2016 China’s Executive Search Industry in ChinaIntroduction: Executive Search Industry in China Definition ... Executive Search services was first introduced in China in 1992 and

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2016 China’s Executive Search

Industry in China

2

Introduction: Executive Search Industry in China

1

Current Status of Executive Search Industry in China 2

Analysis of Executive Search Services in China 3

4 Executive Search Industry Trends in China

3

Introduction: Executive Search Industry in China

Definition

【 Executive Search Services】

Specialized recruitment, also known as executive search, supplies a series of services identifying top talents for clients.

This includes consultancy, search, selection, assessment, recommendation and employment assistance. Top talents

refers to senior levels, executive jobs, or other scarce talents, who are well-qualified with annual salaries above

RMB800,000.

Executive

Search

Services

HR Services

Recruitment

Services

HR Services: Provide employment services, career

opportunities for candidates and also HR related

services for employers..

Recruitment Service: Identify the availability of

suitable and qualified candidates in the market for

employers.

Executive Search Services: Search, screen,

identify and provide recommendations of top

senior talents for employers with high levels

of professionalism and confidentiality.

Source: Publicly available material.

©October 2016, iResearch Global Group www.iresearchchina.com

4

Executive Search Industry in China

Types of Assignments and Specialization

Retained Search Upon contractual agreement,

headhunters would normally charge an

upfront fee of 30% before conducting

the search. Another 30% is paid during

the search, and the remaining balance

is received when the assignment is

completed.

This method is more prevalent

in China. Headhunters usually

charge 20%-25% of the annual

salary of a candidate upon

completion.

Specialization by industry Provide search services

according to industry practice

groups. This is a growing

trend in executive search

businesses in China.

Specialization by Function Provide search services

according to the function of the

role, such as Sales &

Marketing, Finance,

Operations, etc.



Contingency Search

5

1) Chinese and foreign investors should both be a talent agency which

has been established for at least 3 years; 2) Registered capital

should be no less than $300,000, with foreign investor holding at least

25% and Chinese investor holding at least 51%

Interim Regulations on Administration of Sino-foreign Joint Venture Talent Agency

Employment agencies are subject to administrative licensing system

Regulations on Employment Service and Employment Management

Supplementary Provisions to Interim Regulations on Administration of Sino-foreign

Joint Venture Talent Agency

The provision about shareholding structure does not apply to Sino-

foreign joint venture talent agencies set up by Hong Kong and Macao

investors in Mainland China

Provisions on Talent Market Management (the second revision )

Regulations on qualifications, conditions, flow and requirements of

executive search service

Conditions of setting up an employment agency: 1) at least 5 full-time staff

with college or above degree and talent service qualification certificate; 2)

complete and feasible corporate regulations

Specification for Executive Search Service

2003

2007

2010

2015

2007

Policies & Requirements for Executive Search

Services in China

Low Requirements for Market Access and Relatively Flexible Regulations



6

Executive Search Industry and China’s Economy

Steady Increase of Employment Amid Moderate Growth of Economy

China’s GDP increased to 67.7 trillion Yuan in 2015 and although China’s economy keeps growing on the whole, the

growth rate has declined gradually. With a moderate growth rate in GDP, the employment population has also increased

steadily.

Source: GDP and employment data come from the official website of National Bureau of Statistics.


48.4 53.4

58.8 63.6

67.7

9.5% 7.7% 7.7% 7.7% 6.9%

2011 2012 2013 2014 2015

China’s GDP and Actual Growth 2011-2015

GDP (tn Yuan) Growth rate (%)

12.2 12.7 13.1 13.2 13.1

3.7% 3.5% 0.9% -0.8%

2011 2012 2013 2014 2015

The Number of Newly-Employed Population and Growth 2011-2015

Newly-employed population (mn) Growth rate (%)

7

Expansion of Tertiary Industry Encourages Flow of Talents

Tertiary industry is gradually becoming the leading industry of China. Along with variations in the economic structure,

changes in the organizational structure, the accelerated flow of talents is undoubtedly favorable to the development of

executive search service industry.

Source: 1978-2014 data comes from the official website of the National Bureau of Statistics. 2015 data are collected from Statistical Communique of

The People's Republic of China on the 2015 National Economic and Social Development.


Executive Search Services and China’s Economy

27.9% 32.8%

25.4% 19.4% 17.2%

12.4% 10.3% 9.4% 9.2% 9.0%

47.6% 44.1%

43.4% 46.1%

45.7% 45.5% 46.8%

43.7% 42.7% 40.5%

24.5% 23.1% 31.2% 34.5% 37.1%

42.1% 42.9% 46.9% 48.1% 50.5%

1978 1983 1988 1993 1998 2003 2008 2013 2014 2015

Contribution of Three Major Industries to China’s GDP 1978-2016

Primary industry (%) Secondary industry (%) Tertiary industry (%)

8


Large Numbers of Startup companies Brings New Vitality to the Market

The entrepreneurial boom has generated large numbers of SMEs which has caused an escalation in the demand for

senior talents and creating business opportunities for executive search industry.

