Human Resource Management

29

TALENT MANAGEMENT CHALLENGES IN

EMERGING MARKETS Steve Bluen

3 Introduction

The projected growth of the BRICS (Brazil, Russia, India, China, and, latterly, South Africa) countries is impressive: Hewlett and Rashid (2011) predict that China will become the world’s largest economy by the 2020s, and that India, currently 11th, could leapfrog Japan into 3rd place this year (2012). By 2050, whereas 97% of the 438 million people joining the global workforce will come from developing countries, the workforce in developed countries will have shrunk by 11 million, with emerging economies having grown by 1.7 billion.1 Multinational companies (MNCs) have been expanding their presence, particularly into emerging markets.

These developments yield important talent implications. For example, in a 3-year period, IBM hired more than 90 000 people in Brazil, China and India.2 Attracting, retaining, developing and deploying that amount of skilled and managerial talent over such a short period of time create exactly the kinds of challenges facing MNCs operating in emerging markets. Not least of these is the need to develop dynamic, world-class talent management approaches if they are to remain competitive. “While companies are facing significant talent management challenges in several regions of the world … the challenges are most acute … in the emerging markets such as the BRIC economies of Brazil, Russia, India, China and the economies of Central and Eastern Europe.”3

The focus of this chapter is to describe the challenges inherent in managing talent in emerging markets and the responses MNCs have adopted to address those challenges. Before focusing on emerging markets, some of the dynamics of talent management per se are outlined. The situation becomes increasingly complex when managing talent globally, and the challenge becomes even greater when the MNC’s global footprint extends to include emerging markets. To address these challenges, a framework for managing talent in emerging markets is proposed, and issues associated with each element of the model are discussed in turn. Finally, some learnings for managing talent in emerging markets are proposed.

1 Accenture (2011).

2 Schuler, Jackson & Tarique (2011).

3 Farndale, Scullion & Sparrow (2010:161).

C o p y r i g h t 2 0 1 3 . K R P u b l i s h i n g .

A l l r i g h t s r e s e r v e d . M a y n o t b e r e p r o d u c e d i n a n y f o r m w i t h o u t p e r m i s s i o n f r o m t h e p u b l i s h e r , e x c e p t f a i r u s e s p e r m i t t e d u n d e r U . S . o r a p p l i c a b l e c o p y r i g h t l a w .

EBSCO Publishing : eBook Collection (EBSCOhost) - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY AN: 1124515 ; Bluen, S. D..; Talent Management in Emerging Markets Account: s3642728.main.ehost

Talent Management in Emerging Markets

30

Increasing Talent Management Complexity: from Local to Global to Emerging Markets

The challenge of managing talent in a single (domestic) business unit is exciting. An indication of the scope of single-country talent management challenges is presented in table 1.

Table 1: Talent Management Challenges Facing an Organisation Operating in a Single Country

Talent Focus Area Key Questions

Business strategy alignment

What is the five-year business plan, and how does it shape the talent strategy? Do we have a compelling talent management business case? Do we have the right talent mix and bench strength to achieve the business plan?

Are our desired talent pools aligned to the business strategy?

Succession planning What are the vacancy and labour turnover rates and the resultant positions needing to be filled?

Is there suitable talent to fill the vacancies – either from within (internal cover and the multiple knock-on effects that such moves will create) or externally in the market?

On average, how long do we take to fill each vacancy, especially those that are critical to the business’s operations? How can we shorten this time to fill?

What does the talent mix look like? Do we have enough high-flyers to lead the company in the future?

Who are the engine room and the negatively plateaued people, respectively? What engagement, advancement and development plans are to be made for each person within these categories?

Attraction and selection

What can we do to ensure that we recruit a disproportionate number of high-calibre talent into the organisation?

Do we recruit people only to fill vacancies or does the company encourage recruiting people for potential, even if there is no vacant position for them to fill?

