Goodbye expats. Hello locals. Talent Localization as key for business success in APAC

Historically companies entering the markets in APAC have looked to relocate expat talent into the region to drive growth. Now, many organizations are making localization also part of their talent strategy to firstly, ensure a diverse talent mix needed to achieve sustained success and secondly, adjust to rapidly changing external conditions.

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Traditionally the term ‘localization’ in a business context has been used to describe the adaption of a product or message to a specific market. However, we’ve seen businesses increasingly go beyond just localizing their marketing to drive better local market penetration. Now, many organizations are making localization also part of their talent strategy to firstly, ensure a diverse talent mix needed to achieve sustained success and secondly, adjust to rapidly changing external conditions.

Changes in the region and COVID-19 accelerate localization needs

Historically companies entering the markets in APAC have looked to relocate expat talent into the region to drive growth. However, over the past years, changes in the political and economic landscape have pushed organizations to shift their talent model. For example, Asian governments have introduced a range of policies which prioritize the hiring of local employees. In addition to these external pressures applied by countries to protect local talent, companies have also undergone an internal mindset shift towards greater emphasis on diversifying their workforce and the acknowledgment that true local market penetration requires highly qualified local talent.

Now, the global pandemic seems to have further accelerated this trend. While there are no data available on this topic yet, discussions with clients who are having a significant presence in the region as well policy changes clearly show that localization will be one of the key challenges for organizations in the region.

The Singaporean government for example has already implemented further regulations to ensure the fair treatment of Singaporeans by employment agencies. To quote the Straights Times, this is to “strengthen job opportunities for Singaporeans amid the more difficult labor market conditions as a result of Covid-19”. In parallel, the Singapore government has confirmed a tightening of the criteria in 2020 for employment pass quotas, amid a rapidly shrinking of foreign employment to the tune of 60,000 in the year to date.

Singapore is not alone in adopting policies to protect its local workforce. Malaysia too has  announced a freeze on hiring foreign workers in the hope that these jobs will be filled by Malaysians going forward.

This acceleration of policies to prioritize local employees along with other talent-related dynamics in the region – for example, the fears of a talent drain from Hong Kong – will have most likely a knock-on effect, requiring organizations and their talent partner to change their overall talent strategy. In fact, recent conversations with many clients have shown that companies are aware of the forces driving accelerated talent localization and that they need to find ways to proactively respond to it.

So, how can companies gain a competitive advantage in what is sure to be a war for the best local talent?

What can organizations do to attract the right local talent?

1. Build a local talent pipeline

Gaining a deep understanding of the talent available in the market is the first step to localizing your workforce. You can either rely on data and intelligence you have developed in-house or partner with a reputable external agency to gather the necessary insights for you.

Since quality and recency are critical in translating talent data into building an effective talent pipeline, we recommend developing strategies that provide a regularly refreshed view of the available local talent.

In addition, good talent mapping should provide you with access to ‘hidden talent’- talent that may not be actively engaged or open to a job change right now but would still be great fit for your organization.

Last but not least, having a thorough understanding of the available talent will help you align your expectations with the realities of the market. When working with clients on local search projects we see more often than not that requirements do not match the actual talent landscape. This hunt for the “purple squirrel” leaves most companies in APAC frustrated and without the right talent. Gathering comprehensive market data has always helped our clients refine their expectations so that they can hire the right candidate in a much shorter time.

Success Story: Real-data as key to successful talent localization

The story of one of our clients, a tool manufacturing MNC with a large footprint in Asia, is a great example for the changes happening around talent strategy in the region. Traditionally, the client being a family-owned company has tried to fill roles from within and rely on expats to build and grow their local entities. However, due to the pandemic as well as related policy changes the client decided to shift their focus from expats to local hires in several countries in the region.

The client retained us to help them hire a local COO and GM Sales. Since we knew that the local market for such heavy-weight roles in Asia is rather limited, we put together a strong research team of 5, including voice and data researchers as well a lead consultant.

We first focused on local candidates who currently worked outside of the region and who would be willing to return – a fantastic mixture of global exposure and local familiarity. In the next step, to meet the client’s wish to see further available talent, we expanded the search including detailed maps of competitors as well as related niche markets in the region. The client was more than pleased with the broad range of talent we presented as well as the insights they gained about their competitors, target candidates and the market overall.

Having access to comprehensive real-time data about various potential target pools is key to making better hiring decisions with confidence, especially in times of great uncertainty.

2. Establish a localized brand story and Employer Value Proposition (EVP)

Employer Branding is all about asking why should a candidate work for my company? Having a compelling answer to this question is crucial to attracting the right candidates to your organization. And, similar to localizing your consumer brand to the needs and wants of your local market you need to also adjust your employer brand to the preferences of your target candidates.

We might be inclined to think that the post-COVID economic landscape will result in a saturated market of job-seekers and an abundance of talent following mass retrenchments. While this might be true for some parts of the world and some industry sectors, for multinationals looking for qualified bilingual staff the war for talent will most likely stay challenging, especially in Asia, the region having 5 of its countries in the top 10 of the most difficult markets in which to hire.

