The Battle for Talent in Asia

by Mark Millar on 2012-02-11 05:34:00

Whilst western developed markets are experiencing tough times, we see encouraging economic growth throughout Asia’s complex mix of emerging, developing and developed markets.

Asia has for many years been the workshop of the world, deploying plentiful low-cost labour to manufacture goods for export to consumers in the west. In recent years, expanding economic prosperity – in large part fuelled by the success of the manufacturing sectors – is seeing the rise of increasingly prosperous consumers. It is estimated by OECD that by 2030 Asia will account for 66% of the world's middle class, up from 28% in 2009.

Thus we are seeing rapid expansion in markets throughout Asia and these continuing growth patterns are presenting multiple challenges in the area of Human Capital, where the supply cannot meet the demand, resulting in the Battle for Talent in Asia.  In the Gartner 2011 survey, CEO’s  identified ‘Attracting Skilled Workers / Talent’ as their number two priority, second after retaining existing customers.

Demand Drivers
Capitalising on the growth potential in the Asia region is becoming increasingly important on the executive agenda and this is driving increasing demand for experienced professionals across all job functions and all industry sectors.

Over and above the well established out-sourced manufacturing bases we now have the rapidly developing consumption economies in the Asia region -in particular India, China and Vietnam - also driving demand for experienced practitioners.

Limited Supply
However, the overall pool of talent is not expanding rapidly enough for the supply to keep up with the demand – and hence the spiralling payroll costs as organisations fiercely compete to attract the limited talent that is available.

Especially in these developing markets - where both production and consumption are rapidly expanding - there is simply not enough talent to satisfy the existing demand, let alone support continuing rapid growth.

Although with Asia’s large populations there is substantial critical mass of labour - with an abundance of talent, a wide range of skills and plenty of experience, there is not a deep enough pool of workers with the right skills and experience – and in the right place, thus causing the current skills shortage across all sectors.

An employment survey conducted by Logistics Executive throughout the Asia region identified logistics, supply chain and customer-facing roles the most difficult roles to recruit for. In response to the question ‘Which functions have you found it most difficult to recruit for?’ the survey results showed the following as the top five categories:

1. Logistics & Transport
2. Supply Chain
3. Distribution & Warehousing
4. Sales & Business Development
5. Customer Service

The “Battle for Talent” needs to be fought on two fronts – Attraction and Retention.
Organisations need to be thinking from the employee’s perspective and consider two simple questions – Why should I choose to join this company, and Why should I chose to stay at this company.

Attraction
Amongst the fierce competition to attract the best talent, it is essential for organisations to adopt a marketing type of approach to its human resources activities.  Within their respective industry sectors, individual businesses need to promote their company image and build their brand – as an “employer”, over and above their market positioning as a supplier. In the current environment companies are not only competing for customers, they are also competing for employees.

Particularly important for companies that do not have global brands or prestigious industry positioning in the multi-national arena, is the need to increase their presence and profile on the radar of potential future employees, through various marketing activities.
Tactics to deploy include active and public participation in community activities, engagement with the relevant industry associations and regular exposure in the trade publications – these will all help towards positioning your company as an employer of choice.

In addition, with the increasing awareness and concern throughout society about environmental issues, a company having - and articulating - clear policies and strategies on Corporate Social Responsibility (CSR) is escalating in importance as one of the factors for consideration by potential employees.

Developing linkages with the relevant education sectors and institutions will assist in developing options for entry-level talent acquisition. In my view, this represents substantial opportunity for employers to attract local talent into their organisation at grass roots level, deploy graduates through job rotation and management development programs, thus generating a home-grown pool of talent with high levels of commitment and loyalty to the employer.

All too often, it seems that the majority of organisations do not have enough patience, management bandwidth or the investment perspective to adopt this approach – and therefore continue to poach talent from their competitors, thus exacerbating the challenges and increasing the costs – for everyone.

In a recent survey of C-level executives, more than half of respondents describe ‘experience within the industry’ as the best source of talent – this means that organisations prefer to improve their human capital by recruiting experienced people away from their competitors.

