ContentsSummaryOpportunities in the HR Services Market in ChinaSeek New Profit in Creative New Business ModelsBrand Market...
Summary
Top 100 Human ResourcesServices Brands in GreaterChina         Top 100 Human Resources Services Brands in Greater China 20...
Opportunities in The HR Services                                               Market in China                            ...
2012-16, the global HR and recruitment services industry will achieve an annual growthrate of 3.5% and hit USD610.3 billio...
China Become The Engine of World EconomyOn June 1, 2012, the financial markets in Shanghai and Tokyo kicked off the direct...
amount of revenue and capital increase. In 2011, the gross revenue of China’s Top 500 was only 44.8% ofthat of the US Top ...
Multi-National Companies Make China ATesting Ground for Operating Model ShiftThe research of Deloitte suggests that, with ...
that are doing HR services and executive search, and                                                                The Er...
26.6% of the economic growth. By the end of 2010, the country had boasted a talent pool of 120 millionpeople, or 11.1% of ...
Seek New Profit in Creative                              New Business ModelsWith its iconic iPod and iTune online store, A...
Total solutions not only improve the barriers to competition,          to keep the standardized process, work flow, inform...
● The services that Korn/Ferry International provides include:• CEO and executive search• Executive coaching• Talent manag...
Why Cloud Computing Rules?1.FasterCloud computing pools computing resources together, making the use of cloud apps compara...
SaaS Reshapes HR Software IndustryOn the information superhighway of the Internet, software is comparable to vehicles onth...
“software terminator” due to its motto “terminating software.”          HR Software Giants Are Embracing SaaS andBenefitin...
management. Among them the Employee Central, the core HR solution of SuccessFactors, is incorporatedinto the cloud computi...
training. Representative companies of the previous kind are            At the same time, the paper also points out that th...
With the development of the web technology, social                  The most significant discovery in social networking is...
Six Degrees of Separation Theory                                        Social Media Undergos Explosive GrowthIn the field...
The most popular social media in China                                                                              Social...
registered users in China, while the number in the US is nearly 65 million.                            In November 2011, a...
the red. Zhaopin.com has been losing for three                                                                          co...
spite of lower unit prices of services, giants like the CIIC, SFSC and FESCO still maintain robust 30-50% increase in thei...
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot
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Ranking and whitepaper of TOP100 HR Services Brands in Greater China 2012 by HRoot

  1. 1. ContentsSummaryOpportunities in the HR Services Market in ChinaSeek New Profit in Creative New Business ModelsBrand Marketing of Human Resources Services ProvidersCase StudyADP: From Brand Shaping to Value CreationKenexa: A Racing ElephantLumesse: A New Brand Sets SailBEISEN: From Talent Assessment to Talent ManagementSHL: A Forerunner in the Niche MarketTop 100 Brands ListCompany ProfileAbout the ListAssessment Mode and ProcedureIntroduction of Evaluation Model of the ListAcknowledgementAbout ResearchPublishing InstitutionDisclaimerCopyright Statement
  2. 2. Summary
  3. 3. Top 100 Human ResourcesServices Brands in GreaterChina Top 100 Human Resources Services Brands in Greater China 2012 003
  4. 4. Opportunities in The HR Services Market in China Deloitte, a world’s leading professional service institution, points out in its report, the “Human Capital Trends 2012”, that development is the top priority of many CEOs, while the three key strategies, i.e., emerging markets, mergers and innovations, pose myriads of HR-related challenges. Compared with their developed counterparts, burgeoning economies are growing faster and posting more opportunities, making these countries major sources of revenue, profit and talent. In the last decade, China has stunned the world scene with its steady torrid economic growth, which translates into tremendous growth potential in her HR services market. Emerging Markets Become The Industry’s New Engine of Profit The performance of global HR resources and recruitment services industry relies heavily on the economic condition and fluid effect that demand for workforces. Commercial investments, fluctuation in employment growth, and new function outsourcing produce Global HR and Recruitment Services Industry Revenue direct impact on the global HR and recruitment services industry. In 2009, many regions felt the pang of economic recession and rising unemployment, while emerging %change economies performed robust in this round of recession. Regardless of their relative small markets of recruitment services, emerging economies show stronger growth momentum than developed ones. The liberalization of labor market has played a critical role in the rise of the HR and recruitment services industry in developed countries. With the SOURCE:IBISWorld labor markets in emerging economies becoming increasingly Source: “Global HR and Recruitment Services Industry Report” 2011 liberalized, their business growth will further expand, bringing Major Markets robust revenue increase in the HR and recruitment services industry in these countries, notably East Europe, China and Serviceindustries 51.3% India. Manufacturing industries 24% Construction industries 9.5% According to the estimation of IBISWorld, a renowned Other 7.8% Public administration 6.2% research company in the US, in 2011 the global HR and industries Agriculture industries 1.2% recruitment services industry posted USD513.2 billion in revenue, showing a 2% decrease from the previous year. However, the rebound of the global economy will fuel the Source: “Global HR and Recruitment Services Industry Report” 2011 increase of the revenue of this industry. As it estimates, in004 Top 100 Human Resources Services Brands in Greater China 2012
  5. 5. 2012-16, the global HR and recruitment services industry will achieve an annual growthrate of 3.5% and hit USD610.3 billion in five years, while two-thirds of the growth will duefrom temporary placement. In developed economies, recent business increase in theirHR and recruitment services industry mostly came from their services sectors. Duringthe recession, the HR departments of enterprises outsourced part of their functions toprofessional HR management services.Although professionals in the industry anticipates a steady increase back to the globalHR and recruitment services in the next five years, this new round of increase will bedifferent from the pre-recession scenario in its nature. The emerging markets will be themajor driving force while major sophisticated markets will lag behind due to their flaggedeconomies and slow increase. In the next five years, many mega providers of HR serviceswill seek opportunities in emerging markets and they will push forward their businessesin developing countries, e.g., China, India, South America, Southeast Asia, Africa andMiddle East regions. In some countries, however, the development in this field relies onthe reforms in labor markets and government legislations.IBISWorld estimates that due to the increase in the demand that once gave way to cost-cutting in the recession era, the profit margin of the HR and recruitment services industrywill start to rebound. However, premier-level competitions based on pricing will ultimatelycurb the expansion of the profit margin and make the growth a steady one. In five years,the profitability of the industry will return to the pre-recession level. Emerging marketswill see major breakthrough in their revenue and profit increase, fueling the continuousglobalization of businesses of the major players and their exploration and search ofemerging markets. At the same time, major clients of service providers will also globalizetheir demand. The mergers in the industry will intensify, particularly in those countries andregions that are complementary to the current major markets. Top 100 Human Resources Services Brands in Greater China 2012 005
