The war on talent: Korn/Ferry International in China

Résumé du document

With $452 million in global fee revenue, 474 consultants worldwide, 70 offices globally, and 4.4 million candidates in its database, Korn/Ferry has been successful due to the high quality, process and speed at which its consultants have placed candidates. In 1978, Korn/Ferry International entered the Chinese executive search market with the opening of its Hong Kong office. International expansion has been necessary to meet the needs of its global customers. While North America and Europe are the biggest executive search markets currently, China is expected to grow tremendously in the coming years. With a market potential of U$100 million, the Chinese executive search market increasingly desires Returnee candidates. In order to gain market share in China, however, Korn/Ferry faces both immediate and long-term challenges. Korn/Ferry's biggest challenge right now is recruiting Research Associates as well as employees at all other levels. With only 21 professionals, the Shanghai office has more business than it can currently keep up with.  Additionally, it has been difficult to find the right people because Korn/Ferry wants consultants with several years of HR experience. Associates need to be personal and professional, as they often interview first round executive candidates. 

Extraits

[...] < number > Singapore How has Korn/Ferry Expanded Internationally? Korn/Ferry's expansion model has been to “Go where our customers go.” Korn/Ferry will use a Managing Director to oversee a new office to ensure Korn/Ferry practices and cultures are consistent with other offices. Shanghai Japan Establishing the Shanghai Office: Cultural Distances – Shanghai office started with supervision by Hong Kong Partner, but hired consultants who already live in China with strong Mandarin and English skills. This strategy has helped to reduce cultural barriers. [...]

[...] However, based on data from 1999, Korn/Ferry's revenue per search consultant is $421. Although Korn/Ferry's revenue per consultant is the lowest amongst the top competitors in Asia, we believe this metric may be skewed as Korn/Ferry opened 5 new Asia offices in 1997. < number > Korn/Ferry's China Executive Recruitment Market Recruitment Talent Pool Korn/Ferry MNC's Local Companies SOE's Require Executives with international experience, as well as bridge the culture gap between China subsidiary and Corporate HQ. Likely to work with Ex-pats and locals. [...]

[...] Going global suggests that Korn/Ferry can use their global network to help these Chinese companies find talent to manage operations overseas. Strong emergence of middle managers will require Chinese firms to leverage Korn/Ferry's massive database and candidate pool. Futurestep is the perfect recruiting platform to pick up the volume and increase in hiring demand. With the launch of Futurestep in Shanghai last year, Korn/Ferry is well positioned to take advantage of the increase in middle management ranks. Leadership development will be crucial to China's global growth. [...]

[...] < number > Korn/Ferry Business Model Contingent Fees Paid upon completion Non-exclusive “Transaction” based Typically a “numbers” game Send resume without adequate review Will lose motivation if the search is taking too “long” Retainer Fees 1/3 of annual salary Fee is paid regardless of whether a candidate is placed Exclusive contract Allows for a team of individuals to be assembled to focus efforts on search Motivated to complete search as quickly as possible as the longer the search [...]

[...] Research Associates Don't hire those who are only motivated by financial compensation Hire those who understand the importance of teamwork and company culture < number > References The McKinsey Quarterly 2004 Special Edition, “A Guide to Doing Business in China” by Jonathan Woetzel Informational interview with Andy Knox of Korn/Ferry (March 2006) Korn/Ferry company presentation by Kirsten Mao (March 16, 2006) Follow-up conservation with Kirsten Mao (April 2006) Korn/Ferry International 2005 Annual Report “Let the War for Talent Begin in China” by Joy Chen and Madelaine Pfau Heidrick and Struggles Harvard Business School “Russell Reynolds Associates, 1999” (Rev. March 2001) Korn/Ferry International 1999 10-K filing “Crisis and Renewal: Meeting the Challenge of Organizational Change, David Hurst. [...]