Source: Number of enterprises and newly-established enterprises come from the official website of State Administration of Industry and Commerce.


2.0 2.0

2.5

3.7

4.4

-2.0% 27.6% 45.9% 21.6%

2011 2012 2013 2014 2015

The Number of Newly-registered Enterprises in China 2011-2015

Newly-registered enterprises (mn) Growth rate (%)

12.5 13.7

15.3

18.2

21.9

9.1% 11.8% 19.1% 20.1%

2011 2012 2013 2014 2015

Number of Enterprises in China 2011-2015

The number of enterprises (mn) Growth rate (%)

9


“Internet +” Model Generates Great Demand for Senior Talents

“Internet +” Model is a growing strategic trend as everyday objects connects to the internet. The combination of digital

network with various industries generates tremendous demand for new talents and roles in order to cope with the rapid

development in this sector.

Source: GDP data comes from the database of the World Bank and data about China’s Internet economy are provided by iResearch.


2012 2013 2014 2015

Growth of China’s Internet Economy in GDP and America’s GDP 2012-2015

Growth of China’s internet economy (%)

Growth of China’s GDP (%)

Growth of America’s GDP (%)

763.8

1124.6

1579.0

2135.3

2709.8

44.9% 47.2% 40.4% 35.2% 26.9%

2014 2015 2016e 2017e 2018e

China’s Internet Economy Revenue and Growth 2014-2018

Internet economy revenue (bn Yuan)

Growth rate (%)

10

Social Environment for Executive Search Services

in China

Talent Quality Becomes the Driving Force for Economic Development With

Gradual Fading of Demographic Dividend

In the past, China’s economic growth mainly relied on the large population. At present, while the demographic dividend is

fading, the quality of the labor force becomes the impetus for economic development. Enterprises’ scramble for limited

human resources will be more intensified and the demand for senior talent will keep growing.

Source: Department of Economic and Social Affairs of UN, https: //esa.un.org/unpd/wpp/Download/Standard/Population/.


63.4%

80.7%

34.5%

85.6%

0%

20%

40%

60%

80%

100%

1950 1960 1970 1980 1990 2000 2010 2020e 2030e 2040e 2050e 2060e 2070e 2080e 2090e 2100e

Population Structure and Dependency Ratio of China 1950-2100

0-14 years old (%) 15-64 years old (%) Above 65 years old (%) Dependency ratio (%)

11

Profile of Executive Search Services in China 1

2

3

4

Current Status of Executive Search Services in China

Analysis of Executive Search Services in China

Executive Search Industry Trends in China

12

China’s Executive Search industry developed in three stages: the initial stage, development stage and expansion stage.

Executive Search services was first introduced in China in 1992 and till 1996, this was the initial stage. From 1996 to

2003, this was in the development stage, and from 2004 until the present, it has been in the expansion stage.

History of China’s Executive Search Industry

The Beginnings of Executive Search in China


©November 2016 iResearch Global Group www.iresearchchina.com

1992 The beginnings of executive

search industry in China

In 1992, a Singaporean company,

Shenyang Weiyong Technology

Company set up the first

professional executive search

company in China. The industry

entered the initial stage.

1996 Favorable policies for

development

Thanks to favorable policies and

higher acceptance in the market,

many investors rushed to enter

the industry, resulting in a rapid

increase in the number and

scale of executive search firms.

The industry entered the

development stage

2004 Boom of the industry

Fast economic development in

China brought new vigor and

vitality into the industry allowing the

expansion of vast numbers of

executive search firms across a

greater geographical coverage.

The industry entered the

expansion stage.

13

Periodicity of China’s Executive Search Industry

Affected by Macro-economy, Development of Executive Search Industry Shows

Periodic Features The executive search industry is a business with the basis of searching senior talents according to the client’s needs.

Company’s performance is heavily dependent on the economy, which in turn affect the demand for senior talents. With

this association, the development of the executive search industry would show periodic features according to the macro

economy.

Source: Revenue of global headhunting industry is from AESC Executive Talent Report 2020, and global GDP data is from World Bank


-40.0%

-20.0%

0.0%

20.0%

40.0%

1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

GDP Growth of Major Countries in the World and Growth of Global Executive Search Industry 1993-2015

1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 2015

-20%

20%

China (%)

USA (%)

UK (%)

Global (%)

14

Executive Search Companies are concentrated in

tier-1 cities such as Beijing, Shanghai, Guangzhou

and Shenzhen. Supported by the government with

changes in national policies and high-tech

development zones in recent years, second- and

third-tier cities started to penetrate the markets in

Chengdu, Suzhou, Hangzhou, etc.



