Talent-related Challenges are on the Rise in ASEAN
Numerous reports consistently highlight skill deficits as a major ASEAN concern. The Economist Intelligence Unit (EIU) also noted that the lack of labor and talent was causing significant issues for employers in Indonesia, the Philippines, Thailand, and Vietnam. In a recent survey, the International Labor Organization (ILO) on ASEAN revealed that skill shortages were inhibiting growth in several key sectors, such as trade, hotels, telecommunications, and IT. A vast majority of the companies recently surveyed in ASEAN revealed that they are facing severe issues with talent attraction and retention. According to the Hay Group, between 75% and 96% of firms in ASEAN are having trouble attracting the right type of talent. Given the lack of investment in high-quality tertiary education and training programs, issues associated with talent are here to stay.
Proactive Management is the Need of the Hour
The majority of multinationals in ASEAN, 61% according to one survey, expect the size of their workforce to grow alongside their thriving businesses. Although business planning often incorporates multiple variables that can affect growth, workforce planning in the region isn’t proactive and doesn’t account for talent supply-demand gaps. MNCs can’t afford to put addressing this need on hold for the following reasons: (a) As development of regional talent could take up to 10 years, starting early is important; (b) Many fast-growing and ambitious regional companies have more pulling power, making them just as attractive, if not more, as a choice of employer; (c) Because education standards in the region remain relatively low, investing early in the training process and sponsoring tertiary education is recommended.
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. Clients can access full reports here.
This article is part 1 of three-part blog series on Talent Management in the ASEAN region. Check back next week for part 2.