  6. 6. China Become The Engine of World EconomyOn June 1, 2012, the financial markets in Shanghai and Tokyo kicked off the direct transactions betweenthe RMB Yuan and the Japanese yen. The rapid rise of the economy of China and of her influence providessolid foundation for the globalization of the RMB. According to the data of the State Statistics Bureau, from2003 to 2011, China posts an annual economy growth of 10.7%, versus the average rate of 3.9% worldwide.The 12th Five-Year Plan of China stresses on the restructuring of her economy and focuses more on theupgrading of industries and “green growth”, to guarantee the steady and sustainable development of hereconomy. The World’s No. 2 Economy Maintains Rapid and Steady Growth According to the data of the State Statistics Bureau, the economic volume of China occupies an ever- increasing proportion in the gross volume of the world, from 4.4% in 2002 to some 10% in 2011. In 2010 China was ranked the second largest economy in terms of volume, and it maintained this position in 2011. In the composition of the economy of China, state-owned enterprises occupy a lion’s share. Among the Top 500 companies of China in 2011, 316 were state-owned enterprises, topping over 60% of the total. The National Institute of Economic and Social Research claims in one of its papers that the total GDP of China will overtake that of the US and it reaches the conclusion that, based on the annual growth rate of 8% of China and 3% of the US, the emulation will occur in only nine years. The tertiary industry occupies an ever-increasing proportion in the national economy of China. The 12th Five-Year Plan proposes the gross added value of the tertiary industry account for 47% of the GDP volume by the end of 2015, while the ratio in Shanghai already topped 57.9% in 2011. In Q1 of 2012 the added value of the tertiary industry reached RMB4,962.2 billion, or an increase of 7.5%. Lu Zhongyuan, Deputy Director of the Development and Research Center of the State Council has revealed that by 2020, the tertiary industry will occupy a dominating 51% among the three industries, almost 10% higher than the second industry. As a branch of the tertiary industry, the HR services industry will certainly benefit from the trend. With the upgrading of the industries in China and its shift of focus to the west, the “migration” of labor force from the west to the east will gradually fade out. A survey by Roland Berger, a world’s leading strategy management consulting firm, shows that the long-running, large scale enterprises tend to further increase its investment in China; many overseas enterprises voice their intention to move their investments to the middle and west regions of China. Statistics of the Ministry of Commerce of China suggests that the amount of foreign capital actually used in Jan.-Apr. 2012 was registered USD37.881 billion, and among it the middle regions took USD3.05 billion, an increase of 12.6% compared with the same period of last year. Nowadays, not only the domestic HR services institutions but also their overseas peers have extended their network to the middle and west regions of China. For instance, Manpower Group, a global pioneer of HR resolutions, has established its office in Chengdu, and Kenexa, a comprehensive HR resolution provider of international renown, has also set up its regional headquarters in west China.Expanding Enterprises Crave for Upgrading and TransformationIn 2011, the gross revenue of the Top 500 enterprises of China hit RMB36.31 trillion, showing an increase of31.6% over the previous year; while the gross profit scrambled RMB2, 083.9 billion, overtaking the growth006 Top 100 Human Resources Services Brands in Greater China 2012
  7. 7. amount of revenue and capital increase. In 2011, the gross revenue of China’s Top 500 was only 44.8% ofthat of the US Top 500; the number of Fortune Global 500 companies has jumped from 11 to 58, rankingChina as the third in the world.Compared with first-rate companies in the world, Chinese companies lag behind on many aspects. It isfound that 80% of the world R﹠D investment fund, 70% of the innovations, and 60% of the technologytransfers are done by Global 500 companies. However, the 58 enterprises from mainland China onthe list, spanning 23 industries, are characterized by their monopoly on resources, scale of economyand advantage in labor cost. With the development of global industrial specialization, the competitionsbetween enterprises mainly assume the forms of competitions for both supply chains and industry chains.It is definitely necessary for growth-seeking Chinese enterprises to expand overseas. Transnationalityindex of 500 enterprises in China reached only about 10%.In 2011, the increase rate of gross revenue ofthe overseas branches of China’s Top 500 hit 53.55%, while the increase rate of gross overseas capitalreached 38.9%, while the total overseas staff has expanded by 35.48%. The economy of China is now atthe critical turning point of shifting its focus from quantity to quality, from manufacturing of low added valueto innovation of high added value.Waves of Mergers Surge HighMergers are basically the fastest way of business expansion, but they are not mere games of numbers.Enterprises are facing challenges of how to effectively use the cultures, leadership and talent, and how toimprove their return on investment (ROI). In 2011, the dynamics and transaction volumes of mergers hit a Development trend of the merger market in China, 2006-2011 record high on the Chinese market, which saw 110 overseas mergers, an increase of 93.0% compared with the previous year. In the 2006-2010 period, the number of merger- exercising enterprises among China’s Top 500 increased from some 130 to 182, while the number of enterprises that underwent scale recombination rose from 408 to 1,112. A survey of Grant Thornton, a renowned accounting firm, shows that in 2012, 33% of mainland Chinese enterprises hope to expand through mergers in the next three years. Gross amount of mergers(USSM) Number of merger cases A survey of the global accounting firm Ernst & Young shows that China remains the most attractive country of Source: zdbchina.com investment. Many Chinese enterprises are considering merger opportunities in the crisis-stricken euro-zone. Among the interviewed enterprises, 42% of them are considering mergers, almost twice the rate of 22% among global interviewees. Top 100 Human Resources Services Brands in Greater China 2012 007
  8. 8. Multi-National Companies Make China ATesting Ground for Operating Model ShiftThe research of Deloitte suggests that, with the rise of status e.g., their work methodology, staff and their positions, andof emerging and developing economies as consumption organization patterns. Enterprises need professional HRmarkets and talent sources, companies worldwide, in services institutions to help them cope with their challenges.order to continue their cost-cutting effort, are gradually As a leading player among emerging markets, China will beaccepting new, global operating model With this in fashion, a testing ground for global operating model of multi-nationalenterprises should reflect on all aspects of their operations, companies, where a new round of demand for HR services is slated to erupt. China’s HR Sector Undergoes ompa nies D oing Continuous Legal Adjustments ode ls of C ntries Opera ting M nt Cou The HR services industry in China is a highly open market tsid e Pare arkets in ess ou nal Mo del): m that sees ever-strengthening management. This is an Busin rnatio te arket in the m del (In t to the ve Mo subjec important guarantee for the sustainable, healthy development Creati orld are to f the w region the res : each nt cou ntry; tional Model) of the HR services market. At the same time, the policies pare Na (Multi- Model ntly; e and regulations that govern the labor force market are United pende n of th ess inde gratio s busin bal inte nd runs it ting M o del: glo ing front a strengthening, giving better protection to employees and (includ l Opera e sse s ntry is just Globa r busin nt cou increasing the risk and cost of violations, hence enterprises n of majo th e pare o peratio ), and nctions lobal-w ide. back s tage fu rkets g need more professional assistance from HR services us ma th e vario one of institutions. HR Services Industry Highly Open in China In 2006, the Ministry of Personnel of China sanctioned the Ranking Company Annual YoY increase Operation Profit revenue ($million) rate profit ($million) margin absolute control by foreign-invested companies over the 1 24821.71 17.09% 887.44 3.58% Shanghai Pudong Talent Agency, lifting the percentage 2 22006 16.6% 524.2 2.38% ceiling of 49% previously imposed on the equity ratio. So 3 21185 14.4% 317.77 1.5% far, the world’s Top 10 HR services companies have already 4 9879.50 10.6% 1930.30 19.58% entered China, and the domestic HR services providers are 5 5096 22.6% 118.2 2.3% also growing strong in fierce competitions. 6 4950.3 12.13% 47.7 0.86% HR Industry Standardizes Management 7 4471.46 35.15% / / 8 3782 8.7% / / Specifications for Executive Search Services, the first 9 3776.98 19% 250.22 6.6% national standard of the HR services industry in China, was officially approved and promulgated by the State General 10 3259 36.5% 313.16 1.5% Source:<Global 50 HR Services Providers>  Administration of Quality Supervision, Inspection and Quarantine, and it started to take effect on January 1, 2011. The Specifications regulates on the qualifications, conditions, flow, requirements and quality control of executive search services, applicable to institutions of all kinds at all levels008 Top 100 Human Resources Services Brands in Greater China 2012