Beijing

Shanghai Suzhou

Hangzhou

Guangzhou

Shenzhen

Chengdu

High Concentration in First-tier Cities And Rapid Penetration in Second- and

Third-tier Cities

Regional Features of China’s Executive Search

Industry

High Concentration in Tier-1 Cities

Shanghai Beijing Guangzhou

& Shenzhen

15

Industry Chain of China’s Executive Search

Companies

Social networking

Headhunting Service

Recruitment website

Liepin

App

Prepayment

Service Charge Based on Result

Se

nio

r tale

nts

Clie

nt

Own talent database

Cold Call

Recommendation from acquaintances

Internet channels

Other channels

Dem

and

Recom

mendatio

n

Searc

h

Matc

hin

g

Note: Enterprises in each industry chain are arranged in alphabetical order.

Source: Publicly available material and interviews


自有人才数据库 Support

service

Recruitment management system Cloud service provider

Others

Career social networking

16


Companies & Analysis Demand Side: With The Rise of Domestic Enterprises, Demand For

Headhunting Service has Increased Rapidly

As domestic enterprises grow fast, their demand for senior talents continues to grow rapidly, which is reflected by the

increasing shares of domestic clients in China’s headhunting companies.

CAGR of 2000-2016

16.2%

Source: Data of Chinese enterprises listed as World Top500 is from fortunechina.com and share of domestic clients of China’s headhunting companies are based

on interviews with enterprises.


10

18

54

100 106

110

2000 2005 2010 2014 2015 2016

The Number of Chinese Enterprises Listed as World Top 500 from 2000-2016

The number of Chinese enterprises listed as world top500

0%

5%

30%

20%

30%

50%

X-Giants Bó Lè Associates Vastsea

Share of Domestic Clients of China's Headhunting Companies, 2011-2016

2011 (%) 2016 (%)

17


Companies & Analysis

Demand Side: Cross-industry Development and Demand for Diversified Talents

Currently, all industries in China, from real estate to household appliances and to e-commerce, are exploring cross-

industry operations. This in turn created a rapid development in new sectors and positions, enterprises now have higher

demands for more diversified senior talents.

Integrative Development of Industries in China

Source: Data for integrative development of industries in China is based on publicly available material


Internet +

Travel

Medical

Transport

Real estate

Retail

Financial

Diversified Demand For Talent

Cross-industry talent for industry

integration

Demand for cross-industry talent boosted

by rapid cross-industry development

Multicultural talent for global

operations

Demand for multicultural talent boosted

by the global presence of the enterprises

Professionals in new technologies

Increasing demand for professionals

familiar with new technologies in new

energies, life science, communication,

aerospace and other sectors

18

Supply Side: Polarization in Executive Search Industry

Companies in Group I and II puts focus on brand-building and improving consultant’s ability, with the competitive edge in

service quality. On the other hand, Group focus mainly on short-term results without strategy or long-term plans investing

heavily in talent search. This would result in a lack of clients, development plans and a poor brand image.

Group I Top 5 international

headhunting companies

Group II

Foreign headhunting companies

& excellent local headhunting

companies

Group III

Small local headhunting companies

Typical company: Korn Ferry, Heidrick & Struggles, Spencer

Stuart, Egon Zehnder, Russell Reynolds Associates

Feature: Targeting C-level and other senior talent, service for

high-end clients, excellent brand image, experienced

consultants, high quality, standard process and high fees

Typical company: Bó Lè Associates, HunterChina, Hays,

Michael Page, Career International, Vastsea, etc.

Feature: Search for mid- or senior-level managers as well as senior

talents, high quality consultants, fast response, short project cycle,

rapid development in recent years

Feature: Vast number of companies, of various levels,

concentrating on mid- and low-end positions, but also senior

talent, services for small enterprises and private enterprises,

young consultants of lower quality, but competitive in terms of

price and project cycle

Division of China High-end Headhunting Companies




Companies & Analysis

19

Supply And Demand in China’s Executive Search

Industry Demand for Senior Talent is Greater than Supply, Indicating Great Development

Potential

2018.0 2367.0

4020.0

6487.0

8865.0

9.1% 11.8% 19.1% 20.3%

17.3% 69.8% 61.4% 36.7%

2011 2012 2013 2014 2015

Number of Headhunting Companies, 2011-2015

The number of headhunting enterprises

Inrease rate of Chinese enterprises (%)

Inrease rate of headhunting enterprises (%)

870.0 830.0

880.0 800.0

870.0

960.0 980.0

2010 2011 2012 2013 2014 2015e 2016e

Number of Talent Recommended by High-End Headhunting Companies, 2010-2016

Number of talents recommended (1,000)

Source: 1. Data for headhunting companies from 2011-2012 is from publicly available

material; 2. That of 2013-2015 is based on publicly available material and interviews with

experts.


Source: 1. Number of senior talent recommended from 2011-2014 is from the Annual

Report on the Development of China‘s Human Resources (2015)；2. Data for 2015-2016

is based on publicly available material and interviews with experts; 3. e stands for

estimation


As the number of big enterprises in China continues to expand, the demand for senior talents would also increase.

Studies have shown that in a mature market economy, the ideal ratio of headhunting companies to the number of

enterprises is 5:1000. As the ratio in China is much lower, this indicates great development potential for the headhunting

industry.

