Managing Director, Norther & Eastern China
MICHAEL PAGE INTERNATIONAL
2010-02-01, China International Business (CIB) www.cibmagazine.com.cn
By Mina Choi | From CIB February 2010 Print & Web Edition
FACE TO FACE INTERVIEW
POSITION: Managing director, Northern and Eastern China, Michael Page International
EDUCATION: BA German and French, University of Birmingham, UK
WHAT'S IN HIS POCKET: Passport, Mulberry wallet, Blackberry, ID badge, key chain
When British-born Andy Bentote joined Michael Page International, one of the world's leading recruitment agencies, straight out of university in 1994, he had to shrug off unfriendly comments from his family about not being in a "real" industry. The company, started above a London laundromat in 1976 and now traded on the London Stock Exchange, was part of an industry that few understood the need for. Yet, looking out over the bustling Shanghai business district on Nanjing Road from his office 15 years later, Bentote has no doubts about the importance of his industry and the growing position of Michael Page International within it: the company has grown from 20 offices in 1994, to an international powerhouse with more than 140 offices worldwide today.
However, the market was not kind in 2009 and since Bentote arrived in Shanghai in March 2009 as the managing director of the Northern and Eastern China division the business has been uneven at best, with Michael Page International announcing an almost unprecedented drop of 36.4% in annual gross profit for the year. But, with a huge upturn in the fourth quarter of 2009, a cautious smile has returned to Bentote's face.
Bentote sat down with CIB in his Shanghai office to discuss, among other things, the challenges of finding a good candidate and why getting an MBA is not so important in China.
What is the state of the job market and is it really better in China than elsewhere?
I definitely think so. It's the only region in the world that demonstrated resilience over the summer [of 2009]. We noticed things getting better last year. The recovery started out in Singapore, then moved to Hong Kong. Late in September and October we noticed it in Shanghai, and finally we saw it in Beijing as of January this year.
Why did the recovery start out in Singapore?
I'm not really an expert, but it seems that overall the recovery started in South Asia and came up. Developed economies [like Singapore] dropped a lot so they picked up much more once the market climate changed.
How does this compare to other markets?
Right now the UK is okay, but is pretty flat in terms of growth and it seems that China is coming out of the recession very quickly. The US and China are two key markets for Michael Page post recession, so, for us, China's recovery is exciting because Michael Page has a relatively small presence relative to the size of the market in both these countries.
The phrase at the moment is ‘cautious optimism.' The number of inquiries and available jobs has gone up in the last few months. Many job openings that had been put on hold a year ago have come back on. We had more inquiries from our international offices in the fourth quarter of last year than the previous nine months combined. So we think that, in the last quarter, confidence picked up and companies that were afraid to sign on the dotted line are willing to now. We're getting more optimistic every week.
Can you talk about some of the overall trends you've been seeing in terms of job openings and candidate types?
We mostly work with multinational companies; although we do some work with local companies and hope that this will evolve and change as we start to do more business with local sectors in the future. Generally, the market has improved across all sectors in China, but if I were to name a sector that has been doing much better than others, it would be Fast Moving Consumer Goods (low cost food and cosmetic items) and retail.
Chinese people love to shop and shops have fared better than some of the other businesses. What this translates into in terms of job openings is that many property developers and retail chains are looking for expansion managers for their retail businesses and property developments.
One trend we are noticing is that now the [company's] head office will increasingly want to be involved in the final stages of the interview. Candidates will often be flown overseas and, to us, that demonstrates how important the China market has become to our clients.
Are there much better job candidates entering the market?
Not necessarily. During the recession most companies cut back, but they really cut out the bottom 10-20% of underperformers. Companies work hard to look after their best employees. As the economy is picking up, these companies might have to further convince the top employees to buy into what they are doing and demonstrate that they have a very well-developed career path. But overall China has been a hard place to find a good candidate.
What is the make up of your target job seekers?
A vast majority of our clients are looking to localize. So for Michael Page International I would say that 95% of the roles we fill are local hires.
Are the days of the decadent expat packages now over in China?
In terms of expatriates being hired, we don't tend to handle them as they are generally hired internally. By that I mean that most top expats are brought in from the head office or another country to oversee China businesses because they know the business and can continue the company culture. We do get a lot of calls from expatriate candidates, but we find that it's very difficult to help them.
The top, top guys still get packages that pay for [children's] schooling, cars with drivers, housing etc, but many companies are only offering half-pat packages that offer some benefits such as housing and car.
There's also a huge change in that there are many expats who enjoy living in China and want to stay after their current job has ended. For those candidates we have to ask two questions: 1) How good is your Putonghua? (the Chinese Mandarin dialect) 2) Are they flexible with the benefits package?
You stress the importance of Putonghua and yet only arrived in China to head up the Shanghai office in March 2009. What is your Chinese level?
I studied Chinese for two months before coming to China and now have lessons every week. I think it is vital that any expat and business leader show a commitment to learning the language. It is tough, but I studied French and German at university so languages are in my blood.
Has there been a big change in the managerial job market from,
say, five years ago?
It has changed. I wouldn't say it's a dramatic change, but more of
a gradual one. Over the last four or five years, many companies made
a decision to localize their personnel and replace the expatriates to
Moving forward, however, as companies look to expand again, can they really find the talent locally? We have found that the supply of local talent at a managerial level is improving. Generally, if it's a purely China role, it's difficult to find people but it's possible. But if it's an Asia role or an Asia/Pacific role then finding people with that broader experience is much more difficult. As companies relocate their headquarters to somewhere like Shanghai, to demonstrate China's importance, they are looking for regional managers who are also local, and it becomes very difficult to find these candidates. That's where perhaps an expat from Hong Kong, Singapore or Malaysia will be a better candidate.