  9. 9. that are doing HR services and executive search, and The Era of Cheap Labor Has Goneto management consultancy firms that perform relevant Researchers estimate that in 2012 over half of the importsbusiness. will be bought by emerging markets, which are widelyAmendments of the Law on Labor Contracts, proposed by considered main engines that power the future development,the NPC Financial and Economic Committee, regulate labor profit and talent. Emerging markets in developing economiesdispatch in a strict manner. Experts say that China may have long been considered the source of cheap labor.introduce industry licensing, access audit, and risk margin And now, emerging markets are also providing high-valuesystems to increase the threshold of the industry, and the skills such as R & D, knowledge processing and advancedanti-risk ability and legal liability of relevant companies. analysis.SASAC will further regulate the management of dispatchedpersonnel in enterprises directly under the control of the Corporate Talent Pools Keep Globalizingcentral government, and it will take measures to include the In the past decade, talent pools of enterprises maintaincost of dispatched personnel in the total salary budget. The their globalization trend, and enterprises no longer limit theirrevised version of the Regulations on Labor Contracts of business to overseas manufacturing, transactions and callJiangsu Province stipulates that dispatched personnel shall centers. Now enterprises have started to use local talentnot exceed 30% of the total number of employees, and the in their R & D, advanced analysis and other high-valueceiling ratio is 50%. activities. In recent years, China has promulgated various policies to encourage overseas companies to establishRegulations On Labor Market Improve their R & D centers in China. The support of policies andChina is improving its laws on human resources, and many reasonable payment for native R &D personnel havepublic welfare issues have been interpreted in the form prompted more and more foreign-funded companies toof laws. In 2011, China formulated its 12th Five Year Plan establish R & D centers in China. For instance, the world’sfor Economic and Social Development of the PRC, and leading electronics and electric company Siemens hasrevised her Individual Income Tax Law. On July 1, 2011, the established 16 R & D centers in China.Social Insurance Law of the People’s Republic of China, thefirst comprehensive law in the field of social security, was Demographic Dividend Is Disappearingimplemented, and it has established a broad coverage of The demographic dividend that once powered China’s rapidsocial security system. In 2012, the Special Rules on the economic growth may be disappearing. A report by theProtection of Female Employees were promulgated and China Social Science Academy suggests that the country’simplemented, and the revision to the Law on the Protection working age population will undergo negative growth inand Control of Occupational Diseases and the Law on the 2017-18, and as a result, China’s labor force demand andNegotiation and Conciliation of Enterprise Labor Disputes supply relationship will be further reversed, and the wages ofare already put on the agenda. ordinary laborers, especially migrant workers, will see a rapid increase. As of April 26, 2012, 32 cities and provinces acrossChina will establish the normal growth mechanism of the country have raised their minimum wage standards, thethe minimum wages, and the minimum salary will refer highest being up to RMB1,500 per month. The era of cheapto the local minimum living cost of employees and their labor in China is gone and will never come back.dependents, consumer price index and other factors. The2011-2013 Working Plan on the Promotion of Collective The Quality and Performance of Talent SeeWage Consultation of the All-China Federation of Trade Significant IncreaseUnions requires that, among the Global 500 companiesthat have trade unions, 80% of them should establish their The survey of 2010 National Human Resources showscollective wage negotiation mechanisms. that the building of all types of personnel has achieved remarkable success, and personnel have contributed to Top 100 Human Resources Services Brands in Greater China 2012 009
  10. 10. 26.6% of the economic growth. By the end of 2010, the country had boasted a talent pool of 120 millionpeople, or 11.1% of the total human resources. Among them, executive personnel have reached 29.798million, and the percentage of R & D personnel per 10,000 laborers has reached 33.6%. The highlyskilled personnel have accounted for 25.6% of the skilled laborers, and 12.5% of the prime working agepopulation have received higher education. Technological Innovation Is Inevitable To The HR Services Industry The profit due from technological innovation is largely determined by social opinions, hence it is necessary to do detailed market segmentation with new methods and skills that target a certain proportion of the population. The business models that have proved successful should be modified before their application to underdeveloped countries can also succeed. Technological innovations can dramatically restructure an industry, to such a degree of weakening or even eliminating the competitive edge of a company. Social media and cloud service have become a necessary part of our daily lives, as they not only change the operating models of enterprises but also make their impact on the delivery method of HR services and the direction in which HR shift is heading for. Currently, most HR services institutions start to use mobile app to deliver information and do market distribution, and cloud computing and SaaS (Software as a Service) are becoming increasingly popular. Technological innovations are dramatically restructuring the industry, to such a degree of weakening or even wiping out the competitive edge of a company. However the ultimate impact of technology and the profit that innovations can bring are largely decided by social opinions. In the Chinese market, cloud recruitment system, the mobile learning platform has emerged. The impact of new technology for human resources services market has been showing up. Deloitte points out in its “Human Capital Trends 2012” that the human resources industry faces two key tasks, e.g., the fulfillment of overall development goals and the improvement of the work efficiency of human resources. Enterprises expect to realize the improvement of work efficiency of human resources and strengthen the control of HR risks with the benefit of professional HR services structure. In China, thanks to the rapid and steady economic development and better environment of human resources services, the huge potential of demand will be gradually released, a trend that will make China the largest HR services market global-wide in the next 10 years. ● Economic restructuring and industry upgrading will bring tremendous challenge and opportunities to HR services institutions. ● Multi-national companies’ shift in operating models will bring a new wave of opportunities to HR services companies. ● SOEs and private companies will increasingly become an important customer base of the HR services market. ● Corporate mergers and acquisitions, the HR support of the “going-global” strategy will create new demand for services. ● With the industrial focus shifting to west China, the focus of HR services institutions’ business will also move westward.010 Top 100 Human Resources Services Brands in Greater China 2012