20

China’s Executive Search Market: Revenue

Revenue of Executive Search Market Growing Steadily

As the start-up boom continues and domestic enterprises going global, the revenue and demands for senior talent of

executive search industry will keep increasing.

Note: Revenue of high-end headhunting industry only covers the commission of executive search services, and does not include Recruitment

Process Outsourcing (RPO), HR Consulting Services, talent dispatch and other HR services.

Source: Data is from enterprise financial reports and interviews with enterprises, and in reference to the Annual Report on the Development of

China's Human Resources 2014. AESC Executive Talent 2020 and other reports, iResearch’s statistical model.


1.45 1.67 2.05

2.47

3.19

4.35

5.36

6.51

15.4% 23.0% 20.2% 29.4% 36.4% 23.1% 21.5%

2009 2010 2011 2012 2013 2014 2015 2016

China’s Executive Search Market Revenue and Growth, 2009-2016

Market revenue (bn Yuan) Growth rate (%)

21

1

2

3

4

Profile of Executive Search Services in China




22

Competitive Analysis Of The Executive Search Industry

Enterprise Development Overview

To ensure efficiency and a high completion rate, most executive search companies have an accumulated candidate

database of over more than 1 million candidates, expanding by an average of 15% annually. At the same time, they may

use Gllue Software, Beisen and some self-developed management systems to reduce the time to search for candidates.

At present, an assignment would take about 1-2 months to complete and more senior positions would require a longer

period. Headhunting enterprises have a similar number of clients, usually from 100-200 with the Top 5 clients accounting

for about 30% of the revenue.

Candidate

database

100m+

Cold Call

Search

online

Active

contact

Annual growth in active

candidates: About 15%

Self-developed Share of Top5 clients:

About 30%

Number of clients: 100-

200



23


Established for 20 years in China, Bó Lè Associates and Career International has the longest history and have

accumulated the most extensive experience in the industry.

Executive Search Services (1/2)

Company name Experience Business layout Competitive industry

Bó Lè Associates 1996 Headhunter All

Career International 1996 Headhunter, RPO All

Future-Step 1998 RPO, Headhunter All

Vastsea 1999 Headhunter Real estate, manufacturing, consumer

goods, IT

Proking Management Consulting 2002 Headhunter Financial

MRI 2002 Headhunter Industry and medical

Kelly Services 2002 Headhunter, RPO Manufacturing, financial, communication,

IT, education & training, law, health care

Hudson 2003 Headhunter, RPO Financial, IT, sales, accounting, real

estate, manufacturing

Michael Page 2003 Headhunter financial accounting, financial,

engineering & manufacturing, HR

Hays 2005 Headhunter, RPO All

Service Features of Executive Search Companies (by Time of Establishment)

Note: 1. Experience refers to the history in mainland China; 2. Top 5 headhunting companies are not evaluated due to their different business model.

Source: 1. Interviews with enterprises and publicly available material


24


Executive Search Services (2/2)

Company name Experience Business layout Competitive industry

Randstad Group 2005 Headhunter, RPO, talent

dispatch IT, manufacturing, financial accounting

FESCO ADECCO 2005 RPO, Headhunter, BPO,

employee benefits All

Allegis Group 2009 Headhunter, RPO IT

Mango Associate 2006 Headhunter Financial accounting, manufacturing,

high technology

Robert Walters 2007 Headhunter, salary survey financial accounting, financial, IT

Risfond 2008 Headhunter All

FMC (Future Management

Consulting) 2008 Headhunter FMCG, automobile, real estate, energy

Brecruit 2009 Headhunter Manufacturing, financial, IT & internet

Manpower-Experis 2012

Headhunter, RPO, paying

insurance and housing fund,

employee background

investigation, solutions

All

Spring Professional 2014 Headhunter IT, industry, medical,

Life science (priority)

Service Features of Executive Search Companies (by Time of Establishment)

Note: 1.Experience refers to the history in mainland China; 2. Top 5 headhunting companies are not evaluated due to their different business model.

Source: 1. Interviews with enterprises and publicly available material


25


Revenue Of Five Executive Search Firms In China Exceeds 100 Million Yuan.

Note: 1.Top 5 headhunting companies are not evaluated due to their different business model. 2. Statistics is only for mainland China; 3. For high-end headhunting companies

mainly engaged in RPO, such as Career International, headhunting revenue is estimated, and data for others is based on commerce, tax and other official material. 4. Headhunting

companies’ overall bad debt rate of 5-10% is not taken into consideration here.

Source: Revenue is based on data reported to industrial and commercial administration bureaus by the companies, interviews with enterprises and other publicly available material.

Executive search firms as opposed to headhunting firms have higher standards in terms of quality and services.

Therefore, foreign invested enterprise and Sino-foreign joint ventures were the pioneers of this industry in China. Since

the “Top 5” headhunting companies have different business models, standards and number of consultants, a comparison

cannot be made.

