Talent Acquisition in Emerging Markets: More than Just the Money (Part Two)

If talent is scarce, its price will be driven up. Fully 86 percent of executives surveyed at corporate headquarters agree that salary inflation is an issue with existing staff in the Asia-Pacific region.

Even in Latin America, where the talent shortage is not seen as being such an important issue, 71 percent of interviewees at corporate headquarters identify salary inflation as being a problem. This is supported by Hewitt Associates, which reports that workers in Latin America experienced the second-highest salary increases in the world in 2007 (just behind Asia Pacific). Hewitt reported average 2007 salary increases of 16 percent in Venezuela, 13 percent in Argentina, 5.9 percent in Brazil, and 4.9 percent in Mexico.

Meanwhile in Asia Pacific, evidence for continuing salary inflation is supported by Mercer's 2008 Global Compensation Planning Report, which predicts average across-the-board annual salary increases of 14.1 percent for India, 11.9 percent for Vietnam, 7.5 percent for China and 6.4 percent for South Korea. These figures compare with average increases of just 3.7 percent for the US and around 3.0 percent for Western Europe.

The evidence for salary inflation is supported by another section of the study, in which the in-market interviewees were asked to discuss their salary expectations if they were seeking a move to another company. Most expect an increase in basic salary of around 20 percent for a lateral move to a position at the same level, with the average expected increase being 21 percent in Asia-Pacific and 18 percent in Latin America. This is almost as much as the expectation for a move to a position at a higher level, for which the average expected increase would be 27 percent in Asia-Pacific and 29 percent in Latin America.

Career Motivations and Expectations

In order to attract top talent in emerging markets, it is important to understand their career motivations and expectations. These executives know they have a choice. They may want to choose organizations with a strong brand or good ethical reputation; they may be attracted to working with high profile industry leaders; or they may simply be motivated by material rewards.

To explore these elements in some detail, the in-market executives were asked to rank various factors associated with potential future positions in order of importance. The executives at corporate headquarters were also asked to rank what they considered to be important factors influencing an individual's choice when deciding on a future employer. The results are illustrated in Figure 3.8, Figure 3.9, Figure 3.10, and Figure 3.11.

• Profile of the Position
Most of the interviewees see the Profile of the Position as being the most important factor in a future job, with this ranking first in Asia-Pacific and second in Latin America. Clearly, and unsurprisingly, these high-potential executives are ambitious, motivated individuals, and they expect to see themselves in high profile positions in the future. However, this ambition is not recognized at corporate level; in the responses of the corporate headquarters interviewees, just seven percent in Asia Pacific and 16 percent in Latin America rate the Profile of the Position this highly.

• Learning and Development
The in-market executives interviewed also like to challenge themselves and learn, and see the potential for this as being integral to any future career move; well over 95 percent of interviewees in both regions see a Learning or Development Opportunity as being at Least Important, with 50 percent of those in Asia-Pacific and 67 percent in Latin America seeing it as Most Important.

Worryingly, not many corporate headquarters respondents with responsibility for Asia- Pacific see it the same way; a mere 14 percent rate Learning or Development Opportunity as being a major factor influencing potential recruits. More encouraging was the finding that some 42 percent of headquarters executives with Latin America responsibilities recognized the importance of this component.

• Company Reputation
Although corporate leaders in both regions see the Reputation of the Company as being the most important factor for attracting and retaining talent, the talent itself does not agree. In Asia-Pacific, only 43 percent of interviewees feel this way, so that it is ranks only fourth in terms of overall importance. It is held in higher regard in Latin America, however, and features in the top three reasons to join a company, with 67 percent of respondents giving it a Most Important ranking.

• Profile of Management
The most striking difference between the two regions is the ranking of Profile of Direct Manager. In Asia-Pacific this factor ranks second in overall importance, with 69 percent of interviewees ranking it as Most Important, just a few percentage points less than the Profile of the Position.

This compares with just 23 percent in Latin America, where it ranks below other factors such as Regional Strategy of the Company or the Profile of the Company's Products. This finding perhaps indicates the value attached to personal relationships that are an aspect of business life in China in particular; Chinese workers are characteristically committed to the individual rather than the company. It could also be that that executives in Asia-Pacific are more attracted by the prospect of working with someone who is recognized as an industry leader and can instill the knowledge and skills that are required for in moving their career forward.

In any event, this is another element whose importance appears to be underestimated by corporate headquarters with regard to recruitment strategy; in the survey of corporate leaders, the Profile of Management is ranked last in terms of importance in Latin America and third last in Asia-Pacific.

Part three of the series will be featured in the Aug issue of PharmaAsia