Asia represents one-third of the global economy and is home to half the world’s total population, with roughly 3bn people within the economically active age band (15 to 64 years). While a workforce of such size represents a tremendous opportunity for multinational corporations (MNCs), it also comes with its share of challenges. Mark Braithwaite, Asia Pacific managing director of Odgers Berndtson, a global executive search firm, gives three tips for hiring talent in Asia.

1.  Understand the talent constraints

I recently spoke to business leaders about their operations in Asia, and they identified finding, attracting and retaining leadership talent as the biggest issue challenging their expansion to the continent.

In some cases the management skills and experience that MNCs require are not readily found in Asia, especially in the more senior positions. In others, local managers may not want to work for a foreign MNC compared with a local equivalent. There is sometimes a perception that local companies can provide more secure employment, or offer better benefits. Local executives typically demand a 30-50% salary hike to move jobs within China, something that is not always palatable to MNCs. Staff turnaround is also high at management level (although this is not specific to Asia), because of greater competition for talent.

While there are challenges in sourcing talent at various levels, the frequent dearth of suitable talent at management level, coupled with a high attrition rate, make it more difficult to attract and retain effective leadership, resulting in difficulties maintaining consistent business values and culture.

2. Get to know the local culture

MNCs often respond to these challenges by bringing in people from their home markets to do the job, rather than employing from the local market – which may require more training to understand the local culture. Among Asian markets there is a wide variety of infrastructure, transparency levels, law, culture and language, and first-hand experience of the region is needed to appreciate these differences. As one executive I met put it, "You need humility to win in Asia."

For instance, customers in Asia generally demand a more personal relationship with the supplier or salesperson when making a transaction. At the same time, the way that managers and staff interact in some Asian countries can be different to that in the US or UK, for example. In China, businesses have strict hierarchies and respond well to more directive leadership, whereas in the US and UK, businesses with a flatter hierarchy are more common.

3. Get to grips with market regulation

As important as understanding the local culture is the need for staff to comply with local regulations. As exemplified by recent high-profile cases, MNCs need to run a clean business across the globe, as they are likely to come under increased scrutiny in markets such as China. Key to this is ensuring that the local market leadership team fully understands and is trained in any compliance issues, so that they in turn can closely manage the workforce and mitigate this risk on the ground.

Talent shortages, local market regulation and understanding a number of different cultures are three key areas that businesses need to get to grips with if they want to grow successfully in Asia. Those that fail to adapt could face a bumpy ride.

This blog is part of a series managed by The Economist Intelligence Unit for HSBC Commercial Banking. Visit HSBC Global Connections for more insight on international business. 

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