Talent Crunch Asia Hiring Issues War for Talent

Against this background, establishing a compelling local employer brand story as well as Employer Value Proposition (EVP) which clearly articulates the values, mission and opportunities your organization offers can make a huge difference when competing for talent, both with other multinationals as well as local employer brands. This local version can be an adapted version of your global EVP but should incorporate aspects of the local culture as well as a thorough understanding of local talent market dynamics.

Success Story: How data can help refine your local employer brand

To position your employer brand well in any local market, we again strongly recommend the use of comprehensive talent data. You might discover that your brand’s perception as well its advantages and disadvantages vary greatly between different countries.

To give you an example, an international tobacco company was struggling enormously to hire qualified candidates for their marketing organization in Japan. They could not understand why months of intense search had only resulted in 1 new hire when the same approach in other countries resulted in at least 10 times more.

When we dove into researching the market to solve this puzzle, we quickly noticed that the local marketing talent either did not fit their ideal profile – mainly because they didn’t speak English – or if the matched the requirements they weren’t willing to work for a tobacco company. And, even if they were interested, the fear of how they would be perceived by their friends and families held them back.

This was a shocking realization for the client who after having been given the feedback of almost 3,000 local markers could no longer deny that they needed to work on their local employer brand. In addition, to this valuable insight we were also able to identify a few outliers who were excited to join the brand because of its internationally renowned marketing unit – a brand advantage we encouraged the client to focus on going forward.

3. Know what ‘good’ looks like

It sounds obvious but having a solid understanding of what kind of employees have been successful within your company will give you strong clues as to the talent you need to hire into your organization. Mapping those traits, competencies and characteristics within the existing talent management framework can be an extremely instructive and insightful exercise. Once these competencies and personality profiles are identified, companies can then integrate relevant assessments to aid and support the identification and evaluation of potential external talent, enhancing the chances of getting critical talent decisions right.

What can organizations do to identify, develop and grow existing talent?

Besides hiring local talent for their local entities, we’ve also seen a trend towards organizations looking to groom local leaders for more regional and global roles. They recognize the benefits a diversified global leadership team can bring as well as the power of local or regional market intimacy to drive growth.

However, this has so far largely only been the case in larger multinationals with an established presence in the region. Given the growing urgency around talent localization, driven by the factors described above, we believe organizations with even a smaller APAC footprint – those who traditionally would have rotated their expat talent in and out of the region – will need to quickly start to explore effective ways to evaluate and develop their existing local talent.

So, what tools can organizations with less infrastructure and regional HR and Talent Management capability use to gain a competitive advantage?

1. Perform a talent audit

It goes without saying that organizations can’t develop future local and regional leaders without a strong process for identifying the potential within their existing teams. Talent audits are the tool of choice when assessing the level of alignment between company strategy and capability as well as potential skill gaps. Depending on the desired depth of information, talent audits can include a wide range of assessments including interviews, cognitive ability tests, 360-degree feedback, performance rating reviews and so on.

Of course, for organizations with less infrastructure and resources this can be quite a challenge. Partnering with a leadership development and assessment firm that can also bring an external benchmarking perspective – simply put, how does existing talent measure up vis-à-vis the external market – is one effective way to solve this challenge.

2. Targeted thematic coaching

Once you have identified the capabilities as well as the growth areas of your current and future leaders, it’s time to develop them. Coaching is for many organizations a great opportunity to get their talent to the next level utilizing external expertise and experience.

The good news is, that over the last 10 years coaching in APAC has experienced rapid growth including a significant increase in the number of coaches setting themselves up to support organizations and individuals. The bad news is that this has also resulted in a huge variation in the quality, consistency and ultimately, return on investment that coaching brings, especially on an organizational level.

Many clients do enjoy getting coached but the benefit for the organization is often left behind. For organizations looking to evaluate and develop local leaders make sure that the coach you choose operates at the confluence of individual development goals and organizational objectives. There are clear and common themes which emerge when preparing leaders to transition from one leadership level to another such as cultural awareness, the need to operate with a global mindset, stakeholder management, and executive presence. Coaching programs therefore should be very targeted in aligning with these objectives in order to address gaps and drive better outcomes for businesses looking to build their internal talent pipeline, and ultimately drive success in their talent localization strategies.

Quick Explainer: In short, what is Targeted Coaching?

Targeted Thematic Coaching occurs at the confluence of:

1. individual development goals (what the coachee wants) and,
2. organizational objectives (what the positive business impact will be).

Working through these two dimensions results in a strong contracting process, better business outcomes and ultimately in more impactful coaching.

Let data and expertise guide your talent localization efforts

Policy changes have made the shift from an expat-focused to a more local talent model inevitable for companies in APAC. While hiring local talent can seem frustrating and ineffective at times, bringing fresh talent with a different perspective as well as extensive knowledge of the market into your organization can be a great opportunity to accelerate innovation and growth – not just locally but also on a regional and even global level. To save time, resources as well headaches that often accompany localization efforts, try to rely on real time market data and local experts.

Do you have any questions about how to best localize your workforce? Whether you want to hire local talent, develop and grow existing local talent, or build a strategy, we have the right suite of capabilities to help! Get in touch with us today. We’ll be more than happy to consult with you.

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