want this guy.” Now, we need to make sure this guy wants to work with them, but again this bliss briefing approach that we have is actually very powerful, and we love to move people from one industry to another. That is also one of the reasons why we are not only specialized in only one industry but HR services in China in general.  I studied running brands specialized luxury, fashion, and duty, but you always talk to the same people, and one doesn’t want to think out of the box too much because that’s how it’s done in the industry. It is turning now, but basically, our journey is actually to have these people find jobs in other industries and the other way around, and that is why it is cool, that is why it is fun, that’s why we sometimes find candidates in other countries.

In India, we have been finding candidates in the Middle East or Singapore. We also move people from one location to the other. Search is deserved a specific strategy scratching our heads, convincing the client and then once we find the candidate convincing the candidate that it is the right to move for them and further we even offer, but that is why it is fun and why we are proud of what we do. 

MATTHIEU DAVID:  I think the advantage of you talking about e-commerce and technology to ask you what technology did you use? My understanding is that LinkedIn has just the information in the industry of search and HR services in China. Glasgow is still trending the reputation of companies, and I know that some search companies are buying databases pretty much on Excel and CSV. I am not sure actually if it’s very compliant with policy now, but I know this kind of thing is existing. What is your technology, and what do you use in order to build up your resources?  

FABIEN GUERIN:  Okay the main technology to actually find people is trust and friendship, so it’s not answering your question directly, but the relationship that we build with people in their industries help these people refer candidates to us. We contact the candidate and say, “We have a job for you or we have a job that’s not for you,” but you might know somebody who is matching what we are looking for because we believe that good candidates present good candidates. So that’s the main one, but this being said, I am not sure about the technology.

Technology is evolving a lot in our industry and there are many ways of sourcing candidates depending on the country. In a couple of countries, our teams use Day Book. Usually, to find candidates in China, we don’t do that, but we use LinkedIn a lot. LinkedIn is very powerful to actually find the people you want to find. I believe that AI is going to help us shortly in pre-qualifying people.

MATTHIEU DAVID:  Do you have any existing examples? I know some companies using it.

FABIEN GUERIN:  Some companies exist, but some companies have been using it, and again I am not going to name names, but to give you an idea; we had a lot of friends not so long ago when the company specialized in this; aligned with AI recruitment asked us to find their billing director which means that… but I believe in our product, and I believe in what they do. We should not mistake what is being for this technology. To us honestly and we are very trustworthy with our clients. Finding candidates in China is not difficult. We are in 2019. Finding candidates in China is not difficult if you know how to use the search for any kind of search engine. You don’t even need LinkedIn. You just need to know the grammar of the search engine, and you are going to find anyone, you’re going to find there -mail address, you can probably find their phone number.

We are very good at searching on the web, but the question is, what do you search for and who do you search for? That is the difficult part. We have the basis that we pay for to access to people. We use a social network. We have our own tools where we recall and research and what’s important is, “Remember when we looked for this company, and we met this guy, and he was not right for them, but if I remember correctly, he is very good for this organization. What is his name again?” Then we go through everything we organized, we find in our own system all the candidates who applied, what they did and so on and the report and so on, but again sourcing; LinkedIn is very useful, and also it is very annoying because there are just so many candidates. You don’t know where to start.

So again first, who do I want to approach? What kind of profile and what kind of background and what they do and so on? Once you do that then you build it, and you go and dig in LinkedIn, Facebook or whatever tool; Internet and we have tons of professional events and directories, SIDL; the industry in Shanghai… if I am looking for people with a background in the food and beverage industry I would be a fool not having the SAL directory with me, but for people listening to us SAL is an exhibition for food and beverage in Shanghai I think every year, but typically it is physically situated in Shanghai around this month of May.

It is very interesting to go and meet. We go and meet with people, we spend time there, and we discuss and get the clients from the industry, we get to know who is actually hiring as well and that’s how we get in as well, so there are many ways being on the ground, but again we have millions and tens of millions of profiles, so the AI will help us refine a little bit in the future the pool. At the end of the day, our real job is not to get 20 resumes. It is to talk to these people and to make sure they are the right people for this specific client, for this specific project and that this project is actually the right project for this specific candidate. We welcome technology as much as we can to make our sourcing life easier, but before that strategy and after that and that’s the main part of the search job so I believe a lot of volume keyword search companies are going to die because many people can do it by themselves.  

