Closing the Asian Talent Gap: The Multinational CHRO's Perspective

As leading multinational organizations begin to set their long-range sights on newly emerging markets — Latin America, Africa, The Middle East and emerging Europe, the major Asia Pacific economies are increasingly being viewed as relatively mature given the years of investment on the part of Western multinationals. No longer considered ‘new frontiers’, India, Greater China and Southeast Asia, led by Singapore, as well as Korea are now at ‘adolescent’ stage — and rapidly catching up to the fully mature markets of Japan, Australia and New Zealand in the eyes of many Global Business Leaders. Given this perception of growing maturity, Western multinationals are now looking more carefully at ROI in Asia Pacific, and increasingly expecting that region to help counterbalance the financial shortfalls of the United States and Europe. In general, after many years of investment in staffing, training and development, major headaches for companies continue to revolve around talent issues in the major Asia Pacific growth markets. The difficulty of placing the right talent into key roles is most often cited by HR Leaders as the major obstacle to achieving desired levels of profitable growth.

Tired of the Talent Transitions

As a result, many CEOs are now asking CHROs to account for all-too-frequent talent transitions in Asia. Sick of a continued massive investment in talent over many years, often with no commonly agreed long-range strategic plan, they are asking why top management slots in Asia are still not occupied by locals and why high levels of turnover continue at every level. The top global ranks of multinational organizations remain almost devoid of Asian talent, as a steady stream of Western expatriate leadership continues to be deployed in the Asia Pacific region. High on the CHRO agenda are Asia leadership stability, staff retention rates and the issue of how to achieve a more considered, predictable succession planning process.

How Did We Get Here?

In the past in Asia, companies often expected that a ‘rising tide would float all boats’ as the attentions of top leadership remained focused on the larger, more established regions of Europe and the United States. At the same time, it has been relatively easy for ‘B’ grade expatriates in Asia to hide and bask in the success of the economy, although this has changed considerably over the last 3-5 years (and varies by country). Meanwhile, the dollars being channelled into increasingly expensive Asian hires (in addition to the expat package costs of their bosses) went largely unquestioned. Their departures a couple of years later were almost casually dismissed as a fact of life in Asia’s much talked and written about ‘war for talent.’

Today, as Asia Pacific growth and financial performance is increasingly scrutinized, leaders are asking : ‘What is missing from Asian managers? Why can’t we keep them? Why do they move around so often? Why they can’t seem to make it to the top regional and global jobs?’ To understand this, it is important to consider the career paths of the region’s best and brightest.

The first key to entry is education — which is extremely important and much emphasized in Asian cultures. Asian companies and Asian hiring managers within multinationals tend to focus on school reputation and quality and particularly where a candidates’ graduate degree was obtained (often top schools the United, States, UK or Australia).

Once hired, the individual climbs the local career ladder, generally based on a combination of tenure (historically more important in Asian companies) and performance. Managers are promoted based on a proven track record in their local environment. The top performers continue to climb based on a combination of intellectual horsepower and functional expertise, in addition to an in-depth knowledge of the local business and cultural environment. The Asian executive is generally ambitious and, in line with cultural norms, he or she works hard and very long hours, often many more hours per year than his or her peers from other regions.

Unfortunately, although strong on functional depth, it is rare that these high potentials have the necessary level leadership skills required to reach the top in a Western multinational environment. This is due to a lack of exposure, rather than a lack of ability or hard work. This shortfall is often described as a lack of corporate/political ‘EQ’. As well as more formally trained leadership skills, areas where difficulties can be encountered within Western multinationals can often revolve around ‘softer’ and more subtle decision making, such as knowing which battles to fight/not to fight; how to effectively ‘push back’ on a Western boss; what to communicate/not to communicate and under which circumstances; and generally how to deal with complex ‘Western style’ politics. It is not an easy experience for these individuals and often tenure is artificially cut short, or career potential not reached as a result of this perceived lack of ‘EQ’.

The Global Leadership Imperative

For leaders to excel — or sometimes even survive — in a global environment, they need to have significant experience outside of their own local market and culture. Clearly, a number of years in multiple markets are best and some headquarters experience is ideal. It is within a corporate headquarters where some of the best learning experiences take place. Although HQ roles can be viewed as ‘far away’ from consumer reality, it is where up-and-coming leaders obtain C-suite exposure and have the chance to observe how/why critical decisions are made. Mentors and advocates are invaluable to a rising executive and generally these are most easily found and accessed within a global headquarters.

Given the growing importance of Asia on the global business stage, companies wishing to be truly competitive in attracting and retaining Asian leadership are working hard on initiatives to help high potential managers move across countries and regions. Also being worked on is the provision of opportunities for the same group to have the necessary exposure at the corporate/HQ level. The importance of giving these high potential executives the mechanism to move home again when the time is right is also being duly noted, given the poaching potential of the internationally trained Asian Leader.

Who is Winning?

These days need a multi-pronged talent development strategy is required to engage and grow Asian leadership by giving them the requisite global leadership skills and corporate sensibilities. Forward thinking companies (especially consumer/packaged goods organizations such as Procter & Gamble, Unilever) have long recognized that there is no shortcut to giving executives from all regions such development opportunities. They have also recognized that given the economic importance of Asia Pacific, there is no region that is more of a priority to have an appropriate number of seats at the global leadership table.

Today, a larger group of multinationals, (interestingly with particularly strong representation by U.S. based consumer products organizations), is leading the way in providing the requisite international development opportunities to Asia Pacific’s high potentials. These same companies are also quickly coming to understand that top global leadership roles cannot continue to be dominated by Americans or Europeans who have never lived outside of their own countries of origin. As a result, they are ensuring that top executives from their own country headquarters are given the necessary ‘on the ground’ exposure in Asia Pacific and other high growth regions.

The other category of company which is benefitting from current trends is the Asian multinational. For years, organizations such as Tata, Samsung
, Sony and Infosys have been producing talent in Asia which has been coveted by American and European multinationals. Now the shoe is on the other foot, and these organizations, as well as a number of strong newcomers from China in particular, are benefiting from a weakness among Western multinationals in terms of providing sufficient global opportunities to Asian executives. Disenchanted Asian Leaders are finding that Asia’s ‘homegrown’ firms are increasingly able to offer a competitive international career path — and a much easier-to-navigate corporate culture.

Conclusion : A Well-Supported HR Mandate

Due to the growing economic importance of the region, the talent gap in Asia Pacific provides HR with a high profile and pivotal mandate. At The Chapman Consulting Group, we are fortunate in having the opportunity to work with some progressive HR teams who are leading the way in their own area of direct influence by raising their own Asian HR bench strength through investment in talent pipelining and development.

The need to build and retain a powerful home grown talent base within key geographies is widely recognized by most multinational business leaders. Most would agree that Asia Pacific is an important enough region and markets like China and India have sufficient potential to justify a substantial long-term investment in ensuring that there is a proportional representation of talent from these countries sitting at the global table. Asia Pacific has an enviable, willing and ready group of well educated and trained executives to take up global business challenges. The onus is now on the HR Leader to assist their business peers in Asia Pacific to bridge the long-bemoaned talent gap by strategically and creatively enabling the global careers of their highest potential leaders. With all parties unanimously in favor of this direction, HR has a rare opportunity to play a leading role in
enabling their employers to compete with Western and Asian multinationals for what is arguably the world’s hottest and most sought after talent pool.

Note From the Author

The author wishes to thank the handful of global HR Leaders she spoke with in the course of writing this article, in particular Jignasha Amin Patel, Director HR at Cisco Systems