Talent Trends in APAC: Addressing the unique challenges of talent acquisition

There can be no doubt that the Asia Pacific region is becoming of increasing interest for global businesses. There are a number of key drivers for the global spotlight shining on APAC right now: the influential position of the Chinese economy on the global stage; the  evolution of  delivery hubs in key locations such as Philippines and major Indian cities; and the above-average GDP increases in a number of Asian countries. Global talent acquisition and management solutions provider AMS is experiencing significant growth in the region (30%-plus annually) as an output of this increasing demand.

With these external influences, we see some changes in the regional approach of the HR and TA function. Historically, the likes of the Chinese market have matured separately from others across the globe, with businesses previously viewing operations here as separate from other countries. But now we are seeing true internationalization as APAC becomes more of a strategic opportunity than an afterthought for global company growth.Big names like Dyson have recently moved core functions to the region and other brands look set to follow suit, with India in particular becoming a center of excellence and a global delivery hub. As we see this increase in global alignment play out, critical to success will be the concept of “glocalization,” where organizations such as AMS have a pivotal role to play in bringing global best practice and expertise and integrating that with local legislation, cultural nuance and a delivery team of in-market talent.

However, it’s one of the most complex locations to attract and retain staff. In the first instance, the fact that APAC is, in my view, a region in name only, makes consistently engaging with talent pools a huge challenge. The differences in culture, language and legislation across the countries make talent attraction and engagement incredibly multifaceted. What works in one area of the region rarely works for others. And employers are finding that while they may have people strategies that generally work as a whole in EMEA or the US, the level of tailoring required in APAC is more extensive.

PREMIUM CONTENT: Asia Pacific 2020 Legal and Regulatory Developments Calendar

Varied futures. While the countries that make up the region have different challenges, one constant is the alarming talent crunch. There are numerous reports that indicate an increasing shortage of skills. According to the 2018 Future of Work: The Global Talent Crunch report, by 2030 APAC will face a labor skills shortage of 47 million, which has a potential unrealized output of $4.238 trillion for the region’s economy — one of the most pronounced expected impacts across the globe. Hong Kong and Japan look set to face the most significant skills shortages in the region, with China expecting to note the greatest dearth of talent in the financial services sector. The picture is similar in Australia. According to a report by Bullhorn, a shortage of relevant skills jumped from one of the top five, to one of the top three challenges businesses faced in the region between 2018 and 2019.

Against the grain. India, however, is bucking the trend, with the Future of Work report suggesting it will have a surplus of projected skilled labor by 2030 as it continues on its trajectory to overtake China and become one of the most populous destinations in the world. While India has a rich pool of talent, the sheer magnitude of candidates brings its own challenges around assessing competencies and skills and matching those to demand.

Going local. In addition to the expected skills deficit facing most of the region, employers tapping into this market will recognize the rapidly changing make-up of the local workforce. Historically, APAC was an ex-pat heavy economy for global multinational corporations, but we’re now noting an uptick in localization. Asian governments are increasingly developing policies which support a ‘nationals first’approach to hiring. Companies directed by these policies are increasingly seeing the value in local talent which has led to a natural evolution and change in overall employment tone across the region.

Changing attitudes. And while permanent hiring is still the preferred model of employment, there is a movement toward new working styles, with contingent and freelance workers becoming increasingly utilized methods of engaging talent. In Japan, for example, there’s been a boom in people working a second job as more residents look to make ends meet by adding an additional salary. The result has been a shift in attitudes from business leaders and the government, which saw rules changed a few years ago that originally discouraged people from taking second jobs and employers actively seeking part-time employees amid the growing talent shortage.

In this environment, flexibility is key and outsourcing is a core part of the world of work and employment. The days of fixed contracts are arguably over and agile talent acquisition is becoming the new norm for businesses that are recruiting across numerous APAC destinations. And while there remains a desire to keep talent acquisition functions in-house ‘partner solutions’ — where companies can unbundle and select what support they need, or switch services on and off at country level — are becoming more popular.

But how can talent strategies be adapted to ensure they are suitable for the ever-evolving APAC market? Watch out for my next installment where I’ll outline what the new total workforce strategy looks like.

Neil Jones

Neil Jones
Neil Jones heads the APAC leadership team in Alexander Mann Solutions, driving APAC’s growth strategy and business plan objectives. He also supports leads global sales. He can be reached at Neil.Jones (at) alexmann (dot) com.

Neil Jones

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