Similarly, do we choose people who have skills required to fill current jobs or do we rather opt for talent with high potential when making selection decisions?

How do we hone selection and promotion tools and skills to ensure culture fairness and enhance the predictive validity of talent decision making?

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

31

Chapter 3: Talent Management Challenges in Emerging Markets

Talent Focus Area Key Questions

Retention and engagement

How do we engage each person individually (rather than adopting a generic engagement plan) so that they are motivated (a) to perform optimally over time, and (b) to remain engaged and committed to the business?

Who are the restless people – the flight risks (the notoriously difficult task of predicting propensity to leave the business)? Can we accommodate their needs? Who require moves into other jobs? Who are likely to be promoted, and are they ready to take on the additional responsibility? What can be done to speed up this readiness?

Development Is our career development approach mutually beneficial to employees and the company?

Does the company have a learning and development plan in place to meet our current and future skills and leadership needs?

Who needs to be trained, coached or mentored? What is the nature of those learnings and how do we reduce time-to-competence?

Does everyone have an individual development plan agreed with their manager that is aligned to their competency and performance gaps, management/leadership capability needs and career paths?

Do we deliberately move high-potential people across functions, regions or geographies as a form of accelerated development?

Managing performance

How do we ensure that the high-calibre people we have attracted, retained and developed perform optimally?

Are the talent management and performance management approaches dovetailed and mutually supportive?

Reward and recognition

What, how, and at what market level, do we set competitive remuneration levels? What changes are needed to make the benefit structures competitive, yet affordable to the company?

Diversity How do we maximise transformation to truly embrace diversity?

How do we ensure that our diversity efforts go beyond headcount targets to transform the culture of the business?

Organisational culture

How do we create a total employment offering and market an employee value proposition that renders the business a true employer of choice – as perceived by existing employees and by aspirant employees in our target market?

How can we turn this organisation into the most desirable place to work?

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

32

Talent Focus Area Key Questions

Talent information system

How do we run a talent management system that provides all users with real-time, consistent and accurate data upon which to make talent decisions?

Talent review and evaluation

Have we selected the appropriate talent key performance indicators (KPIs) that drive business performance?

How do we optimise our talent KPIs?

Does meeting talent KPI targets enhance business performance?

Line management’s talent role

How do we enrol the chief executive officer (CEO), the Board and all line managers to fulfil their crucial roles in making talent management effective? How do we make them competent to fulfil these roles effectively?

The human resource (HR) function’s role in talent management

How do we substantiate a budget to implement the answers to all these questions and develop an effective talent team to achieve the desired results?

Does our talent strategy simultaneously meet business needs and conform to best practice?

Talent management’s impact on business performance

Ultimately, are we doing all that we can to attract, retain and develop a disproportionate amount of high-calibre talent that will enable the business to achieve its strategic objectives and win in the marketplace?

Given the multiple moving parts, inevitable uncontrollable factors, and unpredictable changes, the dynamism inherent in talent management in a single business unit makes it an extremely exciting and challenging endeavour.

The situation becomes far more complex, though equally strategically important, when managing talent globally. Global talent management is crucially important for three reasons:4 First, internationally competent business leaders represent a key component of global business success. Secondly, until recently, it has been extremely difficult to attract and retain suitable leaders to run international operations. Thirdly, given the complexities associated with international operations, talent management is more complex in global companies than in domestic firms. Indeed, the consequence of not deploying the right talent in the right places is a leading threat to MNCs. A quarter of the CEOs surveyed in the latest PricewaterhouseCoopers (PwC) CEO Survey5 said they were unable to capitalise on market opportunities or had to cancel or delay strategic initiatives because of talent constraints, including: talent-related

4 According to McDonnell, Lamare, Gunnigle & Lavelle (2010).

5 PwC (2012).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

33

Chapter 3: Talent Management Challenges in Emerging Markets

expenses rising more than expected; inability to innovate effectively or pursue market opportunities; cancelling or delaying key strategic initiatives; inability to achieve growth forecasts in overseas markets; and falling production and service-delivery quality standards. Thus, global talent management is a major strategic priority for CEOs. It is not surprising, therefore, that CEOs rated developing talent pipelines (and meeting with customers) as their most important priorities.6 The reason for talent being so important is that the talent shortage is global and not local. There are no hidden pools of talent that companies can access to solve the problem. The full extent of the strategic importance of global talent management has been articulated by several leading academics in the global talent field.7 These are summarised in table 2 below.

