What motivates a Uruguayan software engineer to work for an Indian company in Brazil? If you don't know, you risk losing the race for talent in emerging markets. These new markets are growing so fast, even established global players aren't recruiting and retaining enough employees.
How to win this contest? Ready, Hill, and Conger suggest two strategies:
* Attract talent by making compelling promises. Center these promises on your company's brand (does it have a reputation for excellence that may lead to personal advancement?), opportunity (will you provide challenging work, training, and competitive pay?), and purpose (does your company have a mission and values meaningful to potential new hires?).
* Retain talent by keeping your promises. Craft a culture characterized by authenticity, a merit-centered reward system, and accelerated professional development for even the lowest-level employees.
By applying these strategies, Standard Chartered Bank reduced attrition rates in its China operations by 3% over 2007-2008- while rivals suffered a dramatic increase in attrition.
The Idea in Practice
ATTRACT TALENT BY MAKING COMPELLING PROMISES
Make promises about your company's brand, opportunity, and purpose that appeal to employees in developing nations.
Example:
TCS Iberoamerica (a unit of Tata Consultancy Services) provides software and technology services to clients in Latin America, Spain, and Portugal, while also contributing to other TCS endeavors worldwide.
The Tata brand stands for technical excellence.
So, when expanding into Brazil and Uruguay, TCS Iberoamerica hired local engineers (not salespeople) and sent them to India to observe its core strengths and standards. They returned home energized and eager to recruit their compatriots. The company also promised opportunity.
For instance, it hired local Brazilian and Uruguayan leaders who were admired in the community to head up operations- not Indian expatriates.
Finally, Tata offered an exciting purpose- including making a $2,000 car that would open up the industry to low-income consumers.
RETAIN TALENT BY KEEPING YOUR PROMISES
It's tempting to overpromise just to get new hires in the door. But failure to deliver on those promises will sour current employees on the company and ultimately hurt its appeal for potential new hires. Keeping your promises is especially crucial in emerging markets where employees can easily move to global or local companies that seem to offer greater overall rewards.
Your company's culture plays a central role in keeping promises and retaining talent.
Example:
At Standard Chartered Bank's China operation, many new employees are "raw talent"-they have great potential, but lack experience. To back up its promises, the bank pays careful attention to its culture:
* Induction. SCB offers an intensive induction program that teaches raw-talent hires about the ethical management of financial services, including money-laundering prevention.
* Technical training. Relationship managers in SCB's wholesale business must complete a five-day "boot camp" and pass a strict exam before they're exposed to customers.
* Professional and management development. Raw recruits get intensive training in the English language, communication and listening skills, and business etiquette. They also receive career guidance and access to networking sessions.
* Stretch assignments and deployment. SCB's recruiting slogan "Go places" tells people that if they do well, they'll move ahead in their careers. And talented Chinese employees are often moved elsewhere, including to the group head office in London.
With economic activity in emerging markets growing at compounded rates of around 40%-as compared with 2% to 5% in the West and Japan-it's little wonder that many companies are pegging their prospects for growth to Brazil, Russia, India, and China (BRIC) and, increasingly, other developing nations. Businesses based all over the globe are feverishly competing for people who, often for the first time in their lives, have numerous options and high expectations. Not even companies with established global experience can coast on past success in meeting their staffing needs.
One might assume, for instance, that Standard Chartered Bank, whose heritage dates back to the 1850s in India, Hong Kong, and Singapore, could easily maintain a lead in the race for Asian talent. But just a couple of years ago SCB's China division was unable to find seasoned managers to lead the bank's retail and commercial banking operations. In the words of Hemant Mishr, the head of corporate global sales, "These people and the generations that preceded them have known nothing but poverty and the lack of opportunity. Yet we expect them to be patient, loyal soldiers, and to advance at an orderly pace. It is time to get real. It is their time now."
All three of us have spent decades studying talent management and leadership development, but this war for talent is like nothing we've ever seen before. We recently completed an eight-month research project that involved interviewing dozens of executives and collecting data from more than 20 global companies. Our goal was to identify the factors that differentiate the successful from the less so in emerging markets, and our first analysis revealed four: brand, opportunity, purpose, and culture. These may sound somewhat generic-and logical in any talent market-but they play out in developing nations in particular ways.
