Stock markets often belie the facts about the true picture of the underlying economy – while Developed Market (DM) stock markets have outperformed their Emerging Market (EM) counterparts every year since 2011 (except YTD 2015), the underlying economies have followed different trajectories. IMF estimates that for the 2015-20 period not only will the growth differential between EMs and DMs be higher than in the previous 5-year period, but more importantly the trend of slowing EM growth will also see reversal.
It comes as no surprise that companies are increasingly pegging their prospects for growth to EMs. However, the impact of this slow but steady trend on key business resources is varied – while companies in EM appreciate the ease in access to technology and capital, they are slowly realizing that talent is fast becoming a scarce commodity.
In this edition of our TaipanOracle newsletter, we look at key levers that EM companies can focus on to stand out as prospective employers and successfully onboard the best available talent, both local and foreign.
EM Employers – finding the thorns among the rose bushes
Talent gaps continue to hamper growth in emerging markets. Globally investment programs in grooming talent and leadership are just beginning to show results, however for many local Asian companies realistic talent pipelines continue to remain a distant dream. Key skill deficiencies hamper fresh graduates with their ‘employment readiness' while small and large corporations complain about the unavailability of talent that is immediately required to keep their growth engines running. The issue lies not in numbers but rather in the lack of skills required to match business requirements. In Russia and as well as in India – most local champions are losing talent to more attractive jobs overseas. Even at a more strategic level - it is an uphill battle for local champions to compete with MNCs for the best senior talent given the lack of organizational or management resources and the factors which we will discuss further in the article - but exceptional leadership talent is crucial and a key differentiator to a high-growth organization’s success in the competitive regional and global marketplace.
Talent retention issues, another thorn in the bush, will continue to aggravate as the scarcity of experienced and skilled local resources increase competitive hiring pressures among both global and local players. Adept professionals are recognizing their own value and increasingly adopting a free-agent mentality and using opportunities as stepping stones in pursuit of their personal goals. These goals include improved career opportunities, better working conditions and more often than not higher financial incentives, and are often prioritized at the cost of professionalism and integrity.
It is imperative to understand, nurture and effectively communicate key factors influencing talent attraction and retention over the long run – to achieve this, the realization that money alone is not the driving force in today’s emerging markets, is a good start. We detail key motivating factors which can enable employers to differentiate themselves in a competitive hiring marketplace - brand, opportunity, purpose and culture.
Brand
Branding, where most global giants get it right, is not just limited to the consumers of their product portfolio but also to their existing and potential talent base. Most local champions lack the focus or technical know-how to position themselves as desirable destinations for career growth and personal advancement. A key influencing factor here is Leadership, as aspiring professionals gravitate towards existing stand-out leaders in the organization and the opportunity to mould themselves in their shadow. Employees seek a company with a focused strategy and platform to compete in the global arena and robust growth prospects so they may play an active part in the emerging market fairy tale. Google’s recent announcement about its CEO designate, Sundar Pichai, has made it an even more desirable employer (all the more after getting it right with sleep pods in the workplace) where a smart and capable candidate from a humble emerging market background can make his way to head one of the highest-grossing businesses in the US. It is worthwhile to note that 89% of Google’s USD 66bn revenues accrued from the division Pichai lead. High potential talent will want to work with/for Pichai, and aspire to become the next Pichai. Simple.
Opportunity
To be stimulated by challenging work, rewarding assignments, continual training and development, and financial incentives – these ingredients are realistically more achievable in a high-growing local champion than in a global MNC. Local players are more flexible, less likely to be hampered by bureaucratic structures, approval red tapes and cross-border management tussles. High potential local talent must be provided a platform to an accelerated vertical or lateral career track where their skills and experience can grow at a pace that is relative to the market. Local champions will have stronger ability and domestic access to respond to challenges and opportunities in their own markets thereby providing ample opportunities for development.
Purpose
Employment cannot be viewed as simply a job. Each one of us seeks purpose in our life, a trait which gets pronounced with high potential talent who realize they possess the ability and potential to be a part of a game-changing business. Be it redefining the nation and the world economy, or social initiatives that can make a difference in the lives of the unfortunate – talent seeks the value of global citizenship and sustainability. A potential ‘competitor’ in an already crowded war for talent would be the proposition of starting up their own enterprises, as more young talents are lured by the success stories of game-changing once start-up entrepreneurs like Steve Jobs, with the recent technology sector boom and of course the democratization of IT – providing ample tools for a better chance of success. The Masan Group in Vietnam is an example of a high-growth local champion which displayed strong purpose and intent when building its core business development team in 2009. The Board shared a common vision of building a successful local champion for the Vietnamese people. Our team worked closely with the senior management with a primary focus on acquiring overseas based, raised and educated Vietnamese talent along with a diverse group of foreign and local talent. We integrated a collective sense of common purpose whilst addressing the company’s strategy of a proprietary deal making ecosystem – solving key constraints in the Vietnamese market at that time. The seamless execution of this strategy was one of the key factors which led the company to become the largest diversified private group in Vietnam with multi-billion dollar valuations.
Culture
The Dark Knight Trilogy by Christopher Nolan - a novel take on the Batman movie franchise was a global box office success, raking in over billions of dollars worldwide and converting Nolan’s style of ‘story-telling’ into a cult phenomenon. The director's direction, themes and character building and strong cast received worldwide acclaim for its massive improvement over it predecessors. Authentic, was the universal word used by viewers when asked on what made this trilogy a success. The modern world craves authenticity, telling your brand story or promise without it is a recipe for disaster as millennials and modern audience on a whole are well informed, and are far more sophisticated consumers. Culture plays a very important role in ensuring high potential talent feel they are not alone in building and being a part of something real, they will be rewarded based on meritocracy and that they are critical to the company’s success.
A bespoke approach to addressing the factors above must be undertaken for different companies operating in different emerging markets. But a combination of all the above is key to differentiating a local champion as the go-to career destination for high potential talents, be it from the foreign or local pool. Taipan Partners specializes from conceptualization to implementation of talent strategies and execution, with an excellent proven track record in the ASEAN market. We invite you to schedule a chat with out Talent Solutions team to discuss what difference we can make to your business – greatly setting itself apart from its closest competitor as a local champion, to becoming a global one.