The Chapman Consulting Group co-hosted discussion groups on the U.S. East Coast for global HR Leaders last week. Sessions were held at the offices of GlaxoSmithKline (Philadelphia); Thomson Reuters (New York) and Credit Suisse (New York). These discussions focused on the latest HR and talent trends in Asia Pacific and other Emerging Markets, with China and India featuring heavily. Key topics were as follows:
Increased Levels of Global Mobility of HR Talent
HR Leaders reported that they are experiencing (and driving) a greater flow of talent around the world particularly to and from major emerging markets. It was noted that companies are endeavouring to provide top talent from key emerging/growth markets with short-term and long-term mature market and headquarters working experience. Participants cited an increase in ‘returnee’ talent, especially to India and other emerging global centers where a growing number of regional and global roles are being located and salary packages are becoming progressively more attractive. Another observation of the group was the need for global HR Leaders to have international (in-market) working experience, preferably including some time spent in major emerging geographies. It was agreed that in future global HR Leaders will increasingly be expected to have geographically diverse resumes.
The Erosion of the Value-for-Money Equation in Emerging Markets
The importance of making the right long-term investment in people was noted by the group. At the same time, the rapidly increasing cost of doing business in emerging markets was highlighted as a concern, particularly in larger, rapid growth markets such as China, India, Brazil and Argentina where talent shortages and spiralling salaries are most evident. There was some lively discussion around the high cost of local talent as well as the strategies that companies are employing to address hefty expatriate costs. There was some variation between companies in terms of the extent to which companies feel compelled to pay full expat package vs. offering ‘local plus’ packages in non-hardship geographies. It was generally acknowledged that the incidence of foreigners being employed on local or local plus terms is definitely trending upwards.
Retention and Development of Top HR Talent
Some spirited discussion revolved around the difficulty of retaining top talent in key emerging markets. Concern was expressed about the ongoing cost of doing this, particularly in geographies where salary increases can be as high as 20%-30% for elite HR (and other) talent who are on the move. As a result, there was keen interest expressed in sharing ideas on non-financial retention measures. Largely these measures were development oriented. Ideas discussed included short and long-term international assignments and ‘double hatting’ roles in order to fast track high potentials.
Although the bulk of the discussion revolved around local talent, it was agreed that multinational companies are generally not putting sufficient thought into the repatriation process. The group observed that expatriates are especially vulnerable towards the end of their assignments as they return to home market roles — and many separate from the organization at this time. Many of the HR Leaders felt their own companies were better at expatriating than repatriating their high potential global talent. They agreed that organizations should do a better job of putting the emerging markets skills and experiences to good use once the individual has returned to her/his home market.
Realistic Hiring Practices in Talent-Short Markets
Another central topic for discussion was the need for companies to align their HR hiring and retention strategies to the level of development of their HR model within the local environment. During the discussion, Matt Chapman suggested that it is often better to try to hire the ‘8 out of 10’ instead of the ‘perfect 10’ — and to hire HR talent based on attitude and potential. This is particularly applicable when the local HR organization is somewhat underdeveloped and cannot offer the ‘perfect 10’ employment experience. The ‘perfect 10’ employee is very hard to retain and the hiring of these elite individuals can create additional pressure for the organization to ensure the internal reality lives up to expectations. The group discussed the notion of hiring HR talent to suit the limitations of the local organization generally and also touched on the importance of tailoring roles to suit the individual in talent-short markets. A related discussion topic in one of the groups was the need for an organization to develop an employer brand which is attractive to prospective employees, yet in keeping with the realities of the local organization’s internal environment.
HR Delivery Models Being Tweaked and Transformed
Another high-interest subject was the large number of companies which are changing their HR delivery models — either through major transformation processes or frequent tweaking. Many of the HR Leaders reported that their organizations were grappling with identifying the right HR delivery model to get the job done, including trying to identify the right mix of global collaboration and local autonomy. A large number were driving major transformation projects on a global basis — some through the use of new technologies and systems; with others deliberately not deploying new technologies until the delivery model itself had been tried and proven. The length of time for the transformation process ranged from 2 to 5 years and there was considerable discussion around the order that markets were addressed (mature before emerging regions or vice versa). The consensus was that there is generally no perfect approach to a complex global transformation process.
Another observation was that complex or heavily matrixed organizational structures can be problematic in emerging markets. The HR Leaders agreed that in these situations, it’s important to ensure clarity and that even within a matrix; a single individual should have dominant ownership for any given function or task.
Matt Chapman, CEO of The Chapman Consulting Group concluded: “Leaders can no longer afford not to be actively taking an interest in the latest emerging markets HR trends. We believe this is why the sessions were so well attended”.
The Chapman Consulting Group will be holding more global HR Leader networking sessions in the United States in mid-October. Locations will be San Francisco Bay Area, Los Angeles, Chicago, New York and Durham, NC. Further details will be advised in the coming weeks.
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