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I recently saw an info-graphic produced by CEB pointing out the key HR risks in Asia and how realising growth is more difficult than many organisations think. It is suggested that through 2030 emerging markets (key Asia economies) will account for nearly 80% of the global GDP growth. This is by anyone’s reasoning an enormous contribution.
By their reckoning, the three key HR risks are:
- Rising Costs & Competitive Pressures
- Talent Scarcity
- Leadership Productivity & Retention Risks
No surprises here! Having lived and worked in Singapore for the past six years, I have witnessed the evolution the HR industry has made in maturing from what was a fairly simple insular function to what is now a more focussed and sophisticated regional contribution.
Singapore in particular is focussed on growth and the government have launched a number of different programs and initiatives to encourage companies to continue to invest here. Interestingly, corporate growth has been at a rate of 54% for the past two years, that is, companies opening an operation/office here. The Singapore government have extended and enhanced the “Productivity and Innovation Credit” (PIC) Scheme through offering enhanced tax deductions to business’ therefore encouraging investment in Singapore. No small amount either, $3.6B over three years to 2018.
On the talent front, a key initiative to supporting the Home for Talent strategy is the Leadership Initiatives, Networks and Knowledge (LINK) talent and leadership ecosystem. Through LINK, Singapore aims to bring together the supply and demand for talent development needs. Supply being leading business schools, such as INSEAD and professional services firms, such as Ampersand Executive, Search & Advisory whilst demand players include corporate universities and talent control towers (strategic human capital functions) of sophisticated companies who are at the forefront of HR practice looking to better manage and develop their talent so as to drive business growth in Asia. A good example of one of these programs is Unilever’s “Four Acres Singapore”.
There is no doubt that there is significant pressure on organisations in terms of rising costs and competitive pressures. Purely based on the continued increase in corporate growth let alone the expected 15% increase in executive growth means that costs are on the rise and there will be less talented executives available locally in the market.
Despite abundant labour in Asia, we have an insufficient supply of skilled talent which makes it difficult to achieve the growth expectations. Whilst Singapore has a greater percentage of skilled professionals when compared to other Asian countries, we also have an unemployment rate of less than 2% so it is near on impossible to sustain the growth expectations without sourcing talent from further afield.
In comparison to other markets, employees in Asia do tend to switch companies more frequently, have a greater expectation of what their skills are worth financially and a lack of ability to build satisfactory succession plans.
As Asia takes on this massive responsibility to significantly contribute towards global GDP growth, organisations will continue to be challenged to find quality skilled local and foreign talent. That is a challenge I’m pretty excited about!
Josephine Garniss, Managing Director : Asia