MULTINATIONAL corporations (MNCs) operating in Singapore and the rest of South-east Asia have broadened their operations beyond the manufacturing and distribution functions that used to be popular in the region a decade or so ago.
Value-added industries such as engineering, information technology and environmental sciences are becoming more common, and require people with advanced skills in design, research and development, solution selling and consulting services.
Identifying potential leadership successors and developing a ready, willing and able “back-up bench” keeps senior management in many MNCs awake at night today. While everyone agrees that leaders should ultimately come from the region, local expertise at the top-level remains thin on the ground.
We have learned first-hand in our research for the book, Talented South-east Asia, that nearly 30 per cent of organisations have classed improving overall leadership capabilities and building up leadership pipelines as their top priorities in interviews with some 100 business and human resource (HR) leaders at over 50 global firms operating in the region.
In Singapore, a hub for MNCs in the region, we see enterprises actively seeking to reduce their expatriate employee numbers in favour of hiring and developing local talent.
Throughout all levels, talent retention is a top priority. The acute shortage of leadership talent has driven MNCs to import offshore talent as well as invest heavily in developing a local leadership pipeline.
MNCs in the region are generally mixing and matching three main strategies to manage the talent crunch:
This involves developing existing talented executives who are potential leaders.
Efforts to build future leaders are now starting at the college/university level. Corporate academies or universities with campus facilities have become increasingly popular.
Companies are also taking the global initiative in developing leadership talent. There was strong evidence of comprehensive leadership development programmes in every organisation we interviewed. Some are outsourced, but most run programmes internally, through a global leadership framework.
This strategy sees companies tapping on an existing talent pool of expatriate talent for the short term.
Companies are thinking holistically about the role of expatriate employees in their South-east Asian operations today. Many are using expatriate assignments as strategic components of leadership development programmes, providing learning diversity and international experience for the expatriate, as well as sharing knowledge and transferring critical skills into the region.
This involves proactively recruiting specific expertise.
Companies can also build a pipeline of resources from external sources, though the pool of talent is typically very raw in South-east Asia.
Just a quarter of Indonesian youth are enrolled in tertiary education today, very encouraging when 7.5 per cent of the adult population have tertiary qualifications, but still relatively low as a proportion of the whole.
The Philippines has 24 per cent of its adult population aged over 25 years with tertiary qualifications, whereas 28 per cent of those below 25 are working on attaining such qualifications.
In recruiting talent, innovative companies across the region are indeed reaching out beyond the cities and hiring workers in second- and third-tier educational institutions and in rural and suburban communities.
Talent from such sources tends to be less expensive and more loyal, but inexperienced when it comes to corporate social and communication skills. MNCs have to be committed to investing in basic training and development, as well as in strategies that develop identified successors quickly enough to meet current needs.
Systematic development in human capital is a long-term commitment. While companies have to experiment to see what works for them in the region, those with strategic long-term workforce plans linked to total rewards and pay-for-performance programmes will be the ones likely to enjoy a competitive advantage.
Article by Karen Cariss, the chief executive officer and a founder of global talent management software provider, PageUp People. She co-authored the book Talented Southeast Asia, which explores the experiences of more than 50 top multinationals with existing operations in the region. For more information, visit www.talentedsoutheastasia.com