In 2015, 17 headhunting firms in China has revenue above 50 million Yuan, while 5 firms has a revenue over 100 million.

All top 20 firms listed below has a revenue of over 30 million Yuan.


100 mn Yuan

50 mn Yuan

Mic

hael P

age

Care

er In

tern

atio

nal

Vasts

ea

Manpow

er-E

xperis

Bó L

è A

ssocia

tes

Robert W

alte

rs

Hays

FE

SC

O A

DE

CC

O

Randsta

d G

roup

Hudson

Mango A

ssocia

te

Kenexa

Alle

gis

Gro

up

X-G

iants

Inte

rnatio

nal

Llo

yd M

org

an E

xecuitiv

e

Ris

fond

Futu

re-S

tep

ZD

L E

xecutiv

e S

earc

h

HR

netO

ne

Bre

cru

it

Ranking of High-end Headhunting Companies by Revenue in 2015

26


Executive Search Services

Company name Main business Number of branches

(mainland China)

Number of

consultants

Estimated Annual

Consulting Value (1,000)

Bó Lè Associates Headhunter 8 136 900

Mango Associate Headhunter 8 125 650

Michael Page Headhunter 6 430 580

FESCO ADECCO RPO, Headhunter, BPO, employee

benefits 10 202 450

Hays Headhunter, RPO 4 259 360

Career International Headhunter, RPO 34 601 330

Randstad Group Headhunter, RPO, talent dispatch 12 290 300

Manpower-Experis Headhunter, RPO, paying insurance

and housing fund, 24 547 250

Risfond Headhunter 65 260 220

Vastsea Headhunter 34 831 180

Service Capacity of Top10 High-End Headhunting Companies (by Annual Consulting Value)

Note: 1.Top 5 headhunting companies are not evaluated due to their different business model. 2.Statistics is only for mainland China; 3. For high-end headhunting companies

mainly engaged in RPO, such as Career International, headhunting revenue is estimated, and data for others is based on commerce, tax and other official material. 4. Annual

consulting value is estimations only for reference based on revenue, number consultants and interviews with enterprises; 5. Robert Walters and Hudson are not among the top10

because of fewer branches.

Source: 1. Revenue is based on data reported to industrial and commercial administration bureaus by the companies, interviews with enterprises and other publicly available

material; 2. Branch data is from publicly available materials; 3.Number of consultants is based on LinkedIn registration information and interviews.


Consultant’s annual revenue is a clear indication of the firm’s performance and at the same time it is also reflection on

the quality of consultants. iResearch has conducted a research rating executive search firms according to the no. of

branches, no. of consultants and the revenue. The top 10 companies are listed below and are ranked by the rating and

consultant’s annual revenue. *Ratings are based on the performance in mainland China only and does not include Hong Kong,

Macao, Taiwan or other overseas countries.

27


Bó Lè Associates And Other Five-star Executive Search Service Enterprises As the demand for senior talents is expanding to second- and third-tier cities in China, client’s poses higher requirements

on the regional coverage of the headhunting companies. iResearch rated the service capacity of the headhunting

companies based on their number of consultants, geographical coverage and revenue. Among these companies, Bó Lè

Associates, Michael Page and FESCO ADECCO are rated as five-star companies, and 8 other companies including

Allegis Group, Futurestep and Hudson are rated as four-star-ones.

Note: 1.High-end headhunting companies are rated according to their revenue, number of branches and number of consultants; 2.The top5 are not rated due to their quite

different charge methods; 3.Selection criteria is an annual consulting value above 400,000 Yuan; 4.Comapniy logos are arranged in alphabetic order; 5. Company list and their

ratings by item and overall ratings, see Appendix.


Five-star High-End Headhunting Companies in China

Four-star High-End Headhunting Companies in China

28


Top 5 Executive Search Companies Has Bargaining Power But Local

Companies Are Narrowing Down The Gap At the moment, the Top 5 executive search companies still has the competitive edge as they are well established, has a

strong brand image with high quality consultants and strong capabilities in identifying the right candidate. Therefore, they

maintain a strong bargaining power, being able to charge at a higher rate. On the other hand, local headhunting

companies who are familiar with the local market have been developing rapidly in recent years and are narrowing down

the gap between them and the Top companies.

Bó Lè Associates

Risfond

Korn Ferry

Heidrick &

Struggles

Spencer Stuart

Egon Zehnder

Russell Reynolds Associates

Number of consultants <100 >100

Average

project

charge

>200,0

00 Y

uan

<

200,0

00 Y

uan

Hudson

Spring Professional

MRIC

Michael Page

Allegis Group

BRecruit

Vastsea

X-GIANTS

Manpower-Experis

Strength of China’s High-End Headhunting Companies, 2016

Source: Number of consultants and average project charge are from interviews with enterprises


29

Executive Search Companies in China

Case Study: Korn Ferry

Source: Interviews with enterprises and publicly available material


Business Model

Executive

Search Recruitment

Process

Outsourcing (RPO)

Leadership &

management consulting

• Focuses on executive

search services

• Mainly Retained Basis

• Assignment cost on

average: >100,000

USD

• Number of branches

in China: 4

Company Profile Core Strengths Development Trend

Brand advantage: Over 50

years of history, mature

headhunting and HR service

experiences, strong brand

image, focus mainly on

high-end clients

Horizontal development:

Further expansion

towards leadership

consulting, mid-end

headhunting, recruitment

process outsourcing, etc.

and signs of industry

chain integration

• Enterprise-oriented

• No Specialization

• Talent search flow relying

on self-developed

assessment models,

including leadership type

description system, global

headhunting business

management system, etc.

