Hiring and keeping the best talents is important, as employees seek stable companies that meet their requirements for professional growth. With the latest projections showing a slowdown of the economy in the region, impacted in large part by the ongoing trade war between the US and China, organisations need to exercise due care in their expansion plans.
Hiring and keeping the best talents is important, more so with the high turnover rate as employees seek stable companies that meet their requirements for professional growth.
Not enough is being done to engage and retain existing talent, and the reasons for that are outlined in a PwC Saratoga study which also states that one in five new hires leaves within the first year. It is no wonder that the war talent has been intense for some time. At the same time, digital technology has shifted the way organisations run their businesses and manage their workforce. Work is dispersed across a global virtual workspace, giving way for alternative work arrangements.
Employees are expecting their employers to provide them rewards and work environments aligned with their changing needs and preferences. Employers are hiring people with special expertise to deal with new technology applications such as mobile app designs and cloud computing which did not exist a decade ago.
As digitisation disrupts the workforce and changes employment relationships, engaging and retaining critical talent become more critical. Organisations need to do more in terms of developing and executing a strong, differentiated Employee Value Proposition (EVP) if they are to engage and retain their best talent.
To help break out of the talent spiral, here are key priorities by which Asian business leaders need to develop and strengthen:
1. Build up internal talent
Place additional emphasis and visibility on internal talent, and shift sourcing and retention strategies to focus more on redeployment and internal talent management. This requires designing a structured career progression path for employees that encompasses on-the-job training, mentoring, project management, job rotation or foreign assignment opportunities. Building talent from within the company can provide a major competitive advantage as the employees are positioned to add the most value and contribute to the success of a company. In turn, this increases employee engagement as the opportunities for progression provide the employee a sense of purpose which then creates a positive cycle of higher motivation and productivity, improved retention levels and reduction in the urgency around external hiring. A structured career development programme is also one of the biggest draws for millennials as they feel that this is what makes an employer an attractive prospect to work for.
2. Non-financial incentives
Asian employers tend to place greater emphasis on variable pay but competitive salaries and financial incentives alone do not drive a high-performance culture in the organisation. Employees are increasingly placing more importance on non-financial incentives such as flexible working hours or remote working, but employers have been rather slow to respond, thus creating a gap between what employees want and what employers are offering. Asian employers should be aware that current incentive models do not seem to focus on what motivates their key talent. Therefore, consider to integrate flexibility benefits and lifestyle options in your reward model by conducting a company-wide assessment on employees’ work-life needs and their work approach, and how it impacts productivity and performance. Then, design a relevant and sustainable Employee Value Proposition (EVP) that meets the changing needs of business and employees. Correspondingly, the improved EVP becomes an important engagement driver and retention tool.
3. HR as a strategic business partner
Given the importance of talent and the costs involved in hiring, engaging and retaining them, CEOs are looking to HR for strategic advice on the scale and effectiveness of their investments in talent. As such, HR needs to take on a proactive role in partnering with top executives in providing consultation on decisions around talent strategies. However, HR is often not perceived as a business but as an operational function instead. With high employee turnover and the pressures of competitive talent market, HR functions are stuck in transactional activities, focused on resourcing which impedes their ability to drive strategic talent management initiatives.
Furthermore, most Asian companies do not have HR specialists responsible for talent strategy and management. Four out of five companies in the PwC Saratoga study did not have a dedicated sub-function in HR for talent management. As such, HR lacks a certain degree of credibility with the business. To spearhead talent management initiatives, HR professionals need to have a broad understanding and knowledge of the company’s business, industry and strategy, be actively involved in business decisions and look to financial measures to gauge results.
To reduce their time spent on reactive transactional activities, HR should leverage on new technology applications and self-serving digital tools that can automate talent acquisition profiling and back-office processes, and improve internal workflows, so that they would be able to drive strategic initiatives and to focus on improving employee relations and engagement within the organisation.
4. Cultural awareness
As the department tasked to finding the best talents both locally and globally, HR’s knowledge of the local culture is crucial in hiring candidates who fit the country and company’s culture. MNCs setting up branches in Asia, HR needs to understand the cultural differences in in each country. What works in Singapore, do not necessarily translate well in India. There are 48 countries in the region, with each region having its own cultural identity. A one-size-fits all policy driven by the head office can hamper employee retention and job satisfaction. HR should be flexible enough to take into account these differences, while remaining true to the company’s vision and mission.
Article by Nick Jonsson is the Managing Director of EGN Singapore
Source: HRM Asia