Dissatisfied staff, increasing job mobility, rising wage demands – no, it’s not Europe or the U.S. but Asia, where the booming economies of the region are fuelling an increasingly fierce war for talent.
Asian workers are becoming happier to dump their old employers and chase the best jobs and money, in the process creating a talent and retention crisis for both local and Western employers in the region.
A study by recruitment firm StepStone has found companies looking to tap into Asia’s rapidly expanding economies are reporting growing difficulties when it comes to recruiting and retaining skilled employees.
What’s more, the wage bill – once one of the biggest attractions for Western companies moving operations to the region – has been rising sharply.
The company’s Talent Report 2008 has concluded that the notion as a “low-cost utopia with an abundance of labour” is now long gone.
Senior managers in Asia reported facing four major recruitment and retention obstacles.
These were: rising wage and pay demands among potential candidates, a lack of suitable candidates and skills, a perceived lack of career opportunities among workers and employee increasingly believing they could snap up better pay and benefits elsewhere.
The expectations of workers in the region were also rising, with workers no longer prepared to settle for second best and feeling they deserved more than they were getting.
Employees were now much more likely to jump ship if a better offer came along.
Job hopping was set to become one of the biggest talent headaches for organisations over the next three years, StepStone predicted.
Despite these difficulties, more than four out of 10 business leaders surveyed globally believed the Asia-Pacific region offered their business the best opportunities for revenue growth over the next three years.
The region has been much less affected than Europe or the U.S. by the sub-prime led credit crunch and in areas such as financial services is looking particularly strong at the moment.
Nearly nine out of 10 global business leaders expected either slight or significant improvement in their company’s growth prospects over the next three years, with fewer than three out of 10 saying the rising cost of credit had caused them to be less optimistic.
“While recent surveys and financial analyst predictions indicate a drop in business confidence in the next year, it’s clear that most business executives are still bullish on Asia as the growth machine in the longer term,” said StepStone chief executive Colin Tenwick.
“While the credit crunch might be dismissed in boardrooms as a short-term speed bump, it would be folly for Western businesses rushing to invest in high-growth Asian economies such as China and India to ignore the clear signs of longer-term talent shortages in Asia,” he added.
“This research shows that many companies will have to prepare themselves for a huge battle for talent, one that is even tougher than in Europe and North America,” he continued.
“Asia is seen as the engine for growth but without the right people, businesses will see their engine splutter and may not get out of first gear. Without a clear, formal talent management strategy in place, companies will find it difficult to get – and more importantly, keep – the people they need and may struggle to realise the growth they are promising their shareholders,” added Tenwick.
Globally, too, business leaders were unanimous in agreeing that recruiting and retaining talented employees was getting tougher.
Nearly half felt it was becoming slightly more difficult and four out of 10 believed it was becoming significantly more difficult.
Yet, despite this, only a quarter of organisations surveyed had a formal, company-wide talent management strategy in place and 16 per cent did not have a talent management strategy at all.
“To compete for the best people it is clear from this report that many organisations need to address how they are going to manage their talent in a far more structured way or they place their ability to grow under serious threat,” said Tenwick.
“Given the low number of businesses with a formal talent management strategy in place, it’ s unsurprising that a third of respondents said their organisation was poor at forecasting talent requirements and retaining talent in the organisation,” he added.
While it was in Asia where recruitment and retention difficulties were most acute, business leaders in Western Europe and North America also agreed that employee career switching would be a major issue in fuelling talent shortages there.
However, business leaders in the U.S. and Europe were in general more concerned at the effects of an ageing population and lack of education and development opportunities.
“The difficulty in finding talent coupled with an ageing workforce presents a serious challenge particularly to businesses in developed economies in Western Europe and North America,” Tenwick pointed out.
“With almost half of executives in those regions viewing an increased use of older workers in a positive light, it appears likely that we will see more older workers returning to the workforce or perhaps postponing retirement to fill skills gaps,” he added.