Table 2: Why Global Talent Management Is an Increasingly Important Strategic Issue for Multinational Corporations8

Trend Implication

The critical importance of global talent management is recognised

The success of MNCs is closely linked to how well they identify, manage and adapt to the many global talent challenges they face. To achieve this, they need to understand the environmental forces shaping talent management.

Competition for talent is now global

Competition for talent has moved from country to regional and global levels: talent resides throughout MNCs’ global operations. This requires a global talent management focus if MNCs are to remain competitive. This is becoming increasingly difficult, as MNCs compete in the same, limited talent pools where demand greatly outweighs supply. Consequently, MNCs have to become more attractive and develop compelling employee value propositions to attract and retain talent.

Global talent management is becoming more pervasive

With the rapid growth of both MNCs and the internationalisation of small and medium-sized businesses, global talent management appears increasingly on the strategic agendas of smaller organisations – not just the MNCs.

6 15th Annual CEO Survey (PwC 2012).

7 Some of the prominent writers on global talent management include: Collings, McDonnell & Scullion

(2009); Collings, Scullion & Morley (2007); Farndale, Scullion & Sparrow (2010); Hewlett & Rashid

(2010); McDonnell & Collings (2011); Ready, Hill & Conger (2008); Schuler, Jackson & Tarique

(2011); Scullion & Collings (2011); Scullion, Collings & Caligiuri (2010); Tarique & Schuler (2010).

8 Table 2 is adapted from: Schuler, Jackson & Tarique (2011); Scullion & Collings (2011); Scullion,

Caligiuri & Collings (2008); Tarique & Schuler (2010).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

34

Trend Implication

Knowledge-based economies require more highly skilled talent to fulfil more complex roles

The shift from product-based to knowledge-based economies and the dominance of the service sector have shifted the talent challenge to high-value people with higher cognitive abilities, which are typically in short supply. Furthermore, regarding global talent, cross-cultural competencies are required to perform effectively, yet they are relatively scarce.

The critical importance of MNC leaders is recognised

The success of MNCs in increasingly competitive environments depends heavily on the quality of their globally competent leaders.

The shortage of suitable international managers is a key constraint on MNC performance

The talent demand–supply gap is growing. The lack of suitable global managers has become a significant constraint on companies’ abilities to implement global strategies. In particular, a shortage of leadership talent has been identified as a major obstacle MNCs face when attempting to operate globally.

Increased cultural and geographical talent mobility

Increased globalisation, lower emigration barriers, and immigration and intercountry disparities in real wage rates have led to greater international talent mobility. This is most apparent amongst professionals and highly skilled workers, giving rise to brain drains in many countries.

Emergence of the truly global elite

Increasingly, people with special talents have no allegiance to country or region and happily cross geographic and cultural boundaries. Owing to their global connections and world-views, they relate better to people with similar skills than to people with the same national or ethnic origins. It requires a different talent management approach to attract and retain them.

Downsizing, due to the global recession, affects trust

Globally mobile talent is increasingly trading security for flexibility, becoming less dependent on a single employer. Lowered trust levels mean that the psychological contract of trading loyalty for job security is being replaced: global employees are increasingly free agents who come and go as they wish and are responsible for their own employability, learning and career development.