  11. 11. Seek New Profit in Creative New Business ModelsWith its iconic iPod and iTune online store, Apple has created a brand newbusiness model and established itself as a dominant player in the market ofonline music. With its subscription policy, Zipcar, an American online car-sharingcompany, provides on-demand vehicle rentals on hourly or daily basis, liberatingurban dwellers from the costly private ownership of cars. In recent years,creative business models are reshaping the landscapes of various industries onunprecedented scales and at unimaginable speed. So is the HR services industry,as a new array of products and service models are popping up on the market.Creation of business model is the most essential innovation of an enterprise,without which it is impossible for any managerial or technological innovation tosustain its development or make profit. Any business model is a 3-D one formedby customer value, enterprise resources and abilities and profit-making method.Accenture, a global leading management consulting and outsourcing company,believes that a successful business model has three characteristics: they areinimitable in its unique value, down-to-earth, and cost-savvy. Total Solutions: A Mixed Model Pursued by Industry Leaders In recent years, the service model of integrated solutions is gaining increasing recognition by many leading companies in the HR services industry. The model, dubbed as “vertical stack” in the IT industry, provides everything clients need—from hardware to apps—so that the stratification can allow service providers to squeeze more efficiency: server, operating system, database, middleware, and application software. Fundamentally, the HR market has three resources in total, i.e., outsourcing, consulting and IT, which used to be independent and separate from each other but share the same client resources. At present enterprises’ existing HR systems are usually based on different 统一解决方案 hardware and operation platforms, so that the modules of the same Unified 整合解决方案 Integrated Solutions business system or different business systems cannot share information Solutions 点(单一) 解决方案 or flow smoothly, leaving a divided operation process that requires extra Point Solutions human engagement and lower efficiency. Enterprises should formulate a 手工处理 Manual consistent basic business information system and an effectively running Processes hierarchical information system, smoothly integrating the separately built business application systems into an organic whole. Therefore, for HR services providers, they can only mobilize their client resources and create the barrier for counterparts when they integrate the resources of outsourcing, consulting and IT. Top 100 Human Resources Services Brands in Greater China 2012 011
  12. 12. Total solutions not only improve the barriers to competition, to keep the standardized process, work flow, informationbut also achieve a synergistic effect between businesses, flow and delivery at a relative high level. When the businessthus significantly improving the overall competitiveness expands its scale, the added manpower will reduce the profitof the enterprise. This all-inclusive value chain is not only margin close to zero. If a company can provide total solutionsreasonable in terms of business model, but also driven by that group RPO, recruitment process management software,the demand of clients. Provision of a single service is usually recruitment management consulting and employer brandonly piecemeal and stop-gap but cannot fundamentally fix communication, it will create more value for its clients. Forthe problem. Another profound reason is that the business HR services providers, integrated solutions can improve themodels of HR services industry also requires of internal synergy between different businesses, share the resourcesintegration. If the recruitment process outsourcing (RPO) of customers and products, and increase profit margins.is handled by manual processes rather than a strong Those who can make every effort to bring down the cost ofmanagement system of recruitment process, it is impossible customers and maximize their value can achieve the best benefits. The China International Intellectech Corporation (CIIC), China’s largest HR services company, has completed its layout of total solutions, spanning its businesses from HR BPO, consulting, assessment, software, training, to head-hunting. Through internal integration, it has entered the phase of integrated solutions and is heading for united solutions. Among overseas companies, Kenexa is a trailblazer of this business model. Through mergers and acquisitions, it has proved to be one of the few enterprises in the HR services industry that can provide all- chain solutions. Now many companies in this industry are aware of the value of diversified services, and they are taking urgent measures to expand their business areas in an effort to achieve their business mix. For instance, ADP has emerged from a payroll and benefits outsourcing company to a comprehensive solution provider of process outsourcing and integrated talent solutions. Korn/Ferry International, a head-hunter of international renown, has extended its services from head-hunting to assessment and consulting, among others, while Randstad, a world- renowned talent dispatch service agency, can already provide executive search, dispatch and RPO services. ● ADP realizes diversified services In 2012, ADP announces its acquisition of The RightThing, the largest American RPO company. In 2012, ADP introduces its critically acclaimed small enterprise payroll management platform on iPhone and Android smartphones. In 2012, ADP announces that it has over 150,000 small enterprises are using its cloud-based creative online payroll management solutions. In May 2012, ADP announces its launch of talent management system services, and unveils its total solutions, a trailblazing package in the industry that includes talent recruitment, performance management, payroll management, succession management and learning management module. ● Korn/Ferrry International’s Mutual Complementary Model The internationally renowned head-hunter Korn/Ferry International has recently announced its milestone accomplishment of the completion of its1, 000,000th executive assessment. The company is now providing assessment of Decision Styles Assessment, via EDGE, Choices Architect, LFT, Voices, Prospective Assessment, SIE, Coaching Effectiveness Survey and other products and services related to reviews and researches.012 Top 100 Human Resources Services Brands in Greater China 2012
  13. 13. ● The services that Korn/Ferry International provides include:• CEO and executive search• Executive coaching• Talent management and leadership consulting• Managerial talent assessment● Randstad’s Total SolutionsRandstad has evolved from a professional agency of talent dispatch to the world’s largest comprehensive HR servicescompany; it seeks to provide enterprises with one-stop HR solutions: from short-term employment to recruitment of long-termemployers, from HR outsourcing to position and business outsourcing, from single services to comprehensive HR solutions. Solutions Talent Demand Basis of Charging Talent Search Middle/Senior Commission Level Managerial Talent Dispatch Junior Level Talent Project Fee RPO Middle/ Junior Level Talent Commission, Annual Salary or mixed basisCloud Computing Has FarReaching Impact On HR ServicesIndustryWith the wide spread of the cloud computing concept,almost all the info-technology companies, those of hardware,software or platform technology, are all trying to embraceit. Forrester Research Inc. estimates the market volume ofcloud computing to top $241 billion by 2020. The entire HRservices market is enveloped by “clouds” of all kinds: cloudrecruitment, cloud training, cloud assessment, among others. longer necessary for people to buy power generatorsWhat is cloud computing? It is an Internet-based super themselves, but just buy the power that a large power plantcomputing model through which thousands of computers produces and channels to the grid. It means that computingand servers form a computer cloud in the distant data center. power can be circulate like gas, water or electricity, whichThis enables enterprises to switch resources to their apps, can be retrieved easily and at low prices. The only differenceand visit computers and storage system on demand. It is lies in its net-based transmission.a product of the development and integration of traditionalcomputers and web technologies, such as grid computing, The resources in the “cloud” can be infinitely extended fromdistributed computing, parallel computing, utility computing, the customer’s end, and they can be retrieved any moment,network storage technologies, virtualization and load used on-demand, extended when necessary, and paid onbalances. the basis of the amount of use. Its contents mainly include: Infrastructure as a Service (IaaS), Data-storage as a ServiceCloud computing serves several consumers through a multi- (DaaS), Platform as a Service (PaaS), Software as a Serviceuser model, comparable to the way of using electricity: it is no (SaaS), cloud safety and virtualization, etc. Top 100 Human Resources Services Brands in Greater China 2012 013
