Growth in emerging markets
As the UK, Europe and the US stand on the brink of recession, businesses continue to follow strategies mapped out when an economic recovery appeared within reach, and are under pressure to grow despite an increasingly shaky economy. This has left organisations striving for growth with fewer resources, leading many to rely on growth in emerging markets to propel their businesses forward.
This has created a dual challenge for global heads of talent. In the West organisations struggle to improve the performance of the workforce in the face of declining employee engagement and effort levels as well as cutting through high volumes of applicants to find the often very specialised skills the organisation still requires.
In the East, heads of talent management are struggling to attract enough talent in a very competitive labour market with short supply of technical and managerial skills and high levels of staff turnover.
As a result, talent managers are faced with a set of challenges that represent themselves unevenly across global labour markets and find solutions to new challenges in new markets.
Despite an influx of applicants in the West driven by a soft labour market, recruiters continue to struggle to find the right skills to meet the needs of the organisation. Corporate Executive Board (CEB) research has found that while application volume has increased by 167% since 2007, the quality of hire has actually declined by 9% in this time. According to recruiters filling requisitions in the West, 60% of applicants do not meet even the basic requirements of the role.
Asia talent trends stakes are high
Another challenge for organisations recruiting for roles in developed economies is that, unlike Asia, the talent they require is becoming even more entrenched in their current roles. Rising unemployment has made the most talented employees fearful of leaving their current roles with just 23% of those employees actively looking for a new job.
The situation is very different in Asia. For multinational companies, attracting talent in emerging markets has always been a challenge, and one that has grown since the financial crisis. Until recently, local employees favoured international companies, believing them to offer better career prospects and higher status than their domestic rivals.
Memories of the economic crisis and the rounds of redundancies made by multinationals however, means that many local employees now perceive local companies to offer more stable career paths and better prospects.
The fierce competition for talent has meant that employees in Asia are far more likely to be evaluating other job opportunities than their global counterparts.
More than half (56%) of employees in Asia report that they have been contacted by a headhunter in the past three months, compared to 24% of employees in the rest of the world. At the same time executive stress is highest in Asia, with half of Asian business leaders reporting feelings of stress compared to 38% globally. This has led to the belief that the ‘grass is greener on the other side’ with as many as 25% of leaders in Asia believing that external opportunities hold more promise than those in their current organisation, in contrast to just 9% elsewhere.
The stakes are high for international businesses operating in Asia, as their ability to capture market share will be largely dependent on the quantity and quality of their local team. A ‘one size fits all’ approach to talent across global labour markets is destined to fail. While high levels of unemployment in the West have resulted in a flood of applications for every available role, it is becoming increasingly difficult for organisations to attract and retain talent in Asia.
There are a number of ways in which organisations can address these two very different issues however.
Talent management strategies
Differentiate your sourcing strategy across global markets
When recruiting in the West, companies need to take a more strategic approach towards recruiting and move away from the mass branding they have undertaken previously to attract candidates. In Asia however, companies need to focus on promoting their employment brand, communicating their commitment to Asia, their focus on individual employment development and their overall employment value proposition.
Establish long-term workforce planning and forecasting
In many organisations staffing planning focuses on identifying and responding to current talent needs and does not address longer-term strategic gaps within the organization. In both Asia and the West companies need to think about the skills the company is likely to need in the future and to build a pipeline of candidates that will meet this need.
Focus on skills not just experience
Talent managers need to encourage hiring managers to focus on candidates’ skills rather than their knowledge, experience and education. For example, one of our members, an insurer, wanted to ensure that new hires for a particular role were qualified actuaries. Having struggled to identify candidates the company changed its approach and began hiring people with backgrounds in banking and consultancy and found their new hires to be just as effective as the actuaries hired previously.
Use succession planning to build a pipeline of external talent
Business leaders should be encouraged to consider both internal and external candidates for key roles. A number of CEB members are encouraging business leaders to identify three candidates who could fill their role, one of which must be an external candidate, helping to build a pipeline of ready candidates based on the incumbent’s own network as part of the annual succession planning process.
Building your employment brand in Asia
In addition, there are further, specific steps that companies must take to build their employment brand in Asia:
Develop local career opportunities
While most employees within multinational companies in Asia once hoped to be posted overseas, more and more employees now prefer to advance their careers at home. Companies need to design their international rotations accordingly, at the same time exposing a higher proportion of their global leaders to key Asian markets.
Provide compelling career paths
While competition for talent has meant that many employees in Asia demand unrealistic, rapid promotions, a more pressing concern is the alignment between their current role and their professional interests. Just 32% of employees in Asia express satisfaction with this currently. Creating a credible career path that charts a trajectory to personally fulfilling jobs and leadership roles, that is managed carefully on an ongoing basis, will help to reengage employees.
Be clever about pay
In order to secure the right talent, local companies in Asia are prepared to pay up to 50% more to lure employees away from multinationals. However, our research has found that despite concerns arising from the financial crisis, many employees in Asia continue to express strong preferences for careers with international companies, and so a more moderate salary increase is likely to convince employees to remain in their roles.
Develop local roots
International companies that are well established in Asia can develop many of the advantages that local companies are perceived to have. A global brand that can demonstrate strong local roots will leave companies better placed to acquire the domestic talent it needs to keep growing in Asia.
Talent gaps in the West and Asia
The talent gaps in both the West and Asia are real but not insurmountable if companies focus on tailoring their approaches to recruiting in these markets. Developing a strong team will be crucial for all businesses wishing to compete in an increasingly competitive market place, and so businesses need to focus their talent strategy on a limited number of candidates with the right skills in order to fill requisitions in the West, while boosting their brand to attract candidates in larger numbers in Asia.