Tips for Recruitment and Retention in Asian Markets: An Interview with Christina Ooi
Asian markets are more important than ever as demand for goods and services in developed economies has slowed. Asia’s share of the world’s total gross domestic product could rise to 40 percent in the next ten to fifteen years, according to the Asian Development Bank. “Relative economic power is shifting from the West to Asia, and this shift will likely endure for a long time,” explains Christina S.S. Ooi, author of Surviving the War for Talent in Asia: How Innovation Can Help. “Western corporations know that their survival largely depends on international markets, particularly in Asia. This is one fact which cannot be overlooked or denied.”
One simple, yet vital piece of information is being ignored, however: Demand for talent in Asia still outstrips supply. Even as the U.S. and other developed nations limp back from the brink to jobless recoveries, companies in Asia are competing for employees from a relatively tiny pool of qualified workers.
The ability to attract and train the best employees remains a key corporate differentiator, yet few companies are attacking the talent scarcity crisis in Asia head on, says Ooi, an eighteen-year veteran of IBM’s Asian operations. In her book, Ooi explains why the talent shortage in Asia is even worse than reported, highlights companies that actually are innovating on the talent front, and suggests possible solutions for what she calls the “Asian dilemma.” InformIT asked Ooi about the important issues IT professionals need to know.
Stephanie Overby: Where does talent acquisition and management fall on the list of priorities for global businesses looking to Asia for growth?
Christina Ooi: Companies have taken talent availability, acquisition, and management for granted for a long time.
Managers and executives in Asia assume that skilled talent will grow with the times as more and more people make it to tertiary education in this part of the world. That is true. But we are not talking about the millions of new university graduates each year who seek employment. We are talking about the right skills and right talent that fit the hiring requirements of organizations. It is a simple matter of quantity versus quality.
Stephanie: Western companies with operations in Asia report that demand for managerial talent outstrips supply. But you say it’s even worse than we’ve heard...
Christina: The pool of right talent is shrinking fast as companies compete for the same employees, fueled by the explosive Asian economic boom and the intensity of the US economic slowdown.
We may never know the full severity of the problem. Some companies in Asia do not flaunt their own weaknesses, such as the talent supply problem, due to the importance of mianzi, the Asian cultural notion of “saving face.” This weakness is considered an “internal” matter; the less known to the outside world, the better.
Stephanie: How different is recruiting and retention Asia than recruiting and retention in the U.S.?
Christina: There is a stark difference between recruiting and retention in Asia and in the Western countries. It’s like day and night.
As Asia thrives on deep cultural roots and tradition, a large part of such traits are evident in its business world. Local talent today faces tough challenges as they struggle to balance Eastern and Western cultures because of demands for global integration and delivery of performance at international standards.
Professionals are strongly influenced by guanxi, the centuries-old Chinese custom for getting things done through personal relationships. There is a common saying in Asia: Employees are not loyal to companies. Indeed, they owe their allegiance and loyalty to the people who hired them and who have nurtured and mentored them.
In developing innovative talent management programs for employees in Asia, companies need to be mindful of the element of guanxi deeply entrenched in Asian culture. Trust and personal relationships are critical. People must know that their managers and leaders are sincere and mean what they say. It’s simply the “Asian thing.”
Stephanie: Do the best practices — and worst practices -- for talent acquisition and management in Asia vary by country?
Christina: I don’t believe so. The borders of countries, regions, and cities in Asia have become blurred due to factors such as global resourcing and talent mobility.
Asia has a relatively lower standard of living than its Western counterparts and has been under-investing in talent development efforts. So it is no surprise that Asia is losing some of its best talent to other parts of the world. Today, highly skilled people in Asia are prone to go where the pay and employment benefits are attractive and with better quality of life.
The key indicators of what works best in a given locale is dependent on the demographics of the employees that managers are hoping to lure. If your best and brightest candidates are women, you need to be innovative about how to recruit them. Women are generally less mobile than their male counterparts. They often do not accept international work assignments. They may not even move to a different city or a different province in their home country for a bigger job role. This attitude is largely influenced by the Asian cultural norm that a woman’s place is in her home, not in the office.
Stephanie: “Innovation” and “creativity” aren’t words that usually spring to mind when talking about human resource (HR) management anywhere in the world. What do you mean by ‘innovation’ and why is extra effort required in Asia?
Christina: I would describe innovation as any fresh thinking that creates value. Innovation does not necessarily need to involve new ideas; often, it is an improved version of an existing idea.
Innovation is slowly finding its way into the hearts and minds of companies in Asia. Managers and leaders have to wake up and embrace innovation wholeheartedly if they want to play a role in addressing business challenges as they strive to stay ahead of competition.
Stephanie: You say innovation needs to happen throughout the HR lifecycle, from recruiting and hiring, to on-boarding and training to retention and grooming...?
Christina: Absolutely. Every HR manager or leader in Asia needs to assimilate innovation into their DNA. The question is, “Are they ready to embark on this change?”
In the book, we highlight proven success stories told by those who have embraced innovation.