How about returnees? Have you seen an upturn in the number of returnees?
We've seen about 25% increase in the last six months. Returnees are well-educated and often have experience with multinationals, but many of them don't have strong China experience. They often want to return as expats, but my advice to them would be, be as flexible as possible.
How about China as a hardship post? Has that changed?
China has become significantly less of a hardship posting. For some of the less desirable cities there might be a better package offered, but on the whole, for the second and third-tier cities, companies are looking to hire local people who are from that city.
With the proliferation of MBA and EMBA programs in China, how important are post graduate qualifications?
Very few of our clients ever say that they are looking for someone with an MBA. Our clients are looking for people with experience. An MBA is not valuable without practical experience. It is a useful degree if you have practical experience and it does add value, but an MBA alone is not enough to get a job.
What sort of processes do you go through to evaluate job candidates
for your clients?
We interview all our candidates here in Chinese. We are also very careful to check information on our candidates' CVs and use [an outside] company to run background checks.
What has changed in the last few years, if anything?
Loyalty has become more important. Eighteen months ago no one had any qualms about leaving a job. That is changing. Companies are getting very fussy about candidates and want people who will contribute to the business and have a track record of staying two-three years at one place. The recession has made candidates more realistic about annual pay rises and they too are seeking stability over a higher compensation package. How long will this last? Everybody out there is wondering when the war for talent will start again.
Why is it so difficult to find good candidates?
It's simply supply and demand. From 2003 to 2008, China had a lot of opportunities for top candidates. Then in 2009 the market became client-driven. I think in 2010 we will see more of a balance between the two. When the market is candidate-driven, it is good for us.
Have you noticed an upswing in the number of foreigners looking to find jobs in China?
I've noticed a rise of applications from foreigners. But, again, the questions are ‘do you have experience' and ‘can you speak Putonghua?'
In recent times how have pay and compensation packages changed for local recruits?
Anecdotally, the pay rise has been about 10% per annum, and that would be just within the same company – it is much more if a person was moving companies. This year it's more modest. I would say it's about 5%. Candidates are more realistic now. Still, we wonder whether we'll get back to those days again when candidates were demanding much more.
Can you describe the ideal job candidate? The type of person who would be hired in two-seconds flat with dozens of companies vying for their signature.
I'll give you several hot, key candidates that are in demand at the moment. The first one would be a good quality financial controller. This person would have some management role with international company experience, with ideally some overseas exposure – like having worked for an international business. This person can expect to make RMB 50-60,000 a month.
A second candidate would be a marketing manager. Again, someone who has worked with international big brands and names. This person can expect to make about RMB 40-50,000 a month. A third candidate would be someone with LEAN manufacturing experience, a qualified manager who's worked at an international management level. While a fourth candidate would be a quality expansion manager for retailers and developers. He or she can expect to make about RMB 30,000 a month or above. Roles much more in demand than before are internal auditors and quality-control managers.
Recruitment is a highly competitive field. How do you compete?
First of all, we don't do headhunting at Michael Page. We never cold call anyone. We have a database of candidates we maintain and once someone has entered our database, we keep track of them, but Michael Page is solely a recruitment company.
As a recruitment company we compete by training the best people in our own offices, giving them day-to-day training which translates into the best service levels for our clients and our candidates. This is the way we can attract the best candidates.
Has the fee structure changed for your business?
No, not really. The industry standard fee is 25-30% of the first year's salary.
Are there any unique elements to running a recruitment business
There aren't any elements unique to China, but there are some things
that tend to happen more often in China than elsewhere and these are
loyalty and integrity issues. Candidates might accept a job and join
a company, but suddenly change their mind at the last minute.
To deal with these issues, we at Michael Page try to keep in contact with the candidates throughout the process. We also do a careful reference check, background check and qualification check. We often get a situation where on Wednesday a candidate is happy, and then by Friday the candidate doesn't want to start the job that is to begin on Monday. These situations happen with more frequency here in China.
How do you deal with this?
Obviously it affects the way we look at these candidates in the future. We also offer our client companies a two-month guarantee; that we will replace all [no-show] candidates within a two-month period free of charge.
How about language-skills? You mentioned that Chinese proficiency is now absolutely necessary for top-level job candidates.
There are very few management jobs for foreigners who speak no Putonghua. It doesn't have to be perfect, but you have to be able to speak it conversationally and at least show that you're trying to learn it.
How important are English language skills?
English is very, very important. It's a basic requirement. There are cases where French or German might be helpful because of the company hiring, but for any professional management position, English is a key skill. Recently we've also been seeing a demand for local dialects. For example, we now have roles open for those who speak Shanghainese, for managers who need to oversee a manufacturing company or a supply chain where the local team mostly speaks Shanghainese.
How do you find suitable candidates?
We rely on word-of-mouth. If we give our people good service then that person will often recommend a friend or two. In China, we have a website that works very well for us for candidate-generation. We do advertise on some of the Internet job search sites, but we take out very few ads in magazines or any other medium. A vast majority of our candidates come through our website so we spend a lot of time inspecting and managing our website traffic.
What advice would you give today's job seekers?
Be very well-prepared for the interview. Know your experience and be able to sell it and your achievements during the interview. Be realistic on the salary expectations, and remember that the best jobs are always competitive.