Retaining global talent is key

Talent raiding has emerged as an aggressive attempt by some companies to hire employees from competitors. Retention of top- level global talent is a key challenge, particularly when embarking on mergers and acquisitions or joint ventures.

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

35

Chapter 3: Talent Management Challenges in Emerging Markets

Trend Implication

Reverse migration has increased

In an attempt to reverse the brain drain, countries are encouraging returnee immigrants, who have very marketable international experience and networks, to come home. This represents a valuable talent pool from which companies can recruit.

However, repatriation is a major cause of labour turnover

Repatriation is a major cause of labour turnover and needs to be addressed, given the valuable experience expatriates possess. Global assignments themselves are used as a means of attracting, retaining and developing talent.

Demographics influence global talent management

Demographic factors that will influence talent availability and recruitment approaches in future include the following: • Declining birth rates and longevity are reshaping age

distributions. In certain developed countries, by 2025, the number of people aged 15 to 64 is expected to fall by 7% (Germany), 9% (Italy) and 14% (Japan). Thus the workforce rate is declining in the developed world. At the same time, the populations in emerging markets are increasing and getting younger.

• Companies are required to manage two generations (Generation X and Y) of employees with differing needs.

• The baby-boomers are ageing and approaching retirement.

• With China’s one-child policy, gender imbalances (more men than women) are apparent in the Chinese workforce.

Managing diversity is becoming increasingly important

As talent pools globalise, the levels of gender, ethnic, cultural and generational diversity increase, requiring MNCs to manage diversity effectively if they are to succeed.

HR is fulfilling an increasingly important role in MNCs

There is an increased recognition of the role HR fulfils in the success of MNCs. Given the intensification of global competition, HR’s role in planning and forecasting talent needs across the firm’s multiple locations, ensuring a ready supply of globally competent leaders to run MNCs and facilitating international learning and innovation, is acknowledged.

Leisy and Pyron (2009) highlight the global talent challenges involved when they observe that, to compete globally, MNCs need to adopt certain meta talent management processes, including the following:

• Effectively manage a dynamic and diverse workforce that is dispersed throughout the world,

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

36

• Comply with a maze of ever-changing tax, immigration and other laws and regulations,

• Maintain accurate and responsive HR data reporting,

• Address significant business and talent management differences between mature versus emerging markets,

• Deal with rising global labor costs in the face of a diminishing supply of skilled and semiskilled labor in emerging markets,

• Ensure that talent management programs are integrated and consistently applied to allow employees worldwide to be fully utilized, develop their careers and feel a part of one organization,

• Identify, develop and retain future business leaders around the globe,

• Maximize consistency, where appropriate, of worldwide HR policies and employee benefit programs.9

The challenges of global talent management are indeed daunting and more complex than those confronting talent managers operating in one (familiar) country. The task at hand becomes even more complicated when managing talent in emerging markets. In addition to the talent challenges discussed thus far, managing talent in emerging markets has unique challenges that need to be addressed. These can be narrowed down to five dynamics:

1. Sourcing talent in emerging markets: from cheap labour to skilled and managerial talent pools. Emerging markets have traditionally been viewed as a source of cheap labour. Given the global shortage of skills, emerging markets are being regarded as sources of skilled, professional and managerial talent, which adds to the complexity of the challenge.10

2. Rapid development has absorbed skilled talent in emerging markets. At the same time, developing countries, such as BRICS (Brazil, Russia, India, China and, to a lesser extent, South Africa), have grown so fast that there are insufficient skilled people to fill all the burgeoning positions opening up, especially in skilled and leadership roles. In fact, emerging-market MNCs are sourcing talent in developed countries. As Ren Jianxin, President of China National Chemical Corporation (ChemChina), observed: “Twenty-five years ago, ChemChina was spun off from China National Bluestar with a staff of just seven. Now we employ 160,000 people. We employ many people from Western countries, including at the management level. … we work with leading human resource consultancies to recruit more Western professionals.”11

