Localizing talents in Asia—Yes, No, Maybe?
Most MNCs would agree that in the long run, talent localisation is a logical and desired strategy, especially if the local business operation has a certain scale.
However, in Asia, we see companies deliberately delaying this strategy and instead are continuing to rely on seasoned expats to run regional or country operations.
What are the reasons behind this seemingly counterintuitive phenomenon? Firstly, the local candidate pool is not equal in each country in Asia (e.g. Singapore versus Vietnam). Secondly, as markets in Asia continue to grow in scale and complexity, leadership roles evolve accordingly and acquire more profile and scrutiny. Even in more developed markets such as Singapore and Hong Kong, where local talents have successfully helped MNCs deliver results in the past, are challenged by an increasingly decentralized region.
The slowing economic growth in China offset by higher growth in ASEAN; increased currency volatility; the emergence of regional supply chain and the drive for operational efficiencies are all factors which require a different set of competencies that local talents have often yet to develop because most of them have been operating in pure growth markets for their entire career.
Retention is an even bigger problem for talent localization. CHROs find that despite spending time and effort developing their local talent, they eventually lose them to the competitors. This issue is particularly exacerbated in markets where local compensation levels are significantly below that of expats, e.g. Vietnam. Our research shows that it is significantly cheaper to retain talent (typical premium of 6%) than to hire from external sources (typical premium of 25%).
Companies are employing innovative measures to improve the “stickiness” of their local leadership talent. Comprehensive and bespoke Employer Value Proposition (EVP) tools strengthen the psychological bond between the employees and the company. Others have built more sophisticated long-term remuneration structures that encourage longer tenure with the company.
All in all, talent localisation in Asia is not a straightforward strategy and the combination of talent scarcity and continued economic uncertainty will hinder talent localization in the short-term.
Q4 People Moves
- Akitoshi Takei has been newly appointed as Head of Human Resources in October. Mr. Takei was previously with Tokyo Star Bank holding several senior HR roles. (Japan)
- First Data appoints Karen Ho as Human Resources Director for Southeast Asia. Ms. Ho joined First Data from Citrix Systems where she was Human Resources Manager, ASEAN. (Singapore)
- Kraft has appointed Atul Khosla as Regional Human Resources Director. Mr. Khosla was previously with Novartis where he was the Head of Human Resources for Asia Pacific. (Singapore)
- Claudette Byers joins MetLife as Executive Officer, Human Resource. Ms. Byers was previously with Hartford Life Insurance and Merrill Lynch Tokyo as Head of Human Resources. (Japan)
- Pacnet announced a transition in senior leadership and has appointed Syed Ali Abbas as Chief Human Resources Officer. Mr. Abbas moved from AT&T, where he was Executive Director of Human Resources for Asia Pacific. (Singapore)
Pan Pacific Hotels Group
- Pan Pacific Hotels group has announced Jill Tan-Gunter as Vice President of Human Capital & Development. Ms. Tan-Gunter will be responsible for Asia, Australia and North America. She was most recently Vice President, Human Resources at Marco Polo hotels group, based in Hong Kong where she focused primarily on Hong Kong, China and Philippines. (Singapore)
Treasury Wine Estates
- Megan Collins was appointed Chief Human Resources Officer and will be based in Melbourne. Previously, Ms. Collins was General Manager People & Culture, Business Banking at National Australia Bank. (Australia)
For further information on our HR functional capability in Asia, please contact:
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About Russell Reynolds Associates
Leadership, Succession and Search. In today’s global business environment, success is driven by the talent, vision and leadership capabilities of senior executives.
Russell Reynolds Associates is a leading global executive search and assessment firm with more than 300 consultants based in 40 offices worldwide. Our consultants work closely with public and private organizations to identify, assess and recruit senior executives and board members to drive long-term growth and success. We value teamwork, serving our clients with a collaborative approach that spans our international network of sector and functional experts.
Our in-depth knowledge of major industries and our clients’ specific business challenges, combined with our understanding of who and what make an effective leader, ensure that our clients secure the best leadership teams for the ongoing success of their businesses. For more information, please visit us at www.russellreynolds.com.