China's executive search companies will have to withstand more cutthroat competition when foreign counterparts enter the domestic employment market.
The Ministry of Personnel recently issued "Regulations and Rules of Administration of the Employment Market," approving operation of joint executive search companies in this country.
By adopting the form of joint ventures, the government intends to give a shot in the arm to this fledgling sector.
To gain the upper hand over their foreign partners, domestic headhunter companies will have to launch bold reforms in both management and mindset. If they could face up to foreign competitors, they would have ample opportunities to survive the competition and come out performing even better.
Headhunters came into being in the past decade following the introduction of the reform and opening up policy more than 20 years ago and helped change the low mobility of talented people.
Before reform and opening up, managers of State-owned enterprises were appointed by superior administrative departments, and people never thought of changing jobs, even those not suitable for them.
But the country's economic reform has exposed enterprises to fierce competition and driven them to seek more qualified managerial personnel. Domestic headhunter companies arose from this demand.
Due to the lack of professional experience and backward management, domestic executive search companies have lagged far behind the international level.
Domestic executive companies can fall in two groups: State-run personnel exchange centres and private executive search companies.
Since the State-run centres are authorized to keep a personnel dossier and issue letters of recommendation, employers and job seekers have to ask them for help.
This makes the State-run centres fail to feel the urgency of actively exploring the market and trying hard to meet market demand.
Disadvantages the private companies suffer from include insufficient funds and a poor talent bank.
Insufficient funds cannot ensure the thorough investigation of clients' requirements. And poor talent banks means there are no guarantees that appropriate candidates will be recommended. Once clients do not get satisfactory service, they won't go back for help.
Under this scenario, admitting foreign executive search companies into the Chinese employment market will undoubtedly put great pressure on this infantile industry, experts said.
But an upbeat voice also can be heard from many.
"We should not be afraid of the upcoming competition since both domestic and foreign headhunter companies have advantages of their own," said Wang Tongxun, deputy director of the Chinese Academy of Personnel Science under the Ministry of Personnel.
Foreign headhunters have abundant capital, advanced management and rich professional experiences. They know how to analyze their clients' requirements and then recommend the proper candidates to promising employers.
Domestic companies also have their own advantages: They are acquainted with the Chinese culture, basic conditions and Chinese people's psychology.
"Localization is a task many international companies should tackle when preparing to enter Chinese market," Wang said. "A foreign headhunter company is not an exception. It also is in need of senior personnel who know China very well."
The target markets of the foreign and domestic executive companies are different.
Foreign headhunters scout out talented people for international enterprises, while domestic headhunter companies can supply services to home-grown enterprises of all sizes.
After talents leave domestic enterprises with the help of the foreign headhunter companies, their positions need to be filled.
"We can do this job; those domestic enterprises will be our clients," a headhunter in Shanghai told the Economic Observer.
In a bid to meet the challenge head-on, domestic headhunters should improve the quality of their services, conduct careful research about the client's job request, establish a complete talent bank and recommend only the most qualified candidates.
At the same time, "we should learn the rich professional experiences and advanced management modes from the foreign companies," Wang said.
The State-run personnel exchange centres should tap market potential and do research on market demand.
"After all, they are 'hunters,' and cannot wait for 'prey' at home," Wang said.
Private headhunter companies also should standardize their operations and enrich their talent bank. Doing so will help them establish a solid professional reputation.
"We should publicize our famous brand to let people know about us and trust us," said Wang Changjiang, manager of Haozhu, a famous Beijing-based private headhunter company.
As the competition unfolds, domestic talented personnel may be the biggest winners. With the help of headhunter companies both at home and abroad, they know their value more clearly and can seek more suitable positions.