9 Leisy & Pyron (2009:58-59).

10 Deloitte (2012); Manning, Massini & Lewin (2008).

11 PwC (2012:10).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

37

Chapter 3: Talent Management Challenges in Emerging Markets

3. Divergent education levels reduce the number of graduates suited to work in MNCs. The skills shortage is exacerbated because of the education-technology lag. Also, although tertiary institutions have mushroomed in emerging countries, they do not produce enough of the right calibre of graduates to fill skilled and leadership positions in MNCs.12

4. Problems with employing expatriates in emerging markets. MNCs have addressed the talent gap by recruiting expatriates to fill senior roles in emerging countries. This, in turn, creates its own challenges. Factors such as political instability, corruption, high crime rates, poor governmental or societal infrastructures, hostile commercial and labour laws, and ‘foreign’ cultures, customs and practices reduce the attractiveness of emerging-market countries as expatriate destinations.13 In the 2011 Brookfield GRS Global Relocation Trends Survey, the four countries rated as the most difficult for international assignees were: 1st China, 2nd India, 3rd Russia and 4th Brazil.14 Furthermore, expatriate cost to company is extremely high – estimated to be between three and four times the person’s home salary.15 Expatriate failure rates are also high (between 10 and 80%), and MNCs are poor at repatriating them post-assignment.16 Pattie, White and Tansky (2010) report that 27% of repatriates leave their MNC in the first year of returning home, and a further 25% leave the following year. To overcome these problems, MNCs have adopted alternate forms of employment arrangements to meet their talent requirements (eg short-term assignments, commuter assignments, international business travel, and virtual assignments).17

5. Challenges associated with hiring local talent in emerging markets. MNCs are hiring increasing numbers of high-potential local talent to fill senior positions.18 Hiring local talent creates its own challenges: to supplement education and competence gaps, MNCs offer extensive training, education and corporate university programmes.19 Because suitably trained local employees with the MNC-relevant skills are in such short supply, they command excessively high salaries, further increasing the costs of doing business in emerging countries.20 Also, local professionals and executives working in MNCs are highly marketable

12 Deloitte (2012).

13 Farndale, Scullion & Sparrow (2010).

14 Mercurio (2011).

15 Collings, Scullion & Morley (2007).

16 Sims & Schraeder (2005).

17 Collings et al. (2007).

18 Guthridge, Komm & Lawson (2008).

19 Accenture (2008); Cooke (2011); Ready, Hill & Conger (2008).

20 Farndale et al. (2010).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

38

and therefore easily poached by other MNCs, exacerbating the vicious cycle of salary escalation. A 2010 survey of 2 200 Chinese managers found that, over 18 months, two-thirds had received a compelling job offer and 46% had moved jobs with increases in pay of greater than 30%.21

Not only are the talent management challenges different in emerging markets, but fit-for-purpose solutions are also required. Ready, Hill and Conger (2008) identified the following four factors that differentiate successful from the less successful MNCs operating in emerging markets:

1. Brand: Employees in emerging countries are beginning to think beyond making a living to making a future. A company with a desirable brand implies personal advancement and the chance of global mobility.

2. Opportunity: Besides the regular connotations of opportunity (such as challenging work, development, competitive pay, and challenging assignments), opportunity in the developing world implies accelerated career tracks to senior positions, ensuring that their skills and experience develop in line with the rapid rate of growth in their markets.

3. Purpose: Local employees value companies with a game-changing business model – where they can be part of redefining their nation and even the world economy. Given that many have experienced poverty first-hand, they also value MNCs that focus on helping the less fortunate.

4. Culture: Four aspects of culture are important to local employees: an authentic brand promise; reward and advancement based on merit – that they were born in the developing world should not limit their global opportunities; receiving individual recognition and being part of a team; and a talent-centric culture.