What we do takes a bit more of experience strategy process, and again, it takes a lot of time to ensure you are putting in the right one. So, technology yes definitely, and it is going to be amazing. Very soon I am going to be able to interview and find candidates in China who are based in Dubai, but just with the AI or with VR like if we work… and that would be a great improvement as well, but I still have to talk to them. The tool is not going to tell me, “Yes, this is the right candidate, or no, it is not.”

MATTHIEU DAVID:  We talked about technology or databases to source and find candidates in China. What about assessing candidates? You talk about AI which part of it is assessing a couple of… to be more specific, some people have been using writing to analyze the writing of people. I would like to have your opinion. So some people use… I don’t know if you need Creative Index meaning that you actually tell which word corresponds to you in terms of characters and what do you think other people think of you and you click on the word which corresponds best and then they can edit a profile.  In terms of assessing; what do you think about analyzing the writing and what do you think about all the software; specific software’s if you have specific software’s?

FABIEN GUERIN:  Okay, I don’t want to hurt anybody, especially in this kind of industry. I believe it is good at some point. I think analytical writing… I remember having to find somebody by analyzing characters. It was someone in China because that is what the client wanted. What the client wants, we give, we deliver HR services in China, but we make sure that we made our opinion very clear about each candidate before. I believe that all these tools can help with Finding candidates in China and I remember assisting because I am very present in these topics as well and I remember having an event where somebody named something I don’t know if you know? It is extremely interesting because he devoted his life to AI and is building kind of a series or an Excel who is actually sending the information but organizing it.  

MATTHIEU DAVID:  Do you mind spelling his name?

FABIEN GUERIN:  RANB and then HIND, if my memory serves me right. He is a very interesting guy; very enlightened and I believe and I feel like believing in the fact that AI is extremely powerful to actually analyze patterns and you know define profiles, but what is never going to be a tool with the means that we have now is to work on the emotions in a sense of what we need to define and analyze in our job.

So yes, we can use it and we offer the property to our clients to use a couple of tools, profiles and different assessment tools that we always offer on the side and that we don’t manage it because we would be cheating because we actually put a bit of ourselves in explaining why the candidates are good, so that is just a very good way of taking what we say is confirmed by the best in the direction, but at the end of the day I believe that this will help refine the pool, but this will never help decide which one is the right one because again, there is something which is amazing which very often impacts the personal  feats.

“I want to work with you, and I don’t know why, but I am sure we are going to do a great thing together, I trust you. We can build a confident relationship, and thanks to technology, we can do a lot of things. So again moving from 20-3; maybe it was the 3 last ones on the human interactions so far with the help to decide exactly who is the right person. For the right job, for the right company and for the right boss and that is what I think.

MATTHIEU DAVID: So far, what you are saying that technology is not dawning at or is not here yet. You are still talking about the future. It is not yet here.

FABIEN GUERIN: There is some technology that is pretty okay, but not again, perfect.  So if it is not perfect then you cannot let a machine decide for you if the output is not perfect. It’s not yet perfect and it’s not going to be perfect for quite some time because of the energy it would consume to actually even deliver HR services in China. We might get there one day. I don’t think so, but we might get there one day. One thing for sure is that we need to embrace technology to make our lives easier and to make everything which is not extremely the XPI, the high priority activities; we need to outsource this to technology. Sourcing yes, refining the pool yes, providing the company through the web, yes, choosing the right ones; no, definitely not. 

MATTHIEU DAVID:  I see. It is going to be over one hour soon, but I still have two questions I really want to ask you. One question I guess is what is the difference between the west and the east in terms of recruitment; China and the west? I didn’t talk about your past experience before 2007, but I saw in your bio that you have worked in different countries. You have worked in different organizations and different countries as well. What feedback do you have in between recruitment and the difference in recruitment in China and the west? 