Service Features

30


Case Study: Bó Lè Associates

Note: Bó Lè Associates is part of Recruit Group, which is a renowned global supplier of HR services covering the whole industry chain. Subsidiaries involved in headhunting

are Bó Lè Associates, RGF, Brecruit, etc. those in temporary labor dispatch are CSI, Staffmark, etc. and those in online recruitment are 51job, indeed, etc.



Business Model

Executive

Search Talent positioning (Mapping service)

Leadership &

management consulting


search service

• Mainly Contingent

Basis

• Project cost on

average: 150,000-

200,000 Yuan

• Number of branches in

China: 8

Company Profile Operation

• More than 16,000 clients

• 136 consultants

• 1-million profile talent

base

• Average project cycle:

55 days

• Average annual

consulting value:

900,000 Yuan

Core Strengths

Consultant quality: Senior

consultants with an average of 10

years of experience and with

strength in identifying talents for

vacancies that are difficult to fill

Brand advantage: Over 20

years, with 16,000 clients served;

44% repeating clients; over two

thirds of candidates presented are

interviewed; interviewing ratio of

about 70%


• Specialization by industry

• Relies on consultants’

experience in the industry

and third-party talent

database software

Service Features

31


Case Study: Brecruit

Business Model

Recruitment and

Executive Search

Services


search services


Basis

• Project cost on

average: 30,000-

70,000 Yuan

(depending on region

and industry)


in China: 7

• Covering all industries and

strong in manufacturing,

financial, IT & internet

• Number of clients: >4,100

• 11,000 vacancies completed

• 100 consultants

• Average project cycle: 1-2

months

• Revenue growth rate: 30%

Consultant quality:

Consultants has 4.5-6 years

of experience on average,

most professionals and

experts in the industry before

becoming a headhunter

Fast response: presenting

candidates in 3-5 working

days on average




experience in the industry,

talent database, internet

platforms, etc.

Company Profile Operation (as of 2015) Core Strengths Service Features

Note: Bó Lè Associates is part of Recruit Group, which is a renowned global supplier of HR services covering the whole industry chain. Subsidiaries involved in headhunting

are Bó Lè Associates, RGF, Brecruit, etc. those in temporary labor dispatch are CSI, Staffmark, etc. and those in online recruitment are 51job, indeed, etc.



32


Case Study: FESCO Adecco



Business Model

Outsourcing HR services Headhunter & PRO

• Comprehensive HR

services


Basis

• Project cost on

average: 80,000

Yuan


in China: 10

Company Profile Operation Core Strengths

• Number of clients:

hundreds

• Number of consultants:

>200

• Talent base: 400,000

• Completion Time:

Usually 2 months

• Annual consulting value:

400,000-500,000 Yuan

Brand advantage: Sino-

foreign JV set up by two

influential companies

Data base: HR information

collected through multiple

channels, large databases

of senior management

personnel and

professionals for several

hot fields



• Relies on understanding

of the industry through HR

service system, global

recruiting system and

talent database

Service Features

33


Case Study: Hudson



Business Model

Executive

Search Talent management

• Targets intermediate and

senior level talents

• Mainly Contingent Basis

• Project cost on average:

100,000 Yuan

• Number of branches in

China: 3

• Project cycle: Usually 4

months for senior

positions and 1 month for

middle to junior positions

Company Profile Operation Core Strengths

• 1,000 corporate clients

• Number of consultants:

164


>500,000 Yuan

Consultant quality:

Experienced consultants,

who used to be

professionals in IT, law

and financial industries

Service quality: One out

of two candidates

recommended by Hudson

is interviewed

Recruitment process

outsourcing (RPO)

• Enterprise-oriented and

candidate-oriented

• Specialization by Industry

• Relies on the optimization

of candidate screening

model, including

assessment center,

psychological tests and

online capacity scanning

(CSO)

Service Features

34


Case Study: Vastsea



Business Model

Recruitment

and

Executive

Search

Business

outsourcing

HR

outsourcing

• Recruitment and

Executive Search


basis

• Project cost on

average: 80,000 Yuan

• Average project cycle:

1-2 months

• 34 branches


• 800+ consultants


300,000 Yuan

• Clients mainly in real estate,

manufacturing, consumer

goods and IT

Core Strengths

• Wide branch coverage for

interregional collaboration,

efficiently meeting clients’

needs in different regions

• Focusing on second- and

third-tier cities to complete

business layout

• Short project cycle and

efficient services

Welfare

management




experience in the industry

and third-party talent

database software

Service Features

35


Case Study: X-GIANTS



Business Model

• Executive search

service

• Contingent basis

• Average project

cycle: 1 month

• Minimal project

charge: 50,000

Yuan, and 80,000 on

average



550,000 Yuan

• Number of consultants: 120

• Mainly serves multinational

corporations, involved in big

manufacturing, luxury,

financial, internet, medical,

culture & education, etc.