  14. 14. Why Cloud Computing Rules?1.FasterCloud computing pools computing resources together, making the use of cloud apps comparable toowning a much-enhanced mega-computing power supported by thousands of computers.Users do not have to prepare complex hardware infrastructure and application software, rather, they canaccess the resources of cloud computing via the Internet or the Intranet in the enterprise. The data ofcloud computing is distributed to various data centers across the world and they can be available anytimeand anywhere, making it unnecessary for enterprises to verify the data and minimizing the redundancy.Cloud computing can speed up the response to business and delivers higher flexibility. For example, whenan enterprise needs to use more storage space or more powerful computing capability, just like at the peakhours of electricity use, users can conveniently apply, allocate, and obtain on the net according to theiractual needs.2.Cheaper The safety of software is based on various dimensions, systems, personnel, hardware, software and the Internet.Cloud computing also boasts more flexible payment methods, Although based on the Internet, cloud computing alsoand it usually is charged on the basis of actual use. Annual transmits data through the net in the process of using, butrental paid by installment replaces one-off purchases at high these transmissions are based on highly strengthenedprices lower the risk in decision-making and risk-binding and encryption measures, certificates, SSL, etc., to guarantee theenhance the transparency of the cost. absolute safety in the transfer process.Through long-distance visit via the net, enterprises can Cloud computing boasts strict internal control systemssave complicated process of software implementation; they that involve policies, personnel, legal affairs, and internaldon’t have to update and maintain systems themselves, but data risks, compounded by hardware security facilities likecan use flexibly without the expenses of maintenance and powerful firewalls, all combine to guarantee the safety of theupgrading. system in terms of hardware. Under the traditional model,3.Better servers running HR software are on Internal LAN. The latter is mostly connected with the Internet and the likelihood ofUsing traditional software models, 70% of the IT budget is being attacked is no lower than that of the facilities of thedevoted to the maintenance of the existing system. Every cloud computing providers, while their security measures areone dollar of investment in IT necessitates 6-8 dollars in the far inferior. Just consider that in the past people buried themaintenance, upgrading and customization. The room for gold bar they had bought under the ground of their homes,innovation in an enterprise is eroded by the maintenance while now it is common knowledge that the safety depositof the existing system. With cloud computing, enterprises boxes in the banks are even safer. Similarly, in most cases,can focus the greatest benefit of limited resources on their the data are safer when stored in the data bases of cloudcore businesses, and support their quick innovation in their computing providers than stored on the servers of Internalbusinesses. LAN.Cloud computing can help with the exploration of new Cloud apps have been widely used in daily lives; for instance,business. Their flexible expansion can help enterprises the iCloud of Apple can automatically back up the mostshorten their development cycles without much investment. important data on iOS5. In the future, more and more data will be moved to the cloud.4.Safer014 Top 100 Human Resources Services Brands in Greater China 2012
  15. 15. SaaS Reshapes HR Software IndustryOn the information superhighway of the Internet, software is comparable to vehicles onthe highway, which carry the “goods” that an enterprise really needs, i.e., contents, expertknowledge, and services. It should be understood that the cloud only improves the condition ofthe highway, but cannot make the vehicles better. The process of cloud computing only movesthe software from an ordinary server to a virtual server in the cloud, but brings no change to thefunctions, logic layer, presentation layer or the data structure.However, the software based on the SaaS of cloud computing is absolutely reshaping the HR-related software industry, as it provides a brand-new business model, that is, service on demand,and thus overthrows the permit-centered traditional business model of software.Compared with the “firm sale” model typical of the infrastructure of C/S (Client/Server) or B/S(Browser/Server), SaaS only needs users to pay service fees as per the use amount on monthlybasis, thus enjoying obvious advantage in cost, speed of upgrading and compatibility.Traditionally, the cost of using software includes that of the intellectual property, a variety ofsoftware runtime program and the environment that support the whole software, such as plentyof infrastructure and development tools used by developers. In most cases, in addition to thecost of intellectual property, each piece of software of the user is duplication of investment.Differently, users of SaaS only needs to pay for the intellectual property but leave all the othersto the expense of SaaS providers, that is, they don’t have to spend much on hardware pieces,operating systems, database or licenses of software. The Difference Between SaaS and C/S,B/S C/S、B/S SaaS Way of purchase Licensing, one-ff purchase On-demand rental Requirements on High-capacity server, net equipment, storage equipment Internet only hardware Server operating system, database Browser Requirements on Yes No software N/A or paid upgrading Zero cost, smooth, frequent upgrading Self-maintenance Software licensing fee; Service charge Upgrading and flexibility Software maintenance fee Cost Technical support fees Human cost (system maintenance personnel) Software and hardware cost Upgrading cost Risk cost (in case of failed selection) Requirements on IT Yes No. Enterprises can focus on capability their core businessesAnother profit-making way of the corporate software industry is the provision of updates afteryears of development and an annual maintenance charge for fixing bugs. With the adoption ofthe SaaS rental model, enterprises do not have to have technical maintenance personnel, astechnology upgrade is left to SaaS providers. Users can focus on their businesses assuredly.Salesforce.com, a leader in the customer relations solutions, is exemplary of SaaS providers.Founded in 1999, the company is the earliest champion of online rental model, and is dubbed a Top 100 Human Resources Services Brands in Greater China 2012 015