Employees in the developing world aren't used to thinking about the future in expansive terms. Now they can look beyond simply making a living. They are particularly attuned to brand, for instance, because a desirable affiliation may lead to personal advancement- especially when the brand is associated with inspirational leadership, the kind that challenges employees to develop themselves as leaders and to help build a great company that plays on a global stage.
Not surprisingly, opportunity means much the same in the developed and developing worlds: challenging work, stretch assignments, continual training and development, and competitive pay. In emerging markets, however, opportunity must imply an accelerated career track to senior positions. Highpotential employees don't focus exclusively on climbing the ladder, however; they are willing to make lateral moves as long as their skills and experience accrue at a pace that matches the growth in their markets.
As for purpose, emerging-market job candidates prize a company with a game-changing business model, where they can be part of redefining their nation and the world economy. They are also attracted by a mission that focuses on helping the unfortunate-many have experienced poverty firsthand-and expresses the value of global citizenship.
A company's culture matters in several distinct ways in emerging markets. First, its "story," or brand promise, has to feel authentic. Second, employees must be rewarded for reasons of merit; a high potential from Brazil or Dubai must believe that the executive suite in China or the United Kingdom is within reach. Third, although employees want to be recognized for individual achievements, they also want to feel a connection with their teams. Finally, the culture has to be truly "talent-centric," so that people know they're critical to the company's success.
A closer look at our interviews gave us new insights into how these four factors work in concert. We found that they could be united under two guiding principles: promises made (the combination of brand, opportunity, and purpose) and promises kept (most significantly, employees' day-to-day experiences within an organization's culture). All four factors play a role in all aspects of the talent management process, but each influences recruitment and retention in different ways. (See the exhibit "A Framework for Attracting and Retaining Talent.") Promises made and kept affect any quest for talent, but the intensity of competition in the fast-growing BRIC and other economies makes strong differentiation urgent. Most companies continue to believe that a big salary and a name brand will suffice to meet their needs, but a local company that creates genuine opportunities and exhibits desirable cultural conditions will often win out over a Western multinational that offers higher pay.
We're not proposing a simple solution to a complex problem. Company needs vary by market (see the exhibit "The Talent Market in BRIC"). Prospective employees don't necessarily value the same things: Among certain demographic groups opportunity may matter more than purpose, for instance, and individual preferences vary widely as well. But regardless of any company's strategy for a given market, the same overarching principles apply.
How to win this contest? Ready, Hill, and Conger suggest two strategies:
* Attract talent by making compelling promises. Center these promises on your company's brand (does it have a reputation for excellence that may lead to personal advancement?), opportunity (will you provide challenging work, training, and competitive pay?), and purpose (does your company have a mission and values meaningful to potential new hires?).
* Retain talent by keeping your promises. Craft a culture characterized by authenticity, a merit-centered reward system, and accelerated professional development for even the lowest-level employees.
By applying these strategies, Standard Chartered Bank reduced attrition rates in its China operations by 3% over 2007-2008- while rivals suffered a dramatic increase in attrition.
The Idea in Practice
ATTRACT TALENT BY MAKING COMPELLING PROMISES
Make promises about your company's brand, opportunity, and purpose that appeal to employees in developing nations.
Example:
TCS Iberoamerica (a unit of Tata Consultancy Services) provides software and technology services to clients in Latin America, Spain, and Portugal, while also contributing to other TCS endeavors worldwide.
The Tata brand stands for technical excellence.
So, when expanding into Brazil and Uruguay, TCS Iberoamerica hired local engineers (not salespeople) and sent them to India to observe its core strengths and standards. They returned home energized and eager to recruit their compatriots. The company also promised opportunity.
For instance, it hired local Brazilian and Uruguayan leaders who were admired in the community to head up operations- not Indian expatriates.
Finally, Tata offered an exciting purpose- including making a $2,000 car that would open up the industry to low-income consumers.
RETAIN TALENT BY KEEPING YOUR PROMISES
It's tempting to overpromise just to get new hires in the door. But failure to deliver on those promises will sour current employees on the company and ultimately hurt its appeal for potential new hires. Keeping your promises is especially crucial in emerging markets where employees can easily move to global or local companies that seem to offer greater overall rewards.
Your company's culture plays a central role in keeping promises and retaining talent.
Example:
At Standard Chartered Bank's China operation, many new employees are "raw talent"-they have great potential, but lack experience. To back up its promises, the bank pays careful attention to its culture:
* Induction. SCB offers an intensive induction program that teaches raw-talent hires about the ethical management of financial services, including money-laundering prevention.
