GROWTH IN Asia has made human capital challenges in the region increasingly acute and has intensified the competition for talent, according to a recent study.
Commissioned by Singapore’s Ministry of Manpower and conducted by Hewitt Associates,the study identified three critical talent challenges that organisations in the region need to overcome.
The first challenge can be characterised by a paradox in capability. Asia is experiencing a tight labour market, especially for skilled professionals and talent, even though it contains some of the most populated nations. The relatively small talent pool in Asia has resulted in a leadership crisis in many organisations and an impediment to future growth.
The second challenge comes under the umbrella of shifting cultural norms, and organisations in Asia are being confronted with a shifting set of cultural norms that shape the value systems of their employees.
Asia’s workforce is increasingly focused on the individual. While life-long employment with one employer used to be common, employees are now changing jobs more frequently and are constantly searching for better employment opportunities.
A significant turnover rate is expected in critical talent roles including managerial and entry level positions in the next three to five years,according to Singaporean residents.
Organisations have also replaced seniority-based employment with an emphasis on results and performance.
A third challenge is in the changing nature of employment contracts. With greater emphasis on performance and customer orientation,employers have to provide their employees greater independence,empowerment, flexibility and challenging work if they want to attract,motivate and retain the best workers.
“We are now seeing a supercharging of these issues – shortage of talent and lack of experienced leaders – in environments where companies are trying to grow 10 to 50 per cent,” said Andrew Bell, Hewitt Associates’global leader for talent and organisation consulting.
“The rapid flow of capital from West to East, where more than $US1 billion ($1.17 billion) a week, for instance, flows into China to establish new businesses, continues to sustain these challenges.”
Leo Yip, Permanent Secretary for Singapore’s Ministry of Manpower,said that companies operating in Asia – the largest emerging market in the world – will face people challenges unique to the region.
“Adopting effective people strategies to address these challenges will be critical to leveraging the full potential of the region’s workforce, and to sustained corporate competitiveness,”he said.
The sheer speed and impact of the talent landscape on organisational success make it even more necessary that organisations in Asia pay close attention to the three key human capital imperatives – programs, people and performance, according to Hewitt Associates.
The right talent programs create high-impact solutions to meet current and future business needs. Organisations,therefore, need to proactively develop these programs, which can range from strategic sourcing to retention and future opportunities for growth.
“In Asia, the driving force is growth and more specifically international growth,” said Indraneel Roy,global head of leadership consulting for Hewitt Associates.
“Asia has seen a 10 to12 year influx of investment. Now, home-grown Asian companies are more aggressive and courageous. Asian companies are pushing to see how fast they can grow and how big they can get.”
Organisations in the region with this kind of ambition need an aggressive human capital agenda which cuts across talent programs, the talent they have and how they professionalise their HR function, Roy said. “Without this agenda, dreams will remain just that – dreams.”
To underscore the importance of effective people strategies for the growth and success of a company,Ong Ye Kung, chief executive of the Singapore Workforce Development Agency, said that many companies have realised that HR work no longer comprises traditional functions such as payroll processing and staff welfare.
“It is much more than that, including talent development, organisational excellence, and moulding the culture of the organisation. This also means that HR work is no longer the job of just HR executives, but the job of everyone in the company, especially the bosses,” he said.
Details of the Hewitt Associates study, with recommendations on how organisations can respond to human capital challenges in Asia, will be presented at the Singapore Human Capital Summit: People Strategies for Asia, to be held 22 to 24 October,2008.