  16. 16. “software terminator” due to its motto “terminating software.” HR Software Giants Are Embracing SaaS andBenefiting from its multi-renter model, freely payment model Talent Managementand powerful system flexibility, it went public at the New York To cope with the looming threats from the SaaS providers,Stock Exchange in 2004, turning a profit in the same year. In traditional software giants are also trying to catch up in recentthe 2011 fiscal year, Salesforce.com posted a sales volume years. SAP and Oracle are switching to cloud computingof $2.3 billion, an increase of 37% over the previous year. by providing software, storage and other remote servicesNow Salesforce.com is managing customer information for (including remote data center, etc) via the Internet, and evenover 100,000 companies on different scales, and it processes spend heavily on acquisitions.36 billion deals each day for its clients. In 2012, the companyscheduled to increase its sales by 32% to $3 billion. It is In December 2011, with $3.4 billion, SAP completed itsprohibitively difficult for a traditional software company to acquisition of SuccessFactors, a trailblazer of the SaaSmaintain 2-digit growth. model in the HR software industry with 40 years’ successes and expertise in on-demand and prefabricated solutions.Workday, another subversive company in the HR software SuccessFactors has over 3,500 clients and 15 million usersindustry, helps enterprises manage human resources and of its online performance management software.finances with the software deployment model of cloud. Now,Workday is servicing some 300 enterprises, with its annual After the acquisition, SAP put over 5,000 employees ingrowth in user base close to 100%. Around half of its clients charge of the design, construction and implementation ofcome from its rivals like Oracle or SAP. In the 2011 fiscal perfect cloud solutions. Its newly established cloud computingyear, Workday posted $300 million in revenue, twice the department services over 17 million users. In May 2012,amount in 2010, and it is expected to go public at the end of SAP announced its brand-new cloud computing strategy,2012. which introduces cloud computing solutions related to four business lines, e.g., personnel, capital, clients and supplier016 Top 100 Human Resources Services Brands in Greater China 2012
  17. 17. management. Among them the Employee Central, the core HR solution of SuccessFactors, is incorporatedinto the cloud computing solutions that face personnel and capital.At the same time, SAP also internally uses the SuccessFactor BizX kit as its new human resourcesmanagement system. The kit can simplify the HR management process of SAP employees andmanagement, helping managers integrate their daily work into the corporate strategy and providing staff withmore control over their career development tools.Oracle, a competitor of SAP, is also strengthening its layout and has established advantages in the cloudcomputing market through acquisitions. In February 2012, Oracle bought Taleo, a talent managementcloud computing company, at a purchase price of $1.9 billion. Taleo’s solutions can enhance the ability ofassessment, recruitment, training and employee deployment of enterprises of all sizes, and thus increasesthe efficiency of business. Now over 3,600 enterprises across the world are using Taleo’s products to handlerecruitment and performance assessment. Taleo’s talent management platform is celebrated for its strongconfigurability and usability, achieving a whopping 99.9% efficiency rate when running on world-classinfrastructure.Oracle’s acquisition of Taleo is considered a responsive move to SAP’s acquisition of SuccessFactors.However, the explosive growth of the talent management software market is another reason for Oracle tobuy Taleo. As Bersin & Associates investigates, the market for online recruitment management softwareincreased by over 15% in 2010. Through the acquisition of Taleo, Oracle has filled in the gap of its ownproduct line.The full range cloud computing solutions that Oracle provides include sales automation, HR, talentmanagement, social networking, database, and Java, all being part of the public cloud of Oracle. On June 7,2012, Oracle issues a cloud-based package that includes some 100 auto-service applications and platformservices, which charges according to subscribers’ use amount.The acquisitions of SAP and Oracle also highlight another trend in the HR software industry: TalentManagement System (TMS) rules. Different from HR management system software that is based on HRmanagement and centered on data, talent management software is based on industrial and organizationalpsychology and cares more about the people and the processes. A complete Talent Management Systemshould include modules like talent planning, recruitment, payroll, performance appraisal, succession, andTalent Management System Top 100 Human Resources Services Brands in Greater China 2012 017
  18. 18. training. Representative companies of the previous kind are At the same time, the paper also points out that the features,Oracle, SAP, yonyou, Kingdee, while those of the latter kind cost and service of HRMS are the major incentives forinclude Kenexa, Taleo, Peopleclick, Pageup People and enterprises to implement them. The rental model of SaaS canBeisen. flexibly configure the features, cost and service requirements that enterprises need, and thus tremendously shrink theirThe talent management software industry has no lack of cost. In the HR market of China, providers of cloud-basedmergers and acquisitions. But given their scales they cannot SaaS have great prospect and huge development potential.subvert the entire industry. This time, however, the entry ofOracle and SAP may incur a major share-out to the industry. Social Media Reshapes theThrough mergers and acquisitions, Oracle and SAP haveestablished their competitive edge in cloud computing Recruitment Marketservices, e.g., better understanding of the market and Any human activity is fundamentally information activity; theexpertise in implementation. For the acquired enterprises, difference in the delivery media and management methodthey can tap into the huge user base, capital, branding of of information flow means the difference in the informationOracle and SAP and increase their own strengths. you receive. From the agrarian age carved by agricultural Acquisitions in the HR Management Software Industry equipment to the industrial age made by machines to the Acquirer Acquiree Time of Acquisition net era created by computer technology, each important Jambok March 2011 SuccessFactors technology revolution is coupled with media revolution. The Plateau April 2011 Taleo Learn.com September 2010 entire history of human civilization is arguably the history ofLumesse (formerly Stepstone) Mr. Ted August 2010 the evolution of the way humans use tools. SumTotal GeoLearning January 2011 The Three Waves of Business Models of theChina’s HR Market Calls for HRMS InternetInformation technology is the prime driving force of the In 1993, the US government announced to build the Nationaldevelopment of HR management, as it liberates HR Information Infrastructure, a project that heralded the birthprofessionals from tedious affairs and thus allows them to of the Internet. Portal sites were the earliest business modelfocus on the strategic affairs of their companies. However, of the Internet. In terms of creation time, the trailblazer wasChina still lags behind developed countries in human capital Yahoo!. With the passage of time, however, the nature ofmanagement systems. In “Retrospect and Lookout of the portal sites also underwent gradual changes. They grew toHRMS in China 2011”, a paper jointly issued by ADP and be larger and all-inclusive, but their gauge also underwentHRoot, only less than half of Chinese enterprises are using dramatic changes in the later stage. Previously they wereHR management systems, and among them 30% of the HR gauged by the number of registered subscribers and click-management systems they use fall into the category of C/S through rates, but are now measured by the average timeinfrastructure and need to be upgraded. subscribers spend on them. With the Internet became faster, more popular, personalized Composition of Corporate Use of HRMS and compatible to mobile devices, new apps emerged in a rapid succession. The technology of Web2.0 brings the business model of the Internet to an era of search engine model. The essential customer behavior of a search engine Not clear is “to obtain”: obtain materials, pictures, music and more. C/S Through search, the act of “obtaining” is fulfilled. Therefore, B/S the value of search engine itself is the value of media. SaaS To maximize the value, the act of obtaining should be continuously fulfilled. In this stage, Google is indisputably a representative of the search engine model.018 Top 100 Human Resources Services Brands in Greater China 2012
