Positioning Your Regional Headquarters – How Location Dictates Whom You Can Hire
Traditionally many global companies have based their Asian, Asia Pacific or Asia Pacific Japan headquarters in either Singapore or Hong Kong. Both locations were seen to be international hubs with a strong mix of regionally experienced local talent as well as large numbers of foreigners. Less frequently, such headquarters were also seen in Sydney, Melbourne, Shanghai or Beijing.
Nowadays we are seeing a definite dispersion of regional headquarters and regional positions across more locations in the regions. Cities like Bangkok, Mumbai, Bangalore, New Delhi, Kuala Lumpur, Tokyo and even Jakarta are joining in playing host to regional stakeholders. This article looks at where best to base regional HR stakeholders and some practical considerations on each location.
Amongst all the locations in the region, Singapore offers one of the best locations for multi-lingual regional HR talent. Virtually 100% of local HR talent speaks English, and many have high proficiency in a number of other languages and dialects. A growing number of foreign HR talent are working on local terms without expatriate benefits, and these people can be attractive cost-wise to potential employers. Regional HR talent is in abundance and is relatively easy to find in virtually all industry sectors.
Similar to Singapore, Hong Kong boasts a large supply of regional HR talent, particularly in the Financial Services , Retail and Manufacturing sectors. Some argue that English skills amongst the local population are not as strong as Singapore. Others argue that the local HR talent in Hong Kong is, conversely, more mature and commercially focused. Salaries for regional talent in Hong Kong tends to be higher than most locations in the region, with many foreign talent having housing allowances due to the high living costs.
Shanghai and Beijing
Shanghai has fast emerged as the third most popular location in Asia for regional HR headquarters, and Beijing is possibly the fourth. Large multinationals such as General Motors, Intel, General Electric, IBM and Honeywell have all shifted their Asia Pacific headquarters to the fast-expanding China market in recent years. Home-grown Chinese HR talent can be found in lower and mid-lever in regional HR positions in China, but they are still relatively uncommon in senior HR positions. Most regional HR leadership positions are occupied by Mandarin speaking Asian talent (often from Singapore or Hong Kong) or non-Asian expatriates. Hiring regional HR practitioners in China can be problematic due to the short supply of mature regional talent, and can also be expensive for leadership position, since most expatriates require full benefits. Smart companies are attracting internationally experienced Chinese talent back ‘home’ to perform regional roles, although many of these returnees will also expect expatriate packages and an international career track.
Sydney and Melbourne
Australia boasts a fair number of regional HR positions, both with US and European multinationals as well as Australia-Headquartered companies such as ANZ, BHP Billiton and Rio Tinto. But the number is small in comparison to Hong Kong, Singapore or China. The difficulty for regional HR stakeholders in Australia is often the distance or time differences that they face in covering Asian markets. HR practitioners in companies with excellent technology platforms or flexible working styles usually succeed best. Australian HR talent, in comparison to their Asian counterparts, boast very mature skills in HR Business Partnering and specialist areas like learning and OD. They are also relatively good value for money, although the current strong Australian dollar is fast eroding their affordability.
Japan has typically been a domestic HR market. This has largely been due to many Japanese HR talent not having English language skills, the high cost of basing regional functions from Tokyo and the inconvenience of travelling from Tokyo. Several multinationals, such as Goldman Sachs, base still base regional HR teams in Tokyo because of the relative importance of the Japan market. Regional HR searches out of Tokyo remain difficult because of the shortage of regionally experienced Japanese HR talent, with most regional HR positions there being occupied by highly paid expatriates.
Mumbai, New Delhi and Bangalore
Apart from Indian multinational companies, we are still yet to see many companies basing their entire regional HR functions in India. However, some companies including Cisco, Abbott, Standard Chartered and Nokia, now have regional HR stakeholders sitting out of India. We expect to see more of an interest in having regional stakeholders base out of India in the future as the market becomes more and more prominent on the world stage. Finding regionally experienced local talent is relatively easy, as their English language ability has meant that there is a significant number of Indian HR expatriates elsewhere in Asia or further afield internationally. The challenge becomes in attracting them ‘home’ as, like with China, many returnees will expect international packages.
Bangkok is home to just a few regional HR positions, mainly in Fast Moving Consumer Goods or Industrial companies. Sourcing regional HR talent in Thailand is extremely difficult, and it is rare to find Thai talent with regional capabilities. Most regional HR positions in Bangkok will be occupied by Asian HR talent from elsewhere in the region or foreign talent from outside. Hiring such talent is expensive relative to Singapore (although perhaps not in comparison to Hong Kong) due to the need to provide expatriate benefits to most foreign candidates.
Kuala Lumpur and Penang
Malaysia boasts more regional HR positions than Bangkok, but far fewer than the other locations already mentioned. Regional HR positions can still be found in Penang with some of the High Tech companies located there, and in Kuala Lumpur with companies such as Danone or UCB. The pool of regionally experienced HR talent in Malaysia is relatively small, and the good talent amongst these can be paid as highly as their counterparts in Singapore or Hong Kong. When performing regional HR searches in Malaysia therefore, some companies will look to attract Malaysian talent working outside the country in Australia, Hong Kong, Singapore or China, ‘home’ to perform key regional roles, although such talent can expect to be highly paid.
Jakarta is perhaps the least common location, so far mentioned, for regional HR positions. The few positions that can be found in the market are usually sub-regional positions covering, most commonly, South East Asia. It is unusual to find Indonesian HR talent with regional experience, although some of prominent FMCG companies are home to such talent. Often these companies have hired high potential Indonesian HR talent, only to send the talent abroad, and then later bring them ‘home’ into key leadership country or sub-regional HR leadership positions. The rarity of such talent make these individuals highly sought after and expensive.
Regional HR positions are uncommon in The Philippines, but do exist among some Fast Moving Consumer Goods, Technology or Professional Services organisations. Most of these positions are occupied by well educated Filipino & Filipina HR talent on international career paths that will eventually lead beyond The Philippines. It can difficult to attract internationally experienced HR talent back to The Philippines and it is not a common assignment location for other Asian or non Asian HR talent.
Taipei and Seoul
Like Tokyo, Seoul and Taipei have few regional HR positio
ns with multinational companies, although some do exist with the larger local companies. The difficulty of sourcing regionally experienced Korean or Taiwanese talent (or attracting them back from assignment elsewhere in the world), generally means that foreign HR talent needs to be hired in on expatriate terms. Seoul can be particularly expensive to house expatriates.
Ho Chi Minh City
Vietnam’s HR market is rapidly developing and the future Vietnamese HR talent will be very strong. For now, there are only a handful of regional or sub-regional HR positions in Vietnam and bar two exceptions that we know about, are occupied by foreign HR talent on expatriate terms.
The sensible approach for most multinationals is to focus much of their regional HR operations in locations where an abundant supply of affordable talent lies. For companies who don’t have this luxury and need to source regional HR talent in up-and-coming locations, the best approach is to be realistic on options with locally sourced talent. A different HR talent-wish-list may need to be adopted, or foreign talent may need to be brought in on expatriate terms.
Smart companies with flexible regional delivery models are dispersing their regional talent in multiple locations, depending on where the person wants to be based or where the strongest candidate for the role is. These regional stakeholders will almost always be on local terms. Such an approach, if the company can sustain it, opens up the talent pool and can be very sensible if the regional team is already travelling extensively.
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