|China Hotel Recruitment - Beware of the Head Hunters.|
By René J.M. Schillings
Monday, 17th September 2012
The apparent growth of the hotel sector in China and at the same time reported shortage of qualified hotel managers in China has led to a wave of Head Hunting Agencies aggressively looking into the China market.
Asian Hotel & Catering Times interviewed René J.M. Schillings, who was first pioneer in China to specialize hotel recruitment specifically for within China.
AHCT: We regularly feature the issues on recruitment for hotels, the difficulties of finding and retaining talents in our industry. It’s a global trend, and it affects Asia. In particular in China there seems to be a real shortage of qualified talents in hospitality, combined with high staff turnover. From where came your passion to start an Executive Search Firm, specialized in Hoteliers in China?
RS: Working as a Hotel Manager in China I realized how difficult it was to find qualified local staff in China and when it came to hiring expatriates from overseas it was also often hit & miss. 40% of the foreigners who come to work in China do not complete their first contract. They resign or get terminated.
The HR Department at property level was often not well-equipped and experienced or routined enough to do proper recruitment at executive level. Their approach was still as practiced for rank & file hiring. From Corporate Head Office level, applicants or resumes would be sent that weren’t suitable for the location or the requirements at the particular property.
Observing the growth of China's hotel industry since the late 1990's, and my own experiences as hotelier being offered positions in hotels by people who had no direct exposure to the region, or understood how local differences can make a hotelier be a star in 1 place and a failure in the next made me realize that there would be a need for a Search Firm which understands that good recruitment requires a deeper understanding, and can match hoteliers and their new jobs based not only on the required skill-set but also by matching person to place.
That sounds like an open-door, but it basically requires a set of checks and questions to determine who is suitable to go where, but also to ask more and deeper questions to employer, i.e. the hotel organization that is hiring. Hoteliers are passionate about their work and they can continue that passion when they land a next job in the right place, which is all what they had expected to be. This requires an intermediary who has clearly defined the opportunities but also the challenges of a position to be taken up.
AHCT: With many still hotels opening in China, business must be really good for you
RS: Well, yes, on the face of it. Basically we are in a business where there is no shortage of potential clients, in the sense that there is no shortage of hotels looking to hire, and looking hard & long and still not finding the right people. However, we supply a limited resource, which is the qualified hoteliers; The ones that everybody is after and this pool is limited. Despite great demand, we as an agency can not ‘produce’ more talents in a factory, or drill a new source to meet demand. The pool of available talents is out there, it’s a matter of how to reach them, and to convince them to be interested and available for a position we have in search.
Many hotels loose the opportunity to hire the candidate they want first by incomplete search guidelines and parameters (the criteria that makes 1 candidate suitable and the other not. And then for those who do seem suitable, due to slow processing of the application process, indecisiveness, changing of direction, or generally still are in a learning process when it comes to how you execute the process of recruitment. And this in a market whereby certainly the local candidates have the upper-hand and the choices as where to work.
This applies mostly to the candidates that are in short-supply and great demand, which in the case in China are the Mandarin speaking hoteliers with a stable employment record and who have worked for internationally established branded hotels. We have many cases where actually it is the candidates who decline job offers after a lengthy interviewing process. Our best clients by-the-way are not the opening projects, but existing hotels, that have been operating between 2 and 20 years, that have a normal turnover.
AHCT: So when you started in 2004 it was really a novelty in China to do professional Executive Search for hotels?
RS: Yes, I would like to often remind my clients that I did not invent the business of Executive Search, but I was the first to set up an office in the People’s Republic of China. Initially this led to a quick interest by the major hotel companies who were in desperate need of local Chinese hoteliers, which through traditional channels they could not find. We built up probably the largest database of Chinese Nationals and Chinese Speaking Foreigners in hospitality.
Also, what was different then and still now, is that no matter which large international hotel brand you may be dealing with, the recruitment fee is most often paid by the hotel property, and this requires the hotel owners’ prior approval. Hotel owners could not grasp the idea of having to pay for hiring staff, in a country where there is no shortage of people and where the hotel management companies claimed to have the worldwide resources, or other hotels in China to supply the management from.
Over the years, the owners have learned a lot in this regard and we now actually have many hotel owning companies who want to engage with us directly, for they see that the hotel management company they have engaged with to manage the hotel simply can’t come up with the right people, fast enough. So while we initially had mostly demand for local candidates, we have also proven to be more effective when it comes to recruiting the right expatriates. Despite the worldwide hotel management companies having a worldwide internal network they do not lack the employees who want to work in China, but lack the employees that are suitable, needed and wanted in China.
AHCT: The obvious media attention to shortages of hotel talents in China has lead to more Executive Search Firms doing what you do. Just like hotel room oversupply in certain markets, does it affect your business?
RS: Overall, professional Executive Search is still in it’s infancy in China, compared to more established markets worldwide. When we were the first, it was really pioneering to bring the concept to be properly understood. The arrival of more such Search Agencies has in general helped to build the understanding that a Search Firm has specific experience, routine and systems to assist a hotel in its needs. As one of the most established Search Firms for hoteliers in China, we may cover perhaps only 1% of the vacancies that are out there.
There is room to grow and there is room for other agencies too. However, I can categorize the competition we have seen coming in China in 3 types:
A) Established Search Firms, often with a pedigree or specialization in hotel & hospitality that have now also opened an office in China. In general we are happy with their presence for they have sound practices, and established procedures. However their understanding of China may be limited to the major cities, whereas the bulk of the demand for good matching is in the secondary cities and new emerging resort locations.