FABIEN GUERIN:  First of all I left the west quite some time ago, so the events of the west that I have is mostly when I go back to talk about China and Asia, but I am French as you can hear and we have a  lot of Western clients like American, European and so on. I think that what I love about China is that Chinese people are extremely smart and they evolve very quickly so when you take a generation of 25 years or more in French because of their culture, you will take 3-5 years here and not all organizations are evolving at the same time. So, there is not one China, but many China depending on the location and also of the generation we are addressing and the market as well or innovating markets. The main difference is that although Shanghai has a huge market with a huge market of people things have been evolving so fast that again you need to be creative in defining who you want to hire because most of the people you need were not on this market a few years ago.

So, that’s why they build, and the other thing is because of this lack of talent pool, and again, if you talk about digital e-commerce, tech related, AI, cybersecurity are things that we do now on a daily basis even if they existed before. So only a few people decided to choose to specialize in this. Now if you are a company, you want people with the skills and the language skills as well and the cultural affinity. There are only a few of those each time you refine the pool. Those people everybody wants them. They are extremely expensive because they know their value so what you need to do is to either pay the ticket to get those guys on board, but you never know in 12 years if they are going to change because they know their value and they can evolve or try to be creative and find somebody who has the potential and enough skills to actually grow and develop and grow with them.

In Europe what I found out and that’s my only humble opinion is that people tend to do what you mentioned before a bit too much which is to actually stick to the same industry you know the logical path. I’ve been doing a business school, and then I worked for one of the big 4 and then this and this, and they all have the same track record. It is boring. It is not a very good source of innovation, but that is how it works and since has worked very well there. Here it’s not like that. You need to be open-minded and try and dig in each and everyone’s profile. What is going to be valuable for your organization and it’s more important, so you can try biography, history, social ecology and then end up being one of the experts.   

MATTHIEU DAVID:  Europe is actually known to stick to one nature and then one job and so on where in the UK or the US you make it a little bit fun and like 2 years after even if you don’t have any mathematical background. I have got it. One last question: you mentioned before we started the interview that you are working for some Chinese companies, but the Chinese companies you are working for it is mainly to recruit and to recruit in Asia, but overseas not really within China. Could you tell us more about what you… why they choose you, and what do you see among Chinese clients?

FABIEN GUERIN:  Okay so first the main reason why we don’t; work so much for Chinese companies in China is that we would not be very humble to explain to Chinese how to hire Chinese in China, but most of the clients that we work with our international environment backgrounds so we have been working with the US and West German companies entering the Chinese market and we have to breach the cultures and our expertise were the recruitment process, the ability to think over and over and research to find the right match and also to advise on what is source specific in the Chinese market and to find candidates in China that can work in foreign environment besides the language skills. 

So a lot of people amazing English, but actually don’t understand the culture and because most of the companies have their own culture, they need to localize it, but they cannot forget about so we need to find people who can match that. So Chinese companies in Chinese markets and Chinese candidates; we don’t have the real added value. Now if they want to work with us in Vietnam, or Cairo or in India is the best example. India and China are… it is the most fun and erratic mix that you can have and to handle them very carefully, and then you need to… we know the Chinese markets, and we know the Chinese culture, so we need to help Indian based candidates; it can be Chinese, can be western to understand how they can match with the culture and advise the Chinese client on what is specified on the Indian culture and they have to take into consideration.

You don’t do it in India and say I don’t care about the Indian culture. You have to deal with it. So our journey is also to make sure we can mix. We have Chinese consultants obviously, and we have also been living in China for 11 years. We know the Chinese culture so we can help them reach the culture and again, China, as you know, invests a lot in the whole of Asia and the whole of the world.

One of the weaknesses or one of the things I fear is not right with a lot of companies; they do searches from Singapore, you know in Singapore, and then you deal with the searches in Vietnam, in Thailand. No, it’s not the same market. How can you understand what these people need? So you have to have deals on the ground. So we breach that and we have people talk to each other who can advise the client on the other side of the search in the markets and that’s what they like a lot again being able to communicate on what they want to achieve and to be advised on what has to be taken into consideration to find candidates in China, the right candidate.       

MATTHIEU DAVID:  One last question: I am interested in having your views on this. If I am a candidate and I want to work for a Chinese company. I talked to your graduates from business schools, and they said I want to work for a Chinese company. It is pretty new for me to hear that because tech companies are formed in China now, the south and the US. What would you advise them to consider to be aware of, to be careful of? It could be a French graduate; it could be someone with a much higher position. What do you see in the market that they have to be aware of?

