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Create a Talent Advantage in Emerging Markets

Many companies find the strong economies and rising incomes of emerging markets attractive. But they soon learn that it can be difficult to find and retain the right people. As multinational companies pursue their localization strategies and local challengers continue their ambitious expansion, talent often becomes a critical issue.

Companies competing in emerging markets, whether they are multinational or locally based, will need to raise their investment in talent management. They must treat human capital with the same rigor as a capital asset investment to overcome some common challenges. It’s especially important to have top executives on the ground to oversee operations.

Outperformers Have More Leaders on the Ground
Nearly half of companies that outperform the market have more than one top 20 executive on the ground in emerging markets. Only 15% of underperforming companies can say the same, according to the 2013 Global Readiness Survey.

Understanding Talent Troubles

Even when companies have stronger global mobility, regardless of market, they still face several obstacles in the area of talent acquisition.

Supply

  • Gaps in the Organization. Quantity issues trouble the lower ranks, while quality problems plague the senior ranks.
  • Failure to Meet Standards. Only 15-30% of graduates in emerging markets meet multinational companies’ standards. Limited educational opportunities in some markets force companies to rely heavily on their own training.
  • Low Alignment Between Education and Skills. BRIC countries’ scores range from 4 to 6 (out of 10) in the alignment of education with the skills needed in the market.
  • Local Languages. The language barrier can be a major challenge when it comes to recruiting and training talent.

Productivity

  • Wage Inflation. Wage growth consistently is 3-4 percentage points higher than productivity improvements.
  • Low Employee Engagement. Engagement in China is half of global averages. By contrast, India’s discretionary effort exceeds the average.
  • Limited Time to Develop Leaders. Unlike companies in mature markets, those in emerging markets have no more than six to seven years to develop a generation of leaders, many of whom live in a culture where job hopping is the norm.

Culture

  • Acceptance. .
  • Strong Local Competition. Local brands have a distinct advantage when it comes to obtaining local talent.
  • Short-Term Orientation in Career Decisions. Workers don’t value long-term investments with an employer, or they don’t trust their employer to support their career development.

Taking the Talent Litmus Test

To compete and succeed in emerging markets, businesses have to out-recruit the competition for the required workforce resources. Leaders in emerging markets are very good at:

Creating a Global Family

Attracting and Retaining Top Local Talent

Offering Better Local Leadership

Accelerating Talent Development

Sanofi’s vice president of human resources in North America spoke with BCG about the company’s talent strategy in emerging markets.

LEARN MORE ABOUT ADDRESSING TALENT NEEDS IN EMERGING MARKETS

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