However, you have to create attraction strategies over and above just more money. As John Nolan, senior vice president of HR for Unilever in Asia says “you have to offer employees a reason to want to work for YOU. Employees need to feel they are not only pursuing a career, but that they have a chance at impacting the world and the community.”
In addition to the dollars and cents of the salary and benefits package, companies that offer ongoing training and development programs leading to varied career opportunities are likely to be successful in attracting good quality talent.

Successful Selection supports Retention
It should be noted that due diligence during the recruitment and selection process will increase the likelihood of successful deployment and increase retention. Selecting the right candidate for the right role requires experience and expertise - combined with clear communications.

One of the most common reasons for managers leaving within one year is the job role failing to meet their expectations. Another is candidates using the job as a hopping platform to better offers.  Thorough discovery during the recruitment process – engaging expert external resources as required – will play a large role in mitigating these risks.

Retention
Having successfully attracted the talent and selected them to join your organisation, the challenge then becomes how to retain them for as long as possible. Active Retention should form a key component of your company’s overall Talent Management strategy – and this should start right from day one.

Successful on-boarding is an essential start to inducting new hires – this includes rapidly integrating new staff into the organisational culture and the day to day business of how the company works. Structured induction programs providing broad exposure throughout the organisation and deep immersion into the new hire’s specific functional areas, together with developing a crystal-clear understanding of roles, responsibilities, deliverables and measurements, are all key elements of best-in-class on-boarding programs.

The first ninety days of the new recruit’s experience within your organisation will have a significant impact on their longevity in your company. Hence the first three months of the new employee’s tenure – whilst they are getting up to speed, not necessarily delivering results just yet, during something of an investment phase – will play a major role in increasing employee retention rates.

I encourage focusing extra due care and attention during this start-up phase to ensure a positive, welcoming, encouraging experience for the new recruits – extra efforts here will pay dividends later on.

In addition to successful on-boarding programs for new employees, companies also need strategies and tactics to improve Retention on an ongoing basis.

Back-to-Basics best-in-class business practices for supervision and management can make a huge impact. Some of the key drivers of employee satisfaction – which in turn has a major influence on retention – are enshrined in basic management principles.

Generally speaking, Satisfied Employees . . .

 - clearly understand the requirements and expectations from them,
 - feel they have the tools, time and training to do their job properly
 - see opportunities within the company to learn and grow
 - feel rewarded, recognized and appreciated

Hence, working on employee satisfaction is a key part of employee retention. Other strategies to increase employee retention include organisational belonging – creating and nurturing a work environment where employees feel a sense of belonging – to their team, their department and the company – inside and outside of work hours.

One example I recently came across in Vietnam is a consumer products company that have adopted three specific strategies that have increased employee loyalty and improved retention:

Company sponsorship of sports activities and company sports teams - engenders company belonging, loyalty and community spirit, and facilitates opportunities for workers to enjoy team and social activities together outside of work hours

Job Rotation program enabling employees to progress horizontally across different departments – at the same pay scale – but providing opportunities to broaden their experience and learn new skills

Performance related cash bonuses - at individual and team level – for specific results achieved over and above expected targets, providing opportunity to increase take home pay – funded by results above and beyond budgeted levels

Conclusion
An organisation’s human capital assets are increasingly a major source of competitive advantage and a key driver of profitability.
This is particularly true in service oriented sectors, where, despite the huge investments in physical assets and information technology, at the end of the day it is the employees’ actions that empower the effective and efficient execution of the company’s supply chain ecosystem – essential for success in modern business.

The current imbalance in the talent market reflects inadequate supply to meet the increasing demand - and this is increasing business costs, both directly on the payroll and indirectly though higher turnover and additional recruitment.

Attraction and Retention are critical success factors for effective talent management - and there are several creative ways to improve performance in these key areas – over and above the salary package. Adopting marketing strategies from an employer perspective will increase attractiveness, whilst additional due diligence during the recruitment process will enable successful selection. Effective on-boarding and ensuring a positive and successful first ninety days for new hires will substantially influence retention over the longer term.

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