I have in mind that some international profiles have been hired by Chinese companies like 5 or 6 years ago where some Chinese companies have them in their team in the sense that they were asking for immediate results. If you don’t sell, it’s not with the strategy. It’s not what we want. We want sales. We want effective results. I feel that one of the dangers I see for someone who wants to work for a Chinese company. What is your feedback?

FABIEN GUERIN:  First of all I think that it can be a very good idea and it gives you a very strong company advantage to hold people in the market because if you work successfully or for long enough in a Chinese organization, you are going to know China much better than others. If your job is to know about China and how Chinese organize, then that’s a very good idea. You need to be ready and organized, and you need to know what they expect from you. You need to really put the pressure for as much transparency for the people to know what they want, what is going to be your job and what you are supposed to deliver (HR services in China) and when and then you need to change something.

This is what I have with my kids sometimes when we go on a ride because the older one is 12 years old, and she was born in China, and I explained to her that I have different operating systems that she does and her Chinese friends or I have a different operating system as well which means that every single information we receive is processed in a different way. I stuck to my French normal operating system when I lived in China I mean the burnout in 2 weeks because it doesn’t work. I need to reset my priorities. We need to embrace and discover how things work here, analyze, and take the best out of it. That is when you take away from this China basic experience, but of course, it is not easy, so you need to be stretch resistant, and you need to be extremely open-minded.

Now I think it is easier when you graduate than when you are on the sea level and when you usually have very specific, strict expectations from you and usually, there is a misalignment on what you want to adopt and not ready to think not because they are not good. Chinese prove that every year that they are extremely good.

They can be very innovative, and they redesign other ways of doing business. It is just that the processes are not the same, and the operating systems are not the same. So you need to actually again, be ready to discover the reasons of doing things that you wouldn’t even imagine and interact with people in very different ways if you do that and spend two or three years and out of the best candidates you have ever seen and those were actually spent three years working in the factory and now most of them actually don’t last very long, so you have to be ready.

It is tough, and one thing as well, which is extremely important is that if you want to work back in Chinese companies or foreign companies don’t embrace the whole China system. Keep a bit of connection otherwise you are going to work with Chinese which is a good thing, but if it is not what you want, and at some point, you want to go back to the west make sure you take the balance in your private life and on the social activates with western people as well.

MATTHIEU DAVID:  Thank you very much. It is for more than 1 hour. I hope it wasn’t too long for you and making you late. Thank you very much for all your sharing in China Paradigm. Congratulations on everything you have achieved. I just realized that it is a cycle. You past 12 years of your company so you did all the annual science or Chinese science. Thank you very much, and I hope you enjoyed it. Thank you, everyone, for listening to this new episode of our China business podcast and see you soon.

FABIEN GUERIN:  Thank you.

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

Do not hesitate to reach out our project managers at dx@daxue-consulting.com to get all answers to your questions

This article Podcast transcript #35: Adapted and tailor-made HR services in China is the first one to appear on Daxue Consulting - Market Research China.

Highlights of this episode include:

• Tools used in China for recruitment
• Is 9-9-6 really a standard in China?
• How do you build your own database of candidates?
• How to analyze a candidates personality?
• Tips on recruiting in China
• The effect of remote work on the industry, and the future of headhunting

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

Make the new economic China Paradigm positive leverage for your business

Do not hesitate to reach out our project managers at dx@daxue-consulting.com to get all answers to your questions

This article [Podcast] China Paradigm 36: How to run a headhunting company in China is the first one to appear on Daxue Consulting - Market Research China.

Highlights of this episode include:

• Parameters for finding the right employees in overseas office locations
• How to make cross-border communication with a team go smoothly
• What do candidates in Asia want in a job?
• Differences between recruitment in the East vs West
• What should foreigners looing to work at Chinese companies consider?

China paradigm is a China business podcast sponsored by Daxue Consulting where we interview successful entrepreneurs about their businesses in China. You can access all available episodes from the China paradigm Youtube page.

Make the new economic China Paradigm positive leverage for your business

Do not hesitate to reach out our project managers at dx@daxue-consulting.com to get all answers to your questions

This article [Podcast] China Paradigm 35: How to hire the right employees in Asia is the first one to appear on Daxue Consulting - Market Research China.