CEO of Recruitment Firm Zhaopin Sees Strong Job Market in China
Worried about China’s slowing economy? Evan Guo, chief executive officer of Zhaopin Ltd., has more than 2.5 million reasons not to. That’s the number of job opportunities posted on Zhaopin.com, one of China’s largest recruitment websites.
Despite sharply slower growth, the world’s second-largest economy continues to create jobs, he says.
Zhaopin, which is majority-owned by Australian job site Seek Ltd., SEK.AU +2.16% chalked up revenue of $138 million in 2012 with a workforce of 3,200, benefiting from a growing economy and an increasingly Internet-savvy, job-hopping young workforce. But they also face challenges from rival Chinese job sites such as 51job Inc., JOBS -1.54% and from the rise of social networks. Mr. Guo, who previously worked at management consultancy McKinsey & Co. and helmed a state-owned enterprise in China’s logistics sector, sat down with The Wall Street Journal in his Beijing office to discuss the evolution of China’s Internet and why the models you learn at business school don’t work in China. Edited excerpts:
WSJ: What did you learn at McKinsey that has helped you in your current role?
Mr. Guo: At McKinsey you learn ways of thinking, analytic frameworks. But often they are not applicable to the entrepreneurial world in China. In the Western approach, you look at key performance indicators, you check the data. But in China you have to respond very quickly to changes in policy, what employees are thinking, often based on little data. You have to act based on gut feelings; if you act according to what the text books say, you will get it wrong.
WSJ: There is a lot of concern about the slowdown in China’s growth. How concerned are you?
Mr. Guo: We won’t see a return to 10% growth. Expectations now are for something around 7%. But that’s not a disaster. If I look at our own business, employment is still growing. High-tech, logistics, services, health care are all recruiting. We’re also seeing rapid growth in job opportunities in third- and fourth-tier cities. I’ve spoken to a lot of small firms and they are growing fast and adding workers.
WSJ: Do you see any sectors that are doing less well?
Mr. Guo: We see fewer job opportunities in manufacturing, and also in retail. Retail is worrying because the government wants to boost Chinese consumption. But when we look at how shopping malls are doing, they are not doing so well. E-commerce explains some of it, but not all of it.
WSJ: In the U.S., social networks like LinkedIn have been a major challenge to recruitment websites like Monster. How will that play out in China?
Mr. Guo: In the U.S., LinkedIn has overtaken Monster but so far it has not had much impact in China. Chinese are very practical when it comes to switching jobs. You can see that in how Chinese talk about salary. In the U.S. it’s considered rude to talk about how much you earn, but in China people are quite open about it.
Zhaopin tells Chinese job seekers what they want: “Can I get more money in this job?” LinkedIn is through social networks, so it’s very indirect.
We survey students about where they most want to work. A few years ago, they all wanted to work at multinational firms like Google and Microsoft. Now they see Chinese firms doing well and see them as more desirable, so I am not too worried about competition from overseas firms.
WSJ:Guanxi, or personal connections, is meant to be very important in China. But that’s not how Zhaopin works.
Mr. Guo: Job seekers always want the best opportunities. Guanxi can tell you about some of the opportunities, but recruitment websites can tell you about all the opportunities and give you salary comparisons. At the entry-level or the midlevel that’s important. For top executives, then it’s about personal connections again—they won’t be using the website.
WSJ: There is a wave of consolidation in China’s Internet. What does that mean for Zhaopin.com?
Mr. Guo: The Internet giants can drive big traffic, but traffic doesn’t resolve marketplace issues. In verticals like recruitment or real estate, you need deep knowledge of what customers are searching for to succeed, and that’s not easy to develop. I don’t worry too much about whether we have this business model or that business model—if I did that I would never sleep. It’s more important to think about what customers want and how to give it to them.
WSJ: How much space does Zhaopin.com still have to grow?
Mr. Guo: We are already covering 100 cities so that is already quite wide. But in terms of depth we are quite shallow, covering about 20% of the marketplace. The price employers pay to advertise with us is also quite low by international comparison, so in volume terms and in price terms we have room to grow.
WSJ: Is an initial public offering on the agenda?
Mr. Guo: We are considering an IPO in the future. That depends on capital-market conditions, our own strategy and execution, and what employees want—they see an IPO as a source of pride and a landmark for the firm.
WSJ: How receptive do you think foreign investors are to Chinese firms right now?
Mr. Guo: You have to distinguish between private and public markets. In the private markets, I see private equity and venture capital investors are hungry for deals. But there are less and less good deals and they become more and more expensive. On public markets, high-quality Chinese companies still get attention. Some big funds are interested in Zhaopin.com. But for individual investors, it’s more difficult to understand the opportunity when they can’t even pronounce the name of the firm.
Résumé
Education: Northwestern University Kellogg School of Management, 1999, with a master’s in business administration.
Career: In 1994, Mr. Guo was one of the first analysts in China employed directly by McKinsey, a firm he left as a global partner. He started a software outsourcing firm and headed state-owned logistics operation Sinotrans Air Transportation Development Co., before joining Zhaopin as chief executive in 2010.
Corrections & Amplifications
In an earlier version of this story, the credit accompanying the photo of Zhaopin Ltd. Chief Executive Evan Guo misstated the source of the image as Zhaopin Ltd. The photo was taken by Lilian Lin, a Wall Street Journal researcher.