What Makes Managing Talent a Challenge in ASEAN?

This is part two of a three-part series on Talent Management in ASEAN. View part one here.

ASEAN’s Market is Characterized by Scarcity  

ASEAN’s talent market exhibits the classic signs of an emerging market suffering from an increasing demand for talent and lack of supply.  Various studies have come to the same conclusion—the talent landscape across ASEAN can be characterized by overall scarcity; as reported by 70% of the respondents in a Deloitte survey. The region’s talent shortage is creating a vicious cycle that is likely to exist for the short-to-medium run. The lack of a steady talent supply and increasing demand are leading to competition for the same resources, which in turn results in challenges in attracting and retaining the right employees.

Development will be a Top Internal Priority for MNCs 

The distinctive characteristics of the ASEAN region have created unique management challenges that could only exist in very few parts of the world. It is growing at a pace that is much faster than that at which talent can be developed, its complexity (managing 10 countries) requires experienced professionals that don’t exist in the market, and its composition of as many cultures and languages as an entire continent erects further cultural complications. The focus for most MNCs (as shown in the table below) is going to be on developing the next generation of executives who can take up regional (not just national) leadership positions and will strategically execute plans set out by corporate teams.


ASEAN Talent Management Puzzle – Key Challenges MNCs Are Likely To Face

  • Regional Talent – ASEAN’s significant diversity causes regional leadership positions to be much more complex to handle. Moreover, given low mobility in the region, many executives only have strong market knowledge of their home country and have limited regional knowledge.
  • Attraction- Given the shortage of high-quality talent, expectations are growing from quality candidates for not only competitive compensation packages but also working conditions and benefits that not all MNCs are ready to provide.
  • Retention- Most organizations in ASEAN experience high levels of turnover predominantly at junior and operational levels. At these levels, salaries are comparatively lower, and extrinsic factors play an important role.
  • Regional Competition – ASEAN-based companies have been growing quickly; they did not go through any major job cuts during the last financial crisis, they are able to offer several mobility opportunities, and the size of the responsibility/portfolio is often comparable to what is offered by developed-country firms.

ASEANS_talent_management_puzzleWarning: Don’t Fall Into the ‘Buying’ Trap

Why make investments in talent and leadership if competitors can poach the best employees? Poaching rather than developing talent is ultimately a shortsighted strategy; it sends an unhealthy signal to employees that they need to change jobs in order to advance their careers. Companies that employ such a strategy will eventually lose their competitive edge, but local companies may want to follow it

In FSG’s latest work on the subject, titled Effectively Managing Talent in Southeast Asia, we highlight 10 issues that MNCs will likely face in ASEAN and 10 tactics that can used by MNCs to address those challenges.

FSG clients can access the full report here. Not a client? Contact us for more information.

2 thoughts on “What Makes Managing Talent a Challenge in ASEAN?

  1. Pingback: Thursday Links – Trouble with hiring an Asean | EM (H)EDGE - tapping local knowledge in emerging markets

  2. Pingback: ASEAN Fact #4: Workforce is almost completely Gen-Y

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