  19. 19. With the development of the web technology, social The most significant discovery in social networking is itsnetworking sites appeared and developed by leaps congeniality, i.e., the tendency of mutual relation betweenand bounds. The IPO of Facebook suggests that social people of similar temperaments. Such similarity not onlynetworking services (SNS) model has become the third determines the frequency of mutual relating and thebusiness model of global Internet following those of portal discussed topics, but also determines what information theysites and search engines. seek as an individual in the network. Congeniality suggests frequently relating people are similar to each other, and theyInfluences of Social Media On Interpersonal may consume a larger quantity of identical information. TheRelationships less-relating individuals are more likely to have differencesPrior to the emergence of social media, the distribution of and consume a larger quantity of different information. Theinformation followed an end-to-end pattern, but after that it information is spread through the network. Strong ties aregave way to the fission pattern. similar to each other and more likely to visit the same sites, while weak ties are more different and tend to visit differentIn the 1970s, sociologist Granovetter first proposed the websites.concept of strong / weak ties in interpersonal relationships.He has discovered that in a highly developed commercialsociety, people within communities/organizations interactsfrequently and exchanges often and thus forge typical strongties, while the ties that transcend communities/organizationsare far weaker and apt to be neglected. However, studieshave found that in either job hunting or other social activities,the information obtained through strong ties is invariablyrepetitive, while weak ties can better transcend the sociallimit to obtain differentiated information and other resources.Granovetter illustrates how social network inter-connectswith information obtaining. When one person interactswith two close friends, the latter may also strike up mutualcommunication. So when people tend to forge closely-knitcompact groups, all those in the group may relate with each The network effect is apparent n the distribution ofother. We all relate to the core group forged by strong ties information. Although a person is more likely to share aand frequently communicate with the people in the group, single message from a close friend, the collection of weakwhile the less-related weak ties also exist. ties shoulders most of the responsibilities of information distribution. It is more likely for people to share information from strong ties, but one of the whole, most of the influences still come from weak ties. Top 100 Human Resources Services Brands in Greater China 2012 019
  20. 20. Six Degrees of Separation Theory Social Media Undergos Explosive GrowthIn the field of mathematics there is a “Six Degree of In the US, social media represented by Twitter and FacebookSeparation” theory, also known as the “Small World” theory. have gradually evolved into a basic application on a par withIt refers to the idea that there are not more than six people search engines, portal websites, and e-commerce. The third-between you and a stranger, or in other words, you can get party applications stemming from social media platformsto know a stranger with no more than six people. have led to a brand-new social business changes. In China, since 2009, social media has been presenting a growthThis phenomenon does not mean that any person-to- spurt. New media of this kind not only penetrate strongly,person relationship has to be set up with six layers, rather, but also give rise to a brand new revolution in distribution. Ait telegraphs such an important idea: any two strangers can recent survey on 5,700 Chinese Internet users find that therelate to each other with certain connections. Obviously, residents in first-, second-, and third-tier cities in China boastgiven the difference in the way and ability of networking, a 95% registration rate of social media. In addition, Chinaopportunities to realize personal expectations may also vary also has the most active user group of the world, as 91% ofsignificantly. the interviewees say that they have logged on social mediaSocial networking websites are tellingly on the rise. Recent in the past six months, a rate much higher than the 30% ratestudies show that one can connect with another person in Japan, the 67% rate in the US, or the 70% rate in Korea.with 4.74 persons or fewer. The advent of social networks At the same time, the expansion speed of Chinese Internetobviously makes person-to-person relationship closer than users is also unrivalled in the world. By December 2011,ever. there were 513 million Internet users in China, while the number was 67 million in Germany, 121 million in India, and 245 million in the US. China already has the world’s largest population of Internet users. Total Internet users1in December 2011 Internet penetration, % Million Global China2 US India Japan Germany UK France Korea Australia 1 Including people accessing the Internet via personal computer and mobile phone; data as of the end of 2011. 2Percentage of overall China population over age 6. Source: Internet World Status, December 2011 In addition, what dominate the landscape of social media in China is native Chinese websites. Chinese consumers’ favorite social media websites are: Qzone.com (over 44% of the interviewees say Qzone of QQ is their most frequently used website), Sina Weibo and Renren.com (19% each), T.qq.com (8%) and Kaixin001.com (7%).020 Top 100 Human Resources Services Brands in Greater China 2012
  21. 21. The most popular social media in China Social Networking Recruitment Poses Challenge To Traditional Recruitment Social networking websites are changing the marketing model of recruitment and head-hunting, leading to dramatic changes to the business model and product model. For a long time, online recruitment has been the first choice of enterprises. In China, traditional recruitment Qzone.com Sina Weibo Renren.com t.qq.com Kaixin001.com websites have long been the major channels used by enterprises. Companies make payment to the websites Source: McKinsey&Company <China’s social-media boom> and run advertisements on them, and then collect theChinese social media websites are very similar to their resumes submitted by applicants. For applicants, they canEuropean and American counterparts, but they also have only passively wait for the interview calls after they submittheir own unique features. their resumes. Under such conditions, both companies and applicants are in a “passive” state, albeit they need direct,● Qzone.com: Similar to MySpace, it allows users to interactive communications. The interpersonal functions ofestablish their own web pages to issue their updated social networking websites provide a much-needed platforminformation, photos, and video clippings. for companies and applicants.● Sina Weibo and T.qq.com: they provide many features The rise of social networking websites has established a newsimilar to Twitter, such as distribution of messages within channel for recruitment. By means of networking, it weaves140 Chinese characters, of uploaded photos and videos, and the thread of interpersonal relationships into the fabric ofexchange of messages between friends. recruitment process, and builds the ties between enterprises and candidates. Based on relationship, the data mining● Renren.com: a website similar to Facebook that originally capability of social network sites can make the informationrestricted its circulation among college students. Although it in the recruitment process more accurate. The educationalis open to the public, its user base is still largely constituted background, employment history, professional advantage,by college students and new graduates. interpersonal reputation of a candidate can be learnt at● Kaixin001.com: a website similar to Facebook that a quick glance, greatly reducing the cost of talent searchspecializes in online games at the beginning, and it focuses and background check. On the other hand, for those socialon office workers. network websites, their result-oriented advertising model proves attractive to many users, and provides justification for● Ushi.com: similar to business social networking sites like their service charges.LinkedIn and XING; it has similar peers like dajie.com andjingwei.com. In 2002, the business social networking website LinkedIn was established in the US. It seeks to provide a platform for users to build and maintain their networks, and to provide recruitment solutions and the service of customer information. With its user number snowballs, it has become a major channel for American enterprises to recruit. Official statistics of LinkedIn reveals that the Global 500 companies all use LinkedIn to recruit, which means that 100% of them are recruiting on it. Now LinkedIn has over 2.24 million Top 100 Human Resources Services Brands in Greater China 2012 021
