Normally when invited to express thoughts on any subject, my natural inclination is to say ‘yes’, and you can well imagine how my urge to express myself in external world would have gone up over the past two and a half decades of being married!
And now on a serious note—the subject in reference is one that the whole world is viewing with high interest and given my limited expertise in it, I have decided to only present some facts—leaving the job of drawing intelligent inferences to this august audience!
And in any case, my teacher has taught me—“those who have opinions don’t have facts, and those having facts need no opinions”—I have decided to take an easier path!
Here are some key facts:
A: Global scenario: According to the International Labour Organisation (ILO),in a world of six billion people, the number moving to work or settle in other countries is less than 3%--which looks small as a percentage, but when you look at 3% of six billion as 180 million people, then you know how large is a pool of people who are working outside their country of origin! And now, if you add to that the huge flow of business travelers and people travelling on temporary assignments, this number assumes further larger proportions.
B: Recent historical phases of migration in some parts of Asia: In the 1970s and 1980s, the oil-rich Middle Eastern Asia needed a lot of un-skilled/semi-skilled workers. Many Indians, Pakistanis, Thais, Filipinos, Indonesians and Koreans went there as a result of this demand. In the 1990s though, this churn touched even the skilled segment-- then this flow slowed in the late 1990s in the wake of the Asian crisis and seems to have resumed yet again. While the middle-eastern countries have largely remained as destination countries, many other countries in the region, such as Malaysia and Thailand, have become both source and destination countries for the moving talent population.
This flow simply suggests that there are not enough people locally available to do certain kinds of work essential to the smooth functioning of an economy – a classic case of skill-demand-supply mismatch! In Singapore, three out of ten workers are foreigners. And in Malaysia, there are over one million Indonesian workers alone.
One obvious question here would be: How critical is this subject from the national economy perspective? While there is a detailed answer possible to this seemingly simple question, for want of time, just one example of the Philippines should underscore the importance-- the export of labour for them is their number one export item, which brings them billions of dollars in foreign remittances.
C: China and India: some high-level realities: These are two countries that are increasingly making long strides in receiving back their lost talent and also are attracting additional foreign talent. Like the Koreans and Taiwanese who left in an earlier period and returned in the 1990s, the Chinese are coming home because there is remunerative and challenging work for them.
India, too, is attracting a growing return flow of NRIs (non-resident Indians) who have studied and worked abroad in the US and elsewhere. Some are on temporary contracts while others, having built up their earnings abroad, want to settle down in their home countries.
This new trend in tech talent and funding flow to China and India is one of the hot topics under discussion in the United States. "We train the students, they go back, and we send venture capital funding out to follow them," said one of the CEOs there very recently.
D: Asia is now the major battleground in the Global war for talent : McKinsey calculates that China alone will see a 22-fold increase in the demand for globally experienced leaders over the next decade, other parts of the region are going to witness similar shortage challenges! As a result, data is already revealing a 20% year-on-year growth in the number of executive searches underway—this will lead to explosive expansions of global search firms and consolidation in that sector is also round the corner, where local firms will have to fight or perish in the wake of such war.
The StepStone Total Talent Report 2008, researched and prepared by the Economist Intelligence Unit, concludes that “the idea of Asia as low-cost utopia with an abundance of labour is long-gone”.
Executives in Asia cited four major recruitment and retention obstacles which businesses faced:
rising wage and pay demands among potential candidates
a lack of suitable candidates to recruit and a lack of appropriate skills among potential candidates
a perceived lack of career opportunities among current employees
employee perceptions that pay and benefits could be better elsewhere
E: Students as the leading indicator of global talent flow: In a recent issue of the Harvard Business Review, Richard Florida identified students as the leading indicator of global talent flow, stating that countries and regions that attract students have an advantage on retaining them and attracting additional pools of talent. Some significant trends in this regard are captured below:
* North Americans prefer stick closer to Home
* Major Shifts in Western Europe, Central Asia, and the Middle East-- Citizens of Western Europe, Central Asia, and the Middle East displayed dramatically reduced interest in US programs and among all citizens of Western Europe, the data show an increasing desire to remain close to home.
From citizens of Central Asia, India gained the most market share from the decreased interest in US programs. In addition, citizens of Central Asia displayed increased interest in studying in England, Singapore, and Canada.
* Minor Shifts in Eastern Europe, Asia, Africa, and Latin America Students from Eastern Europe, Asia, Africa, and Latin America consistently prefer US programs, but even here, slight declines were noted. In Eastern Europe, this decline in US programs was countered by increased interest in programs located in England and France.
*Oceania Bucks the Trend Contrary to trends noted for all other world regions, citizens of Australia, New Zealand, and the Pacific Islands (Oceania, collectively), displayed increased interest in US programs over the years reported.
*In essence, US business programs, which have long been the primary destination of GMAT examinees, are facing increasing competition from England, France, and India.
F: Talent Attraction is the biggest challenge:The 2008 Vedior Asia Pacific Employment Trends Survey reveals attracting talent is a struggle for more than two-thirds (69 per cent) of organisations. While retention was the key issue in 2007 for Asia Pacific based organisations, attracting talent is cited as the biggest human capital challenge over the next 18 months for 26 per cent of Asia Pacific based organisations, with retaining talent a close second at 24 per cent.
And competition for talent is set to intensify further in 2008, with 42 per cent of Asia Pacific based employers looking to expand their current workforce in 2008, a significant increase from 28 per cent in 2007
And now let’s take a look at some pointers—hopefully towards potentially successful ‘coping strategies’:
*Create flexible Organisations:In such volatile talent shortage conditions, not only is a talent management strategy vital but so is technology which allows an organisation to put the strategy into action and identify where talent gaps exist, or where headcount could be rationalised. Whichever way the world economy turns, having the knowledge and agility to make swift decisions on the company’s employee base could make all the difference in being able to retaining the best people and maintaining business momentum.
* Reach-out to newer talent pools: Consider strategies to penetrate a relatively dense 'passive' candidate market.
* Understanding minds of the candidates: The laws of attraction in recruitment are being rewritten by candidates who make decisions about a potential employer based on both an emotional and a rational level.
*Improve focus on Employee branding: With the realisation that the shortage of talent is having an adverse impact on the bottomline, employer branding is likely to be an important anchor of talent attraction/retention strategy.
One study reveals that 63% of Asia Pacific based organisations believe their employer brand attracts and retains employees, however, 60 per cent admit there is still more that can be done to improve their employer branding strategy.
*Focus online and digital media: This will enhance outreach in a cost-effective way
*Assess and re-assess how the talent gaps are being filled: As the pressure to attract talent intensifies, the survey shows that many organisations continue to be forced to look offshore. Whilst the UK continues to dominate the supply of international talent (58 per cent), India (22 per cent) and China (15 per cent) are becoming an increasingly attractive source of candidates for the region.
*Foster diversity: "The 2008 Vedior Asia Pacific Employment Trends Survey supports the idea that organisations will need to continue to broaden their HR strategies to be all inclusive and foster a diverse workplace. Every person is unique in ability, background and experience, so taking a 'one-size-fits-all' approach will result in missed opportunities and a less prosperous workforce,"
Hopefully, this will at least help us put some structure around any further discussion that needs to happen on this vital subject.