Organizations wishing to expand operations in emerging markets need to avoid a monolithic approach to talent management and instead tailor recruitment and retention strategies to the local workforce, according to a report from global professional services firm EY.
Talent retention strategies include accommodating career goals, differentiating employer brand, and crafting work environments and total rewards to match country preferences.
“Each market presents different challenges, and it is crucial to understand people’s cultural and professional differences,” said EY Global Talent Management Market Leader Bill Leisy. “Only then will organizations be in a position to develop an effective employer brand that will attract in-demand talent, and a strategy that engages and retains those employees.”
In the major developing markets Brazil, Russia, India and China (BRIC), talent retention is a leading risk to the operational agility, competitiveness and strategic growth of organizations, according to EY. As companies rush to these countries or seek to build on existing operations, the competition for talent is only going to increase.
“Potential employees are attracted to one organization over another for different reasons,” said Leisy. “These include employers’ reputations in the market, pay and benefits, and flexibility of working arrangements.” But they stay in an organization for one key reason, he pointed out: the employer’s ability to develop and enhance their careers.
EY surveyed 1,100 professionals in high-demand roles working in industries with a notable talent shortage, including IT, energy and financials. Country-specific examples of key talent scarcity are:
- In China a premium is placed on management skills gained locally, rather than abroad, because of the complex nature of working with the government and the rapid increase in competition from state-owned enterprises.
- In Brazil engineering roles are at a premium as the dominant mining and oil industries absorb a majority of engineering professionals.
- In India the hugely successful indigenous IT sector has made working for a foreign company’s IT function seem far less attractive; thus, competitors with great recruitment brands at home struggle to fill vacancies in India.
Accommodate Career Goals
Career goals are important to high-potential employees. They steer employees’ decisions, such as where to work and when to leave an organization.
EY found that career goals differ by profession. For example, engineers, for whom it’s essential to stay current in their field, often become technical or functional experts; business professionals strive to show a strong independent streak. “Use differentiated job design, career paths and performance-management processes to meet these differing career goals across professions,” EY advised. Build “Western European-style” autonomous work management and performance management into the roles of business professionals. For engineers, build up communities of interest around their field of expertise or create professional leadership roles aimed at developing technical skills and standards across business units, to emphasize technical career development.
Across the four BRIC countries, many career goals were shared, such as the desire for work/life balance and the opportunity to build a career in one’s home country. Some career goals, though, were valued differently by those in each country.
EY suggests that companies tailor career-management systems and processes to recognize national differences:
- In Brazil focus on high-potential programs to establish new ventures or launch new projects.
- In Russia emphasize clear progression in role and status, and reward in-demand professionals and develop their careers.
- In India create leadership roles that are fairly structured within clear hierarchies, and set well-defined boundaries for delegated decision-making.
- In China train Western managers to understand and accommodate high-potential employees’ priorities—priorities that may be very different from the ones they are accustomed to.
The low rating that respondents gave to international assignments is indicative of the exciting developments in their own countries. In the past, sought-after professionals in BRIC countries often thought that their best opportunities were abroad, but that has changed. “Multinational subsidiaries must now compete aggressively for BRIC talent, against global firms that offer exciting careers closer to home,” the report states.
According to EY, to improve their brand, companies should vary their recruitment messages to attract the best talent in different countries. Suggestions include:
- In Brazil and India, emphasize corporate social responsibility.
- In Brazil, Russia and India, focus on financial strength.
- In China, highlight the organization’s prestige.
Tailor Work Environment, Total Rewards
EY found that an organization’s internal work environment drives engagement more than the location in a particular city or region. “Across all types of key talent in emerging markets, respondents placed greater value on a high-energy, sociable, friendly and comfortable environment than they did on location,” the report notes. “Organizations typically over-deliver on the location element, yet that was the least valuable in terms of improving engagement and retention.”
The report advises focusing the design of office space, location and work practices to reflect the following:
- Brazil: Respondents want a low-stress, comfortable and high-energy work environment. Brazil has a traditional, hierarchical culture, so to reduce stress, it is important to maintain an atmosphere that enables workers to perform well. The more modern and attractive Brazilian work environments are well designed, provide ergonomic comfort, use leading technology, have better lighting and contain physical spaces that promote collaboration.
- Russia: Respondents want a high-energy, social and comfortable work environment. For Russian talent, comfort and energy are often associated with a company’s financial stability and growth potential.
- India: Respondents prefer a high-energy, social and creative work environment. They are looking for an environment that emphasizes collaboration, as well as opportunities to create and innovate. Visible signs of a firm’s success are particularly important for increasing workers’ energy and enthusiasm.
- China: Respondents seek a social, low-stress and high-energy work environment. To be perceived as a good employer of Chinese talent, companies should emphasize the exciting and attainable growth opportunities that are available. It is important to demonstrate that employees do not have to relocate to get promoted. Employers should also create physical space that is conducive to collaboration and interaction.
EY found clear differences among the BRIC countries when it comes to compensation and benefits practices. Tailor total rewards packages by country to achieve the greatest return:
- High future-earning potential is especially attractive in Brazil and India.
- A secure, steady income is particularly important in Russia.
- Stock options and other forms of equity-based pay rank higher in China than in other countries, suggesting a long-term orientation.
Roy Maurer is an online editor/manager for SHRM.
Follow him at @SHRMRoy
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