Be wary of HR boutique companies in Vietnam

Edit: For legal purposes, I was asked to remove company names from this post.

Since my brief consulting stint helping a previous clientin the investment sector find some employees in 2006, I have, off and on, helped companies and organizations find potential candidates and interns.   I got paid pretty good for finding some staff members for my client.  A couple other companies later hired me as a consultant to interview potential candidates.  I even joined a Vietnamese company a couple years ago and posted jobs online for their HR company.  When candidates were matched, I would get paid a couple months later.  I called it easy money back then.

Unfortunately many other people thought it would be easy money too, especially those who started their HR careers in some of the more established HR companies.  These people started their own small HR boutiques, as they call them, and started “scamming” companies and their former HR company employers.  They were able to take away clients from their previous employers.  Even better, with their friends and colleagues still inside their previous HR companies, they were still able to have access to key databases of potential job candidates.  Within a couple a months, money started to roll in as these HR boutiques were able to match previous employers’ candidates with previous employers’ clients.

It gets even better, imagine calling one of the top HR companies trying to find employees only to be told that they cannot help us.  Then right after, you get a telephone call from HR boutique that says they can help you.  Moreover, if you decide to work with this HR boutique, not only will you get a candidate, you will only need to pay a two month fee (most of the top HR companies want 3-4 months salary for matching as their fee) and to top things out, you will get a commission.  Ever wonder why the HR managers or their assistants seem  more then happy to work for the small boutiques?  Notice how the established HR companies are always described as being expensive compared to the little guys.  It is all about money.

It is also a great scam!

Even worse for companies, this scam hurts the quality of candidates they actually get as well.  HR boutiques want to maximize their profits.  Makes sense, they are a business like anyone else.   If a company will offer up to $5000 US per month for a sales management position, of course the HR boutique will want to get as much as that $10,000 US (2 months fee) as they can.  Hence, a qualified candidate from say the Philippines, Europe or the US, that requests only $2500 US per month will get their CV/resume thrown out.  The number 1 reason/excuse/justification to drop these candidates is that they were “job hopping”.  Job hoppers by definition is a person who switch jobs as least 3-5 times per year but with HR boutiques in Vietnam, a job hopper is somebody who changes jobs once a year.

I remember sending some CVs to several HR boutiques that had some job openings with their client.  I immediately got an email back saying they were not qualified or lacked the required experience.  Both worked with reputable companies and switched jobs moving up to more responsible positions which is normal in the West.  From my experience, they were great candidates.  I had a hunch so I decided to bypass these HR boutiquse and sent the CVs to the companies via my network inside these companies.  Result, both were interviewed and offered positions within a day after I sent these companies the CVs.  One accepted, got a really great salary package, higher then advertised.  The other turned down the position and nope, I did not ask for a commission.

From what I hear, this happens all the time here in Saigon.  I meet Viet Kieu, newly arrived Expats, etc., who get frustrated trying to find jobs in Vietnam.  Imagine working for Morgan Stanley overseas and being told you are not qualified for a similar position in Vietnam.  Ridiculous!

This is what is going on, though.  So what can be done?  For starters, companies and organizations should keep better track of the HR manager and force them to sign contracts with some of the more established HR companies.  Yes, this will hurt guys like me who do freelance HR consulting but this is something that must be done (though I can always be hired as an HR consultant 🙂 ).

Foreign companies may also want to assign a foreign staff to help find candidates as well.

For the top HR companies in Vietnam, they will need to initiated stricter security policies such as banning mobile phone use in office, restricting database access, monitor company emails while banning internet usage, etc.  All meetings with staff and clients should either be at the HR company’s office or at the client’s office.  If possible, they should try to automate the recruitment process as much as possible.  Computers are not greedy.

Until then, both candidates and companies should be wary of HR boutiques.

Note, there are some good HR boutiques out there, a friend runs one and I know a couple guys forming their own HR company as well.

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