• Number of clients: 100-200

Core Strengths

• Many years of

experience serving

foreign clients and high

project quality

• High quality consultants

thanks to focus on

technical training, not on

study of certain industries

Recruitment Process

Outsourcing (RPO)


• Focus on comprehensive

ability, no specialization


experience and third-party

talent database software

Service Features

Recruitment to

Executive Search

36

1

2

3

4

Profile of Executive Search Services in China




37

Development Trends in China’s Executive Search

Industry

Economy Expansion in China And Demands from Domestic Enterprise Will

Become the New Growth Engine Chinese economy is in expansion and the macro economy is developing fast. As innovative businesses and domestic

enterprises expands rapidly, so does their demand for senior talents. Demand for talent among domestic enterprises will

become the new growth engine for the executive search industry.

Revenue of China’s internet economy in 2015

1,124.6 billion Yuan

China’s economic aggregate in 2015

10.9 trillion USD

Share in the world

14.7%

Chinese enterprises listed in Fortune

Global 500 in 2016

110

Share of Chinese enterprises

22%

YoY growth

47.2%

Source: China’s GDP data is from World Bank. Revenue of China’s internet economy is from iRsearch and Fortune Global 500 data is from fortunechina.com.


38


Industry

Rise of Local Headhunting Companies with Expansion in Geographical Coverage

As domestic enterprises are enhancing their global presence, domestic executive search companies would also need to

expand their business in overseas market and broaden their geographical coverage through investments and M&A, etc.

Source: Company website and publicly available material


Company Time of

establishment Overseas branch

Bó Lè

Associates 1996

Branches in Hong Kong,

Taipei, Jakarta, Kuala

Lumpur and Bangkok

Career

International 1996

Branches in Hong Kong,

India, Vietnam, Thailand,

Indonesia, Singapore and

other places in Asia

ZDL

Executive

Search

2000 Branch in San Francisco,

USA

Risfond 2008

Branches established in

San Francisco and Hong

Kong, and in progress in

Tokyo and London

Overseas Branches of Local Headhunting Companies

39


Industry

Business Extension of High-End Headhunting Companies And Improvement of

Leadership Consulting Layout Actions of major high-end headhunting companies in recent years indicate that high-end headhunting companies are

expanding the business in the direction of leadership and HR consulting and other services, showing signs of faster

integration in the industry chain.

Source: Enterprise financial reports and publicly available material


Business Development of Korn Ferry

Launch of Futurestep

Extension in the direction of mid-end

headhunting, talent consulting, recruitment

process outsourcing and other business

Acquisition of Lominger

Acquisition of Lominger, a supplier of HR

assessment systems, for leadership

consulting and management consulting

business Acquisition of Global Novations Strengthening leadership and talent

consulting business

Acquisition of Pivot Leadership

1998

2006

2012

2015 Strengthening leadership and talent

consulting business

Acquisition of Hay Group

Strengthening leadership and talent

consulting business

Business Development of Heidrick & Struggles

Acquisition of Senn Delaney

Acquisition of leadership consulting

agency, Senn Delaney, developing a new

leadership consulting business

Acquisition of Co Company

Acquisition of Co Company, strengthening

leadership and talent consulting business

Acquisition of Decision Strategies

International Acquisition of Decision Strategies

International, strengthening leadership and

talent consulting business

2013

2015

2016

Acquisition of Philosophy IB

Acquisition of Philosophy IB, strengthening

leadership and talent consulting business

40


Industry

Contingency Search has become the Mainstream Model, forcing Enterprises to

change their Service Model.

At present, there are both Retained Search Models and Contingency Search Model in the executive search industry.

Due to intensive competition in the market, the Retained Search Model will be phased out with Contingency Search

Model being the mainstream model. The Contingency Search Model would result in companies shifting from “client-

oriented” to “candidate-oriented”



Consultant

positioning

Client reliance

Approach & cycle of

talent research

Talent search in all industries

Candidate search ability

Focus on vertical industry

Industry experts familiar with

industry dynamics > > >

Passively await for client’s demand

High reliance on KA (key account) > > > Actively tapping demand

Balanced client structure and lower

KA reliance

Fixed talent search approaches

Long search cycle

Accumulation of talent in the industry

Immediate recommendation thanks to

short search cycle

Relationship with

candidate

Temporary “sales manager” of

candidates

Not close relations with candidates

Candidate’s adviser for career growth

Close relations with candidate

Client-oriented Candidate-oriented

> > >

> > >

Change in Service Models of High-End Headhunting Companies

41


Industry

Convergence of Internet and Executive Search Industry Creates Various New Models

Online recruitment platforms represented by HunterOn are third-party trading platforms for intermediate and senior

talent, enterprises and headhunters. While Liepin is actively developing RPO, headhunting services and other

businesses capitalizing on its abundant intermediate and senior talent resources.