In this chapter, both the challenges and the solutions associated with managing talent in emerging markets are explored. To help structure the myriad of issues involved, a model of talent management in emerging markets is presented (see table 3), and the challenges and responses associated with each element of the model are discussed. While the components of talent management models are similar across developed and emerging markets, distinctive contextual factors, evident in emerging markets, pose unique challenges for MNCs that require creative responses. These challenges and responses form the content of this chapter.

21 PwC (2012).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

39

Chapter 3: Talent Management Challenges in Emerging Markets

A Framework for Managing Talent in Emerging Markets

With the exception of three components of the model, namely localisation, expatriates and local employees, the talent management model presented in table 3 could be applied in most settings. However, it is the distinctive contextual factors evident in emerging markets that pose unique challenges for MNCs and that require creative responses.

For a talent management strategy to be effective, it must cater specifically for the talent needs emanating from the broader business strategy. Similarly, the success of the talent strategy is measured by the extent to which the business has the right talent to meet its strategic business plans across its global footprint. The links between the business and talent imperatives are reflected in the model, where the business strategy informs and shapes the talent strategy and the output of the talent strategy impacts business performance. This firmly locates the talent strategy within the broader business context.

The talent strategy is divided into three components, namely the core talent management value chain, underpinning processes, and key role players. The core talent management value chain comprises those sequential elements traditionally associated with the talent management process, namely succession planning, attracting, selecting and on-boarding, engaging and retaining, developing, managing performance, and rewarding and recognising talent. Underpinning the core talent management value chain are several processes, including diversity and localisation, organisational culture, talent reviews and evaluations, and talent information systems. These processes support the talent management value chain.

While the HR function is the custodian of talent management, there are several other key role players in any emerging-market talent management approach, namely business leaders, especially those heading up MNCs in the host developing countries, expatriates and local employees operating in those countries. Set out below are some of the challenges associated with each component of the model and how they can be addressed.

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

40

Table 3: Talent Management in Emerging Markets

TALENT STRATEGY

Underpinning processes Key role players

Talent value change

Business performance

Succession plan

Attract, select & onboard

Engage & retain Develop

Manage performance

Reward & recognise

Business strategy

Diversity and localisation Leaders

Organisational culture Expatriates

Talent reviews and evaluation Local employees

Talent system Human Resources function

1. Linking the Talent Strategy to the Business Strategy Challenges. The first, and arguably the most important, rule is that the sole purpose of the talent strategy is to support the business strategy by providing the right quantity and quality of people to implement the business strategies effectively across the global footprint, thereby maximising the MNC’s competitive advantage. In their survey of 340 global leaders, Ernst and Young (2010) found that companies whose talent management programmes were aligned with their business strategies delivered a return on investment that was, on average, 20% higher over a 5-year period than companies without such alignment. While talent management should embrace functional excellence and conform to best practice, it has no purpose outside of attracting, retaining and developing people in line with business needs.

HR Professionals need to know the strategic needs and directions of the firm and the important characteristics of the firm in order to craft a talent strategy, i.e., a strategy that identifies the important global talent challenges and identifies the global talent management initiatives that will effectively manage them.22

22 Schuler et al. (2011:513-514).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

41

Chapter 3: Talent Management Challenges in Emerging Markets

So, the first challenge is to shape the talent strategy in line with business needs and create a compelling business case for talent management. Once the business case has been accepted, the resources necessary to implement a talent strategy can be substantiated and implemented. A clear financial commitment to implementing the talent strategy is important, since the strategy can be costly and time-consuming, especially if it entails recruiting for potential, regardless of available vacancies. Also, during economic downturns, talent-related expenses, such as training, recruiting and, ultimately, retrenchments, are prime cost-cutting targets.23 Armed with a sound business case, short-term cost-cutting measures might be avoided when the broader, longer-term business implications are considered.

Solutions. Talent pools represent a significant connection point between the business strategy and the talent strategy.24 Strategically appropriate talent pools are shaped by asking questