Why talent is the globe's growth engine
As companies plan for growth in Asia and beyond, they need to have the right people, with the right skills and experience to understand new markets and drive expansion strategies. Find out why talent is the new growth engine, and what companies can do to develop it.
Overview
What will drive success in Asia and globally in the years to come? For Western multinational companies (MNCs) and Asian enterprises alike, the answer is talent. The strategic importance of human capital is increasingly being recognised as core to a company's performance - particularly as they enter new, high-growth markets.
Yet this talent is in short supply. In PricewaterhouseCoopers' Global CEO Survey 2011, respondents indicated their top two challenges over the next three years to be the limited supply of candidates with the right skills (63%) and losing top people to competitors (47%).1 Similarly, a recent report from global HR consultancy Korn/Ferry states that "Western multinationals and Asian enterprises who want to expand in the region must develop their own flexible, creative, and collaborative leaders - a group currently in extremely short supply."2
As demand for talent outstrips supply, it will be more critical than ever to have a robust talent pipeline, one that draws on the ability to attract new talent and is also able to develop and effectively deploy home-grown talent. Much remains to be done to achieve this, as the Korn/Ferry report points out: "Companies that want to tap Asia's next phase of growth have plenty of work to do if they want to build a new cadre of managers capable of success." The stark alternative is one that no company wants to consider: to cede ground to competitors that have had the foresight to address this issue.
While this may sound challenging, the reality is that most companies have little choice but to attempt to enter the Asian markets, as they cannot afford to miss out on the growth opportunities in the region. The key, therefore, is for companies to quickly come to grips with the challenges that Asia presents, so that they can start to reap the benefits of a presence in the world's new engine of growth.
Facts on the ground
A different playing field
Companies may well ask: 'Why not just re-deploy our talent from maturing, slower-growth markets in the West to Asia?' The simple reality is that Asia is not Europe or North America, and a different skills set is required to succeed as a leader in the Asian business environment. The issues range from dealing with the sheer diversity of the individual markets across Asia to adapting to the much faster pace of growth seen in the region. Unique stakeholder considerations and complex regulatory environments also necessitate a distinctly pan-Asian perspective.
If talent is indeed the key to success, then what are companies doing to address this issue? According to a recent survey by Mercer3, a vast majority are planning to make changes to their talent programmes in the areas of recruiting (79%), retention (77%), training and development of leadership (87%), and workforce planning (78%). These translate into three key issues: attracting (and keeping) talent, developing talent and deploying talent.
But to focus on just these three issues would be ignoring the most significant point - that companies are integrating HR strategies into their corporate strategies. No longer is HR an administrative function left out of broader strategy discussions. There is no better example of this than leading companies such as Proctor & Gamble and Unilever. They are establishing talent management programmes in Singapore that are closely integrated with their regional headquarters, giving them the ability to align talent and business strategy. These programmes reinforce Singapore's position as their "talent engine", where they will make strategic HR decisions around talent acquisition, development and deployment.
Crossing global boundaries
Factors affecting talent attraction include compensation, work environment and the potential for career growth. Another key factor is location, with global talent increasingly selective about where they want to work. Because of its strong growth, Asia has become a location of choice; but within Asia there are wide variations in the perceived attractiveness of its many major cities. At the top of the list comes Singapore, which ranked as the best Asian city in Mercer's 2010 Quality of Living Survey. Furthermore, Singapore's position as a "control tower" for many companies' regional operations means it is a hub for decision makers and makes it attractive to executives seeking to enhance their career capital.
The talent race
The second issue, developing talent - and particularly key leadership roles - is one that companies are increasingly focusing on. "You always have to be sure that the development of your people is ahead of the actual size of your business," explains Unilever's CEO, Paul Polman. Indeed, global consumer products giants Unilever and Procter & Gamble are two companies that have taken action.
P&G has opened its Asia Leadership Development Centre in Singapore. And Unilever's new "Four Acres Singapore" global leadership development centre will be part of a larger government-supported LINK@Nepal Hill cluster, which will house business schools, corporate universities and professional services companies to create additional learning and collaboration synergies, which will position Singapore as a global leadership development hub in Asia, for Asia and the world. To meet their growing need for executives who understand and can operate effectively in the developing and emerging markets, Unilever plans to have up to 900 of their leaders attend specialised programmes at the Four Acres centre annually.
Singapore also plays host to a growing list of leading international and local education institutions that offer opportunities for talent development. Amongst these is INSEAD, which has just announced a further expansion of its Singapore campus and the introduction of its Advanced Management Program in Singapore in 2012. INSEAD will also be collaborating with the Lee Kuan Yew School of Public Policy to offer a continuation pathway from MBA to MPA (Masters in Public Administration), and vice versa, for individuals seeking a deeper understanding of both business and policy issues in the Asian context. Other notable names with a presence in Singapore include Yale, which is collaborating with the National University of Singapore to open a liberal arts college, Duke which operates a graduate medical school together with NUS, renowned arts school NYU Tisch, and the University of Chicago Booth School of Business.
Several think tanks and institutes also call Singapore home, providing thought leadership and Asia-focused research that companies can tap into. An example is the Human Capital Leadership Institute (HCLI). Its Singapore Business Leaders Programme (SBLP) is a unique five-day executive education programme that brings together eminent international speakers and some of the world's top corporate leaders to share and learn on issues critical to leadership in the region. It also recently ran customised executive programmes for the senior leadership teams of Applied Materials and Infineon.
Another avenue that addresses not just talent development, but also deployment is collaboration with human capital consulting firms. Leading advisory firms such as Aon Hewitt and the Hay Group have set up Asia-focused research centres in Singapore to help companies optimise their talent management strategies in the region. The RBL Group, co-founded by renowned HR thought leader Dave Ulrich, also recently established an office in Singapore - its first in Asia - to support the growth of its clients. The Chartered Institute of Personnel Development (CIPD), Europe's largest HR and development professional body, and The Conference Board are two other organisations that have set up in Singapore, recognising the growing importance of Asia to their stakeholders.
[3] Mercer, Future of Talent Management (APAC report), http://www.mercer.com/articles/1382465
The Singapore difference
Global war for talent
To bring together all the elements required to succeed in the global war for talent calls for a unique ecosystem - one that combines an attractive location with a strong network of supporting institutions and a critical mass of corporate control towers.
Singapore has succeeded in creating such an ecosystem, with its concentration of more than 4,000 MNC headquarters supported by high quality of living, and a host of education institutions and professional services firms. Situated in the heart of a rising Asia, it is also a global business city. Its extensive transport and logistical network, together with a multicultural society, provide a strong base to facilitate connections with major markets in Asia and around the world.
This convergence of infrastructure and institutions provides companies with the opportunity to develop and manage talent for Asia and the world. Those that seize this opportunity will not just survive the war for talent, but also see their businesses thrive in the future.
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