The biggest headache for many organisations operating across high-growth markets in Asia is caused by trying to find and keep hold of the best people. While there’s no failsafe plan to prevent quality employees moving on, there is a growing need to devise ways of building trust and loyalty that go beyond remuneration and financial incentives. After all, someone else will always be willing to pay more.

Marcus Downing, Associate Director at management consultancy Hay Group, highlights the scale of the problem: “There’s basically a talent shortage in many parts of Asia. Countries such as China and Vietnam have a massive amount of investment put into them but the human capital just isn’t there. You have the situation where, locally, people move jobs every [six to] 18 months and get a 92 per cent pay increase for moving...

"Companies in those regions are trying to hire the best of what’s available… they might fly in an ex-pat which is expensive and only a short-term solution; they might try and hire locally. But they are only getting what’s available, not necessarily the person that can do the job.”

Rose Colledge, CEO of employer marketing and talent management services company Work Group, says that “monetary rewards as well as career development are viewed as more important than other benefits, such as work/life balance and flexible working, particularly in China”.

Career development can certainly be used as a way to differentiate a business in a fiercely competitive labour market. Serge Colin, Group HR Director at construction supplier Lafarge Tarmac, comments: “If you want to bring in the best talent you need to expose them to senior level people during the recruitment process… introduce them to the top managers, so [it’s clear] they are being hired by the multinational."

Howard Kerr, Chief Executive at standards and training provider BSI, says: “Good talent is often nervous about joining a foreign company that they’ve never heard of, so new entrants have to do an awful lot of upfront pre-selling and preparing the groundwork, explaining who they are, what the business prospects are, the style of the business and who their customers are… because it all comes down to a question of trust.”

According to Craig Wilkinson, Regional Managing Director for the Hong Kong-based LDC Asia, which is part of the UK mid-market private equity firm LDC, people and talent form “one of the toughest challenges” for companies entering the region. He explains: “A significant proportion of the workforce is mobile and prepared to move frequently for better terms – however, there is some caché associated with working for a foreign-owned business and we have found our portfolio companies... have been able to secure and retain good people.”

Facing the future

Cultural nuances need to be studied and understood. Brian Stevenson, Criticaleye Board Mentor and Non-executive Director of the Agricultural Bank of China, comments: “If you’re trying to head-off mistakes then you need to think about how senior executives going [there can] learn about the region, but also how they grow and develop a board that is culturally sensitive to how the region behaves and thinks, otherwise you won’t get the best out of it.”

Nick Allen, former VP of Strategy and Portfolio at oil and gas company Shell, says: “Status matters in Asia and a job title is a demonstration of this. I once lost a top talent in Singapore because he was moving from a President role in another company to a manager role in Shell. Financially it was a promotion but he wouldn't take it because of the title… people would find out what his real ‘title’ was and he'd lose face.”

All too often, assumptions are made which prove misguided. Mei Wong, Affiliate Partner for Asia at executive search firm Warren Partners, provides the example of western companies giving senior roles to people who are returning back home to China after jobs abroad. There can be disproportionate expectations, says Mei, about their knowledge and ability as it’s easy to become out of touch with a “constantly changing and complex new China”, and such individuals may also have only held “relatively junior positions abroad but are given full responsibility to run the China operations”.

Conversely, dropping in people from HQ won’t provide a long-term answer either. Howard Thomas, Criticaleye Thought Leader and Dean of Lee Kong Chian School of Business in Singapore, comments: “Unfortunately, many foreign firms get into the practice of bringing ex-pats to fill key jobs in Asia as part of their global talent development programmes. As a result, local talent often jokes that they have a new boss every three years – year one is training the new boss, year two is helping them do something unique, and year three is packing them up to go home.”

Roger McDowell, Chairman of engineering company Avingtrans, says that, after six years in China, “the obvious answer to the ‘hiring’ question is not to hire senior people, but to build our own”. He explains: “We hire people with potential then give them challenges and the room to [develop]. To retain talent we keep our business growing faster than our people are able to grow… that stretches and excites their imagination and ambition. The business environment needs to be fun, exciting and [should show the] potential ahead.
 
“We rarely bring people in at a senior level – as an example, for our Aerospace business Sigma, our first employee recruited in 2005 is now [General Manager] of our facility employing 150 people… [We let people] prove themselves before they are promoted.”

Getting that degree of trust in people can take years to build and time is a luxury that the majority of companies invariably feel they don’t have. Poor hires will be made but if it becomes apparent that this has happened, the general rule is to act swiftly. “We see lots of companies who make recruitment mistakes and don’t do anything about it,” says Roger. “In Asia, if you make a mistake, don’t be proud: change things quickly and move on.”

Howard Thomas says: “Companies need to really understand the local customs and practices and consider how hiring is not only about obtaining talent, but also about building the right relationships for the success of the business.”

I hope to see you soon.

Matthew

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