Retaining Key Local HR Talent in Asia – 10 Tips for CHROs
In this article we look at the on-going struggle of retaining gifted Asia based HR talent and what CHROs and business leaders can do to minimise risk.
We recently met with an American CHRO who was visiting Singapore. We spent 30 minutes lamenting the loss of her talented Asia HR Leader to another company. The CHRO could not understand why the high performer had left. The company, a leader in its field, had promoted this individual quickly; paid them handsomely in base salary, bonus, stock options and retention bonuses; offered work/life flexibility; supported them in building a high performance regional team; offered a global assignment and the list goes on. From the CHRO’s perspective, facts would appear to indicate that their Asia Pacific HR Leader’s situation was unbeatable and there would be little or no retention risk. Now after two years, this CHRO is forced into another external search to fill this valuable position.
The retention of top HR talent anywhere can be a headache — but nowhere is it more of a headache than in some of the key Asian growth markets. Below are ten ‘tried and tested’ approaches to retaining the best and brightest high potential HR leadership talent in Asia.
1. Hire right in the first place
If you want the best, you pay above market, especially in Asia where the cost of HR leadership continues to escalate. But don’t let money become the ‘be all and end all.’ And better still, when hiring externally or promoting internally for the HR position, steer away from individuals who are fixated on money. Someone out there will always be able to pay them more. Look for HR Leaders who accept the “x” factors you are offering. This could be a combination of things, such as the company culture, your leadership style, the team structure, the geographies they are covering, the class of plane travel (surprisingly frequent) or the office address. Try not to go for square pegs in round holes in terms of having to over-sell the position. If you feel you are working too hard to attract them, take this as a signal that you probably are. It’s best to recognise that these relationships follow a predictable path and often end the way they start. If you feel that you are ‘begging’ to get an HR Leader in the door, you will likely find yourself working just as hard to keep them later on — as they head out the door.
2. Think beyond ‘total cash’
Make sure the HR Leader buys into your remuneration program because ‘total cash’ as opposed to “base salary’ is often less well understood and less appreciated in Asia than in other regions. If they are going to be paid very differently to their previous company, in terms of the mix of pay components, make sure they fully understand and accept this. Similarly, if you are going to drop, keep even, or marginally increase their guaranteed cash component just because the bonus potential is greater, you will need a certain type of individual who is motivated by high discretionary pay — and these tend to be less common in Asia HR. This said, we have seen it work in the reverse too, where someone coming off a high discretionary remuneration system becomes unmotivated when given a higher base salary and lower discretionary component. Stock option programs are a great incentive when the stock is “in the money,” and the opposite when the price is trending in the wrong direction. For multinationals, it’s generally difficult to deviate too far from the global or regional HR or business policy, but sometimes there is the possibility of tailoring benefits or allowances around what individuals need. Compensation and benefits programs that work globally but can be customised at a local level are becoming increasingly popular — and necessary to attract and keep the best talent.
3. Promote from within if at all possible
Contrary to what most people would think, we would much rather do less HR search work with companies which prioritise promoting from within, than more work for companies which do not. This is because companies which promote from within tend to be the most attractive career destinations. A more attractive employer brand means a more efficient search process for us — and it strengthens our own brand when the HR community sees us working with the most desirable companies. Nowhere is this more true than in Asia, where local talent can also face a ‘glass ceiling’ with expatriates brought in from other geographies. We are frequently surprised by less-than-ideal internal HR talent planning in some organisations, which causes the need for an external search in the first place. The best companies put effort into building multiple successors early — and this is tricky in Asia where talent is in short supply and the best people are notoriously difficult to retain. It is hard to manage, and you may need to be both creative and determined in job rotation across geographies or specialisations. However — it can be done. We are aware of some organisations which almost never go out to search for their top HR roles. These companies are particularly passionate about having an oversupply of HR talent; moving business talent into HR; moving HR talent quickly across geographies to fill gaps; and most of all, engaging in long-term career planning (see below).
4. Decide if your HR leadership role is an assignment position or should be filled locally
By this, we mean communicate clearly to the HR team around Asia Pacific what the intention is — both short-term and longer-term. There needs to be clarity about whether the company’s preference is to grow talent from within the region, to continually take over the senior HR roles in the region; or whether positions will be equally (or more) available to assignees from headquarters. Local talent can become quickly disenchanted if messaging is unclear, or if there is a view that a glass ceiling exists. If the role is going to be an HR assignee role, make that clear, so talent is brought into the organisation knowing that they will never get the leadership role. Alternatively, make it clear to them that they should do an international assignment themselves, in order to be considered for the top Asia job.