  22. 22. registered users in China, while the number in the US is nearly 65 million. In November 2011, a latest report issued by the American recruitment website Jobvite suggests that 89% of American enterprises will recruit with social networking websites, and among them 55% will increase their budget for recruitment on social networking websites; while recommendations, recruitment on the company websites, and direct channels will be their other major channels; only 16% of the enterprises will increase their expenditure on recruitment fairs, one-third of them will cut their expenditure in recruitment fairs, third-party recruiters and head-hunters; some 64% of the enterprises will adopt two or more channels of recruitment; among the enterprises that plan to drive their expenditure in recruitment, 95% of them are using or will use social networking websites. In China, nearly one-third of Chinese enterprises are using social networking websites in their recruitments. The rise of social networking websites is posing tremendous challenges to traditional recruitment websites. Compared with the latter, social networking sites enjoy a much higher traffic than traditional ones. Facebook has the second largest traffic in the world, while LinkedIn ranks the 12th, Renren.com of China is in the 102th place. By comparison, traditional website recruitment is declining and urgently in needs of transformation. Pitted against the robust rise of social networking sites, traditional sites suffer from such problems as single mode of profitability and congeniality that have weakened their effects, and they have lost a lion’s share of their clients. According to iResearch, 51job.com, Zhaopin.com, and ChinaHR.com combine to occupy a 70%-plus share of the online recruitment market in China. However, the performances of the three companies are utterly different. Only 51job is still turning a profit while the other two recruitment giants are deep in Social Networking Sites are Shoveling Away Traditional Recruitment Sites Recruitment website Traffic Ranking SNS website Traffic Ranking The Structure of Online Recruitment Market of China Website Traffic Ranking Major Investor022 Top 100 Human Resources Services Brands in Greater China 2012
  23. 23. the red. Zhaopin.com has been losing for three consecutive years, while ChinaHR.com, after it Fiscal year Fiscal year YoY increase was wholly owned by Monster, still reported a lossAnnual revenue of RMB175 million in its earnings. According to theProfit earnings of 2011 fiscal year recently released by 51job, its annual revenue reached $205.5 million, an increase of 26% over the previous year, and Fiscal year Fiscal year YoY increase its net profit increased by an impressive 56.6%.Annual revenue Although 51job’s performance is gratifying, it stillProfit cannot reverse the decline of the entire traditional online recruitment market. Fiscal year Fiscal year YoY increase By sharp contrast, LinkedIn is rising sharply in theAnnual revenue recruitment field. LinkedIn is essentially an SNS-Profit packaged professional recruitment site, whose added value services in the recruitment field have created a sizable stream of revenue, in which “Premium Subscriptions”, “Hiring Solutions” and “Marketing Solutions” are three major income sources. In the 2011 fiscal year, LinkedIn pulled in $522.2 million in revenue, up 114% from the previous year, while its profit rose by 32% over the previous year. According to the newest fiscal report, LinkedIn earned $102.6 million in revenue from “hiring solutions” in Q1 of 2012, showing an increase of 121.6% over the previous year and accounting for 54% of its gross revenue. In the face of the tremendous challenges from business- oriented social networking sites, traditional recruitment enterprises should ride on the rising tide, to change business directions and perpetuate reforms and attempt in social networking recruitments, so that they can break the limitation of homogenization, attract committed users and embrace the era of social networking recruitment. Software Platform-Style Process Outsourcing Model Presents A Major Opportunity The HR outsourcing of “Chinese characteristics” is originally Hiring Solutions dominated by its “personnel agency” model that primarily Marketing Solutions based its income on the monthly service fees. Some senior experts deem zero service fee a general trend. However, in Premium Subscriptions Top 100 Human Resources Services Brands in Greater China 2012 023
  24. 24. spite of lower unit prices of services, giants like the CIIC, SFSC and FESCO still maintain robust 30-50% increase in theirannual sales and profits, a phenomenon attributable to the fast expansion of the market for HR resources in China, whichtranslate into quick expansion of staff in overseas enterprises and soaring profit margin from the economy of scale. Anotherunderlying reason is that the profit from personnel agency has given way to welfare outsourcing, which has become the No.1 source of profit (welfare outsourcing accounts for over 50% of the overall profit). Therefore, even zero service fee will notmake the profits of these enterprises run dry.Overseas HR outsourcing model is significantly different from the “personnel agency” model of China, as the former usesmore process outsourcing than the latter. ADP, an adopter of this model, is the most profitable enterprises in the HR servicesindustry, boasting in a profit rate of 26% and a revenue volume of $1.93 billion, an amount equivalent to half of the total of theother 49 enterprises among the Global 50 HR servicers providers worldwide. Its market value is up to $25 billion, a volumeunrivalled in the global HR services industry. In 2011, the profit margin of ADP ranked the fifth in the global HR servicesindustry. On May 22, the market value of ADP was reported$25.775 million.ADP’s big profit comes from its unique business model: ADP’s Acquisitions and Mergers Strategicsoftware platform-style process outsourcing model. Clientscan use the software platform it provides to exercise some Global talent managementself-service operations, a function that lowers the personnel solutionscost, increase the accuracy and the speed of information Strengthening its position in payroll Leading comprehensive HR and welfare BPO providerdelivery. At the same time, the model is one of the few managementtechnology-intensive, capital-light, and high cash flow Commitment to the Entry in large,businesses, promising very high return on investment. growing market market of small enterprisesIn spite of its inherent advantages in business model, the Multi-lingual & Clients, Talent, multi-currency Technology,aggressive ADP is still not satisfied. In the recent four service Channelsyears, ADP carried out 13 mergers and acquisitions. In thesecond half of 2011, ADP announced its acquisition of the In China, the Manpower Group, Randstad, Career International,world’s leading RPO company, the RightThing, a move that 51job.com, CIIC, SFSC and FESCO are bracing for competitivesecured its status as the largest RPO company globally and edges in these new models of process outsourcing.extended its business from payroll outsourcing to recruitment Various kinds of HR Process Outsourcing include:outsourcing. RPO is highly favored by HR services giant, not ● HR information system outsourcingonly because of the huge and rapid increase in demand, but ● Payroll outsourcingalso have very high potential gross profits and profit margins. ● Talent management outsourcing ● Learning outsourcing ● Recruitment process outsourcing (RPO) ADP’s Service Model The competitiveness of HR outsourcing is determined by information technology, but commercial information Payroll 0utsourcing + Social Security Outsourcing + System Platform Rental technology is undergoing massive shift and upgrading. HR process outsourcing promises high profits but also has higher Business barriers to entry, such as: Models Payroll Outsourcing Social Security + 0utsourcing System Platform + Rental System Platform Rental024 Top 100 Human Resources Services Brands in Greater China 2012

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