* Technical training. Relationship managers in SCB's wholesale business must complete a five-day "boot camp" and pass a strict exam before they're exposed to customers.
* Professional and management development. Raw recruits get intensive training in the English language, communication and listening skills, and business etiquette. They also receive career guidance and access to networking sessions.
* Stretch assignments and deployment. SCB's recruiting slogan "Go places" tells people that if they do well, they'll move ahead in their careers. And talented Chinese employees are often moved elsewhere, including to the group head office in London.
With economic activity in emerging markets growing at compounded rates of around 40%-as compared with 2% to 5% in the West and Japan-it's little wonder that many companies are pegging their prospects for growth to Brazil, Russia, India, and China (BRIC) and, increasingly, other developing nations. Businesses based all over the globe are feverishly competing for people who, often for the first time in their lives, have numerous options and high expectations. Not even companies with established global experience can coast on past success in meeting their staffing needs.
One might assume, for instance, that Standard Chartered Bank, whose heritage dates back to the 1850s in India, Hong Kong, and Singapore, could easily maintain a lead in the race for Asian talent. But just a couple of years ago SCB's China division was unable to find seasoned managers to lead the bank's retail and commercial banking operations. In the words of Hemant Mishr, the head of corporate global sales, "These people and the generations that preceded them have known nothing but poverty and the lack of opportunity. Yet we expect them to be patient, loyal soldiers, and to advance at an orderly pace. It is time to get real. It is their time now."
All three of us have spent decades studying talent management and leadership development, but this war for talent is like nothing we've ever seen before. We recently completed an eight-month research project that involved interviewing dozens of executives and collecting data from more than 20 global companies. Our goal was to identify the factors that differentiate the successful from the less so in emerging markets, and our first analysis revealed four: brand, opportunity, purpose, and culture. These may sound somewhat generic-and logical in any talent market-but they play out in developing nations in particular ways.
Employees in the developing world aren't used to thinking about the future in expansive terms. Now they can look beyond simply making a living. They are particularly attuned to brand, for instance, because a desirable affiliation may lead to personal advancement- especially when the brand is associated with inspirational leadership, the kind that challenges employees to develop themselves as leaders and to help build a great company that plays on a global stage.
Not surprisingly, opportunity means much the same in the developed and developing worlds: challenging work, stretch assignments, continual training and development, and competitive pay. In emerging markets, however, opportunity must imply an accelerated career track to senior positions. Highpotential employees don't focus exclusively on climbing the ladder, however; they are willing to make lateral moves as long as their skills and experience accrue at a pace that matches the growth in their markets.
As for purpose, emerging-market job candidates prize a company with a game-changing business model, where they can be part of redefining their nation and the world economy. They are also attracted by a mission that focuses on helping the unfortunate-many have experienced poverty firsthand-and expresses the value of global citizenship.
A company's culture matters in several distinct ways in emerging markets. First, its "story," or brand promise, has to feel authentic. Second, employees must be rewarded for reasons of merit; a high potential from Brazil or Dubai must believe that the executive suite in China or the United Kingdom is within reach. Third, although employees want to be recognized for individual achievements, they also want to feel a connection with their teams. Finally, the culture has to be truly "talent-centric," so that people know they're critical to the company's success.
A closer look at our interviews gave us new insights into how these four factors work in concert. We found that they could be united under two guiding principles: promises made (the combination of brand, opportunity, and purpose) and promises kept (most significantly, employees' day-to-day experiences within an organization's culture). All four factors play a role in all aspects of the talent management process, but each influences recruitment and retention in different ways. (See the exhibit "A Framework for Attracting and Retaining Talent.") Promises made and kept affect any quest for talent, but the intensity of competition in the fast-growing BRIC and other economies makes strong differentiation urgent. Most companies continue to believe that a big salary and a name brand will suffice to meet their needs, but a local company that creates genuine opportunities and exhibits desirable cultural conditions will often win out over a Western multinational that offers higher pay.
We're not proposing a simple solution to a complex problem. Company needs vary by market (see the exhibit "The Talent Market in BRIC"). Prospective employees don't necessarily value the same things: Among certain demographic groups opportunity may matter more than purpose, for instance, and individual preferences vary widely as well. But regardless of any company's strategy for a given market, the same overarching principles apply.
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