Liepin—Talent Search Channel & Headhunting Service

En

terp

rise

s

He

ad

hunte

r

Enterprise

Service

1.Vacancy posted

2.Headhunter

service

3.Brand exposure

4. Recruitment

process outsourcing

Talent

database

1.Talent search

2. Search resume

Inte

rme

dia

te a

nd

se

nio

r tale

nt

Source: Company website and publicly available material


HunterOn—Headhunter service trading platform

Enterprise Headhunter

Intermediate and

senior talent

View

vacancies Call headhunter for

help

Posting demand for recruiting & headhunting service

Order receiving

& talent search

42


Industry

New Technologies promotes Search Efficiency but cannot replace the role of

Consultants

In terms of talent search, computer algorithms could only promote search efficiency. But in terms of talent matching,

computer algorithms could not replace the “art” of headhunting due to intangible and unmeasurable factors Therefore,

the competitive and cooperative relationship between technology companies and headhunting companies will remain for

a long time in the future.

Computer Algorithms & Online

talent search channel

Computer Algorithms

Intelligent matching of

junior to middle level talents

Professional senior

level talent services

Structured resume databases are

established allowing vacancies

and talents to be matched using

certain algorithm.

With the development of the

online platforms, information of

potential talents are more easily

accessible. It has also become

a major talent search channel

for its convenience and cost

efficiency.

Executive search services

requires consultants with

prior industry knowledge,

accumulation of high-quality

connections and excellent

communication skills, which

cannot be replaced by any

technology. Source: Publicly available material.


43

Appendix 1

Enterprise Service Capacity Rating Criteria

Dimension Criteria Rating

Number of branches (in mainland

China)

<5 1

5-9 2

10-20 3

20-40 4

>40 5

Revenue

<5 million Yuan 1

5 million -10 million Yuan 2



>100 million Yuan 5

Number of consultants

<50 1

50-100 2

100-200 3

200-500 4

>500 5

Overall rating

<4p 1

4p and above 2

6p and above 3

8p and above 4

>10p 5

Annual consulting output value

<200,000 Yuan 1

200,000-300,000 Yuan 2

300,000-400,000 Yuan 3

400,000-600,000 Yuan 4

>600,000 Yuan 5

Source: iResearch’s statistical model


44

Company name Revenue Number of

branches

Number of

consultants Overall rating

Annual

consulting output

value

Bó Lè Associates

Michael Page

FESCO ADECCO

Mango Associate

X-GIANTS

Kenexa

Lloyd Morgan Executives

Robert Walters

Hudson

Allegis Group

Future-Step

Appendix 2

Service Capacity Ratings of Four-star Enterprises And Above

Source: iResearch’s statistical model


5

5

4

4

4

4

4

4

4

4

4

2

2

3

2

2

2

2

1

1

1

1

3

4

4

3

3

3

3

3

3

3

2

5

5

5

4

4

4

4

4

4

4

4

5

4

4

5

4

4

4

5

4

4

5

45

Company Introduction / Legal Notice

About iResearch

iResearch is a provider of insights into China’s internet space and global fastest-growing sectors as well as value-added corporate

services. It offers a wide range of services including big data insights and forecasts, industry research and corporate consulting,

investment and post-investment services.

Founded in 2002, iResearch is the first third-party firm focuses on research in China’s internet sector. Since its inception, it has

published thousands of industry reports and provided custom research and consulting services to thousands of clients. It is now the

preferred third-party research brand for the IPO of Chinese internet companies. iResearch set up its global research center in 2015,

expanding the scope of research to fast-growing sectors worldwide.

Copyright Notice

The report is produced by iResearch Co., Ltd. All texts, figures and tables in this report are under the copyright protection of relative

laws and regulations on intellectual property rights in the Peoples’ Republic of China. No organization or individual is allowed to use

the information in this report for any business purpose without the written consent from iResearch. Some texts and data in this

report are collected from public information and their copyrights are held by the original authors. No organization or individual is

allowed to use the information in this report for any business purpose without written consent from the original authors and

iResearch.

Exception Clause

Industry data and market forecasts are mainly obtained through desk research, industry interviews, market survey, and other

research methods in accordance with iResearch’s statistical forecast model. Corporate data are mainly obtained through interviews

and are for reference only. Some data published in this report is based on sampling method and is therefore influenced by sample

structure. Due to limitations in the research method, sample size and scope of data collection, the report only serves as a reference

for customers who purchase the report. iResearch will not be held liable for the data and views in the report.

Contact Us

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Documents

2016 China’s Executive Search Industry in ChinaIntroduction: Executive Search Industry in China Definition ... Executive Search services was first introduced in China in 1992 and