The 'talent war' in APAC ? fact or fiction? PART I @ RPO and Talent ...

Posted by Jon Hull, Head of Resouring, ElectroComponents
APAC talent management
Posted on May 25th, 2012 at 9:14 am

In 1997 McKinsey published the report ?War For Talent?. This paper suggested that businesses across the western world were suffering a shortage of talent/leadership across varying levels and this was potentially hampering growth and development.? The focus of this so called ?war? has shifted to Asia, because of western multinationals? focus on the East. And as the West faces the biggest economic downturn in generations, the stakes are seemingly higher. However, have we really learnt anything from the original ?war?? Indeed was there really a ?war? going on? Are we better equipped to deal with challenges in demographic shifts and a culturally diverse region?

The original report has spawned an industry of self-styled talent management consultants who claimed to have the magic bullet. The question has to be asked; are we really any closer to solving the problem? Have lessons really been learnt or did we just make the wrong assumptions all those years ago? Current research by the CEB has suggested that the biggest challenge for western multinationals in APAC is the ability to find and/or grow suitable leaders. It seems HR cannot perform one of the key tasks it is asked to deliver. How do we attract, develop and retain suitable talent that will deliver results for the business and build a sustainable business platform?

The original McKinsey report was very light on defining what talent is. This has led to a misinterpretation of the central argument and has meant that in the past companies were caught up in a zero sum game of ?Who Pays Wins?. This is no more obvious than in the Investment Banking Sector during the mid-2000s. This approach did not lead to a sustainable, long-term future for many organisations. In fact, it might be argued that this led to their downfall. And now this seems to be the prevailing narrative about the APAC region. Speak to any executive (especially western) and the belief is the only way to solve the talent issue is to pay more because ?this is the culture?. Perhaps this argument is a little myopic because this does not take into consideration the diversity of the region. The drivers and social forces from Japan to China to Singapore and Australia are multifarious. It is lazy to paint Asia as one homogenous region, but convenient for western executives.

There is perhaps an indication that this is starting to shift. ?According to recent research (CEB ? 2011 Drivers of Engagement) and some of our own Employee Engagement surveys some of the driving forces behind engagement in the region are similar to those in Europe and North America. In the CEB report the biggest driver of retention for employees across the APAC region lies in their ability to see a clear career path and understand what they need to do to progress. This is at odds with a prevailing and very narrow view that the highest bidder wins.

Imagine the paths of two graduates, one in London and one in Shanghai embarking on their new careers. In 2012 both have equivalent educations, live in capitalistic societies that drive self-improvement and achievement. The desire for social status is common. Arguably they have more in common than divides them in terms of the need to be inspired, engaged and motivated by the company they are working for. If both are middle class, basic needs have been met and we are assuming a sophisticated, intelligent individual who has an ability to make complex choices. Suggesting our graduate in China is more likely to move for an extra ?1 per hour because that is his culture is not only patronizing and wrong-headed, but is also perhaps the source of the problem.

If business leaders are going to the Middle East with the offer of more money they are simply feeding the problem. As one organisation uses money as an incentive, their competitors will in turn do the same and we will continue to be in the same situation. If organisations changed their incentives it is more likely employee mindsets will be changed too.

This then leads to the central question about talent and whether we have ever been in a ?war for talent? or we simply don?t know what we are looking for. If McKinsey were ?light? on the definition of talent then companies we?re guilty of not thinking about what this really meant. During this time, in the West, our economies and companies grew at a substantial rate. Arguably, and this is where the leadership question is most relevant, not sustainably and at quite a high cost that we are paying for now. It seems that western business models have not learnt from mistakes of the past.

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