5. Continually take the temperature of your relationship
You’re sitting at a U.S. or European headquarters and you’re on the phone to your Asia HR Leader once every two weeks, and seeing him or her physically four times a year. You think you know where your relationship stands. And maybe you do. However, it’s worth keeping yourself honest on whether your feelings of trust and friendship with your Asia Pacific HR Head are “up to date,” as well as ensuring that they are transparently representing their feelings. Make sure you are also culturally astute and take training or advice from others if you are not. One of the biggest mistakes we see is global HR Leaders using their home market lenses improperly in managing HR talent from different cultures.
6. Sometimes, ‘the best’ isn’t good enough
We all want the best. It is easy to get excited by the opportunity to hire someone from one of the slickest HR brands, only to find that once this person comes into your company, the HR or management structure is inadequate to keep them motivated; or they struggle to fit into the new culture. It’s important to remember that not everyone fits your model. You can aim to always hire the best HR people, but caveat this with a rule that they should be able to demonstrate a fit with your company structure or culture. This might be evidenced by either their past track record or their attitude. Importantly, be realistic about the state of your business, your employer brand and your HR capability in Asia. Sometimes your readiness to hire and retain ‘the best’ can be very different from your headquarters or more established geographies.
7. Minimise risk by engaging in long-term career planning
Engage in regular visioning exercises with your HR Leaders: ‘Wher
e do you want to be in 2 years, 5 years? What’s important to you?’ Overlay this with three or four different career routes, so the leader feels they are not locked into one option and most importantly, ensure that he or she hears your views on how you regard their future. Hopefully you can evidence this with real-life examples of past HR talent transitions and success stories. If there are none, make it a goal to create them quickly. In Asia, careers are taken relatively seriously and ‘something to aim for’ is extremely important to ambitious and hungry HR talent in the region. Remember that due to Asia’s shortage of HR leadership talent, your HR Leaders will be receiving daily calls from companies wishing to engage with them. Each of these companies will be painting a rosy picture about the career prospects on offer.
8. Not everyone is mobile
In reality only a small percentage of HR Leaders in Asia are mobile from Singapore, Hong Kong or China into North America or Europe. And as much as we talk about Global HR Head roles moving to Asia, and indeed they are, most will remain in the global HQ location. Pressuring Asia Pacific HR Leaders to think about global career moves is not always wise. Unless you have specifically recruited individuals who have been told they should be mobile at hiring stage, it’s best not to make assumptions. For those who don’t necessarily wish to live and work half a world away, other Asian locations can often make a lot of sense to ambitious Asian HR Leaders who wish to stay within close proximity to their home markets. Culturally and language-wise, moves within Asia can also offer an easier and less risky transition.
9. Do not underestimate how competitive a predator company can be
With a talented Asia Pacific HR Leader supposedly sitting pretty in your company, it’s easy to forget that other smart companies can sometimes patiently and persistently engage the interest of your leader in an even better opportunity. It can often become a situation of “excellent versus amazing” in terms of your company versus a potential new one. The battle is indeed yours to lose, if you are smart and on the front-foot. However, it is also very easy to forget how little great HR talent there is around; and you can easily under-estimate the lengths that a competitor company may go to, in order to secure your HR leader. More recently, some of the strongest competition for talent has come from Asian multinationals. Cash rich and hungry, these companies are often able to appeal to nationalistic pride, or offer very locally tailored compensation and benefits packages. As a result, the best of the Asian companies are now competing very effectively for talent with Western multinationals.
10. Accept that sometimes people just need to move on
Sometimes people just need to move on. Often it’s because the grass is greener on the other side; other times they just wake up one day wanting a sabbatical. Often, you can’t rationalise it. You can try to counsel and even counter offer, but on occasion it’s a fruitless exercise. In that case, accept it and try to keep the long-term relationship. Who knows – the person may realise they have made a mistake and come back. They may work for you in your next company. You may even end up working for them one day. The smartest HR Leaders we know make a point of staying in touch and not burning bridges. In a market like Asia, where business can be all about relationships, this counts for a lot and taking a longer-term view generally pays off.
In Asia, it’s a fallacy that ALL HR talent moves about. We have seen some very large HR teams that have remained intact for more than a decade. It’s true that talent retention in Asia can be trickier than in other geographies, due to the rapid pace of economic growth and development in the region, which continues to drive a chronic shortage of multinational-friendly HR professionals. Interestingly, but not entirely surprisingly, more and more of the success stories on retention are coming from local Asian companies. We do find that the difference between very smart CHROs who concentrate on this topic and those who do not is quite drastic, in terms of the impact on global HR turnover in the company. At the end of the day, both turnover and retention are driven from the top. And perhaps when we think about this, we are reminded that HR still has some way to go in developing and nurturing its own talent.
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