B) Established Search Firms, operating from their home base overseas. They too have years of experience in recruiting for hotel jobs worldwide, and they have only recently increased their focus on China, due to a general worldwide down-turn in business, with only Asia or in particular China still ‘booming’. These firms basically still operate in the way before I decided that there was a need for a China specialized Search Firm.
Due to their conventional approach to recruitment for hotels worldwide they often miss the essence of understanding the location or the hotel property beyond the website. While these firms continue to learn more about China, sometimes by a short visit to the major cities only, they could never become a niche player in this market, as much as TOP Hoteliers could not be doing the same job we do in China, worldwide.
These agencies can often deliver world class candidates who then become the 40% that doesn’t complete their first contract. We also see that some hotels in China whom we refrain from working for, due to high turnover, unstable management, or mega-projects that turn out to be white elephants, end up engaging such overseas firms, who naturally take on these search assignments only by what they can see from a distance, but not at close range.
C) General Recruitment Firms, drawn by the general boom in China, also do try to set up specialist hospitality divisions. As a specialist on Hotel Recruitment, we find them the least disturbing in the market, unless they resort to pirate practices like cold-calling every hotelier in the phone book (or these days, every hotelier on Linkedin).
D) A lot of pop-up, start-up firms locally in China. Something that seems to be successful in China is often quickly copied by those who believe they can do it as well. These Search Firms worry us, as they seriously affect the understanding of what a real Executive Search Firm does, or can do. The majority of these firms have no particular specialization in hospitality and their game seems to be to get as many searches, and to reach as many hoteliers. Without much due diligence or understanding of the subject matter they randomly cold-call hoteliers to interest them for a job, of which they have a very thin understanding of what it takes.
These so-called head-hunters literally call everybody in the phone book, not really doing a pre-selection as whom to target, but rather to see who is ‘biting the bait’. Linkedin or similar social media seems to be a popular platform for most of these agencies to find the candidates they want to recommend to their clients as the best selection of available candidates.
What this sort of Head Hunters do is that they set a trend that for example HR Directors is the norm, and leads to the perception that every Search Firm is practicing this sort of low-level and shallow selection process. In addition, I hear from a lot of hotel managers who I speak to, that they are greatly annoyed by these cold-calls, and sometimes baffled to find out when their own hotel company uses such firms. Association of a hotel brand with a very poor-practice and outright unqualified Search Firm, may fire back on the hotel brand’s reputation.
AHCT: It’s a free market, so how do you counter this rampant competition
RS: First of all, TOP Hoteliers was founded on the principle that good recruitment takes a well-founded understanding of the geographical market we operate in. We practice a certain degree of client selection (apart from selecting candidates) which includes asking many questions before a search is started. We refrain from cold-calling, and in general do not advertise our vacancies on internet or social media.
We have built long-lasting connections to the hoteliers in China, that doesn’t only revolve around the jobs we have today. Hospitality is a small community, even in a large country like China, and being knowledgeable about what you do is recognized by hoteliers easily. For the A-type competitors we generally welcome them, as they also help to build the general concept of using professional Search Firms. There is nothing wrong with competing against other agencies that have an equal high level of professionalism.
As for the B & C-type competition, we feel we have a distinctive edge over them, due to speciialisation, our presence and understanding of the China market. The C-type competitors are currently an annoying trend. Many hoteliers see this also as a nuisance, if not a sad lowering of standards and the short-term fast approach of these agencies will eventually lead to a natural selection of some agencies that grow to be more professional and others who move on to do other things.
AHCT: Is the future bleak or bright for Search Firms in China.
RS: I think the future for any business is bright in China if you just run the numbers and if you consider that many business in China are still only touching the surface of it. The many hotels opening today in China will be needing managers for decades to come and while the number of people entering a career in hospitality is growing, the number of those who make it a life-long career is diminishing. The fast growth in China will one day slow down, but those hotels will be there and need people to operate them.
A booming economy like China suffers at many levels from short-term thinking and calculation. The usage of a Search Firm does present a cost. However, slowly the understanding grows that the risk of hiring the wrong person, or leaving a position open for too long, is far more costly, in the long term.
HR Directors are still learning and getting more used to work together with professional agencies as a partner, and hotel operators are seeing the benefit of better recruitment and selection as a solution to high turnover, or hiring the wrong people in the first place.
René J.M. Schillings, a Dutch National, is the Managing Director of TOP Hoteliers, the first specialized hospitality recruitment agency to open offices in the People’s Republic of China (in 2004). Based in Hong Kong he devotes most of his time managing the 3 offices in Hong Kong, Shenzhen and Beijing, where his team of consultants recruit hotel managers for all major international and some local hotel companies in China. His company was very early to recognize the need for local talent, Mandarin speaking expatriates and China experienced expatriates. His knowledge of the China Hotel Industry stems from his career as Hotelier in China that began in 1997. He has a BA in Hotel Management from Stenden University, a.k.a Hotel Management School Leeuwarden, The Netherlands and an MA in International Tourism & Leisure Studies from Metropolitan University in London, England. He is a keen observer of industry trends and has published numerous articles on HR issues in hospitality in China. René lives since 2005 with his wife and 2 children in Hong Kong.
Company website: www.tophoteliers.com