One outstanding example is Infinitus (China) Company Limited. They say that much of their success can be attributed to the corporate culture they’ve created: a fun, high trust, and team-based environment that allows people to unleash their full potential. Their CEO says the first criteria for hiring is cultural—not technical—fit. The leaders know they have to think in a more innovative way to win the war for talent, and they’re doing that whether it’s in employee communications (afternoon tea with the vice president), employee recognition (rewards for high performance teams), or employee assessment (face-to-face individual and team feedback, nicknamed ”brutal reality” in the company).
Another company worth mentioning is the Aditya Birla Group with an origin in India, which has innovative home-grown ideas on talent management. The $28 billion company has roots as far back as the 19th century. Its founder was known to say, “Your men will be as loyal to you as you are to them.” The company continues to foster employee loyalty as it grows to a staff of 100,000. Secondly, they emphasize meritocracy; employees earn their opportunities. Finally, the diversified conglomerate offers wide career opportunities to its best and brightest—whether they want to try our business process outsourcing in Canada, mining in Australia, or a stint at the world’s largest rolling company in Atlanta, Georgia.
Stephanie: How about worst practices? Are there common mistakes you’ve seen managers in Asia make time and again?
Christina: I am most saddened when companies do not practice what they preach. They may be cognizant of the changes happening in the talent management space. They may have innovative ideas to stay ahead of competition. But they don’t follow these innovative ideas through to completion.
The worst practices I’ve seen are companies that lose steam. It is very easy to find reasons why things cannot be done, or to succumb to distractions or temptations. Without a strong thought leadership team, things easily fall apart along the way. As with all strategies, execution is the cornerstone of success.
Stephanie: Why do managers in Asia need to rethink retention strategies? Aren’t most people—whether they live in Saigon or San Francisco—primarily motivated by the same things?
Christina: All people are primarily motivated by the same things. The world is a much flatter place in this day and age.
Let me share with you the Singapore experience. Singapore was a victim of brain drain. It has lost some of its best talent to other parts of the world, where the pay and employment benefits were more attractive and there was perceived to be a better quality of life. In order to curb the problem, the government embarked on a three-pronged “brain gain” approach: Strengthen that talent infrastructure with investment in education, position Singapore as a distinctive, cosmopolitan country attractive to highly mobile professionals, and make Singapore a center for leading human capital practices, expertise and capabilities.
The question is, what employers can provide that kind of total package to Asian employees? It’s an employee’s market. Good talent is scarce and will go to where they see quality living and a clear roadmap for their careers.
Stephanie: It’s not just multi-nationals lured by the promise of the Asian markets. Mid-market companies eye future growth there as well. How can they compete for talent against the likes of big names like Google or IBM or local Asian leaders?
Christina: Size does not matter. What matters is the companies’ corporate culture and how they treat their employees. You can be a giant like IBM, but if employees do not see a long-term commitment to values such as trust and respect, you will fail.
Stephanie: How can companies solve what you call the “Asian dilemma”—the struggle to balance Eastern and Western culture in a market that demands global integration?
Christina: The Asian dilemma can be overcome by capitalizing on the strengths and wisdom of the Asian traditional culture and applying them as a complement to the Western way of doing business. The next generation of talent for Asia needs to be thinkers and innovators, not followers. These leaders need to have the drive and passion to lead through innovation, influence, and collaboration coupled with the traditional values of guanxi and mianzi.
A good example cited in a May 2008 McKinsey Quarterly's article on "How Chinese companies can succeed abroad," [link requires registration] is Huawei, a Chinese company that recognizes the importance of beefing up the skills of its local talent who lack global experience. It’s embarked on an aggressive pilot program that includes global recruitment, competitive compensation, job rotation, and mobility. Managers are then put through training to communicate with foreigners, resolve conflicts, delegate responsibilities to their subordinates, coach their direct reports, and have difficult conversations with their colleagues. Some of this goes against what they’ve been taught in traditional Chinese culture. But they know they have to improve their soft skills if they want to compete with foreign talent.
Stephanie: A major pain point for multinational companies in Asia is finding managers with significant enterprise experience. Some Asian markets are just too immature to have the depth of management talent corporations have come to expect. That’s not a problem that can be solved overnight.
Managers and executives in Asia assume that skilled talent will grow over time as more and more people make it to tertiary education in this part of the world. But the Asian talent pool has not kept up with the surge of demand for highly sophisticated skills.
You can’t just hope for the best. Common sense tells us that we must be in absolute control of something as crucial as finding managers with real enterprise experience.
When it comes to top managerial talent in Asia, you must know where to find it, how to grow it, and how to keep it for as long as possible. The simple truth of the matter is that as long as the supply side of the equation is well managed and controlled, it doesn’t matter how the demand for managers with real expertise experience rears its ugly head!
Stephanie: Confession time. What mistakes have you made as a manager in Asia and what did you learn from them?
Christina: If I were able to turn back the clock, I would want to "let go" and empower our people more, to provide them with more opportunities to be independent and to prove their mettle. I should have spent more time coaching and mentoring my direct reports and extended teams. I later discovered how well mentoring works in Asia; guanxi acts as a kind of glue in the relationship between the mentor and the mentee. It’s an excellent way to build a good working relationship with employees and to foster loyalty and respect.