Employers in fast-growing markets in Asia-Pacific are on an accelerated growth path and possess the necessary strategies and approaches to keep them ahead of their counterparts in the region’s developed markets, according to a survey conducted by professional services company Towers Watson.
The Towers Watson Global Talent Management and Rewards Survey (TM&R), a study of 1,605 companies globally, out of which 796 are from Asia Pacific (AP) – 289 from developed markets and 507 from fast-growing markets, found that market conditions and varying economic stages of development
have a firm bearing on how organisations manage talent.
Attraction and Retention Drivers
The outlook of employers in fast-growing and developed markets is very different. One stark difference is in the area of attraction – in fast growing markets, base pay is ranked as the top driver by employers, whereas for developed markets, base pay is ranked in the 8th position. For developed markets, the top driver is challenging work.
“This variance throws up a worrying trend – employers in developed markets do not understand the needs and preference of their employees compared to fast-growing markets. Our Towers Watson Global Workforce Studies shows that base pay is a top driver of attraction for employees in Asia Pacific, and this clearly shows a mismatch,” said Dhritiman Chakrabarti, Asia Pacific Leader of Rewards at Towers Watson.
For developed markets, the top three drivers of attraction are challenging work, career advancement followed by job security. For fast-growing markets, the drivers are base pay, career advancement and job security.
In terms of retention drivers, both developed and fast-growing markets share the same top three drivers of base pay, career advancement and relationship with supervisor/manager.
From the survey, it also emerged that employers in fast-growing markets are ahead of their Asia-Pacific and global peers in addressing some of these attraction and retention challenges.
Challenging labour markets in their markets have pushed them to adopt more tailored approaches in managing their talent – in the form of higher adoption of workforce segmentation in their HR practices.
“Segmentation of the workforce is a best practice that enables organisations to plan their talent management strategy through more effective design, and a typical approach is to segment by talent categories, for example critical-skill, top-performing and high-potential employees,” said Clare Muhiudeen, Managing Director, Talent & Rewards, Asia Pacific, Towers Watson.
A higher percentage of employers in fast-growing markets segment their workforce according to talent categories, i.e. they have formally identified their critical-skills, top-performing and high-potential employees, compared to developed markets.
The greatest disparity is in identifying top-performing employees – 82% of employers in fast-growing markets have this in place compared to only 52% in developed markets. For critical-skill employees it is 70% and 50%, and for high-potential employees it is 65% and 54% for fast-growing markets and developed markets respectively.
The prominence of such talent management practices in fast-growing markets illustrates the aggressive appetite they have to compete in the global arena, a point highlighted in the recent Towers Watson study called Asian Trailblazers. This has serious implications for global multi-nationals, state-owned or government linked companies and local enterprises alike, as it is now a global playing field for key talent.
One of the similarities in developed and fast-growing markets’ talent management is in the area leadership development. Both categories focus on leadership development as a key area of focus for pivotal employees – 79% for fast-growing markets and 76% for developed markets, followed by monetary rewards in the form of base pay and short-term incentives.
The TM&R survey also surfaced some interesting and surprising insights – fast-growing markets seem to have better infrastructure in place to manage talent mobility in their organisations compared to developed markets.
The numbers tell a story that contrasts with a commonly held view: 62% of fast-growing markets have cross-cultural teams in place compared to 30% for developed markets. As well, 54% of fast-growing markets have processes to formally identify employees who are internationally mobile compared to only 24% for developed markets.
A huge differential also exists in the availability of programmes to train managers to manage cross-cultural teams, with 51% in fast-growing markets and only 17% in developed markets.
“One reason for this contrast could be because of the vast growth opportunities available in these fast-growing markets. Business expansions have driven these companies to look further afield and therefore have developed cross-cultural teams, tools and processes and training programmes to ensure that they have the right talent mix to meet business objectives,” said Dhritiman.
“This is consistent also with our Asian Trailblazers study, where Asian MNCs have adopted well-defined globalisation strategies. They understand the need to evolve quickly and to adapt to the challenges of the new global landscape they are shaping,” Dhritiman said.
Cost of mobility is the biggest concern for both market categories: 48% for developed and 45% for fast-growing. This is followed by employees’ unwillingness to move: 45% for developed and 33% for fast-growing.
Owing to differences in business cultures and varying degrees of economic development, employers in Asia-Pacific are faced with different talent management challenges across different markets, which in turn call for a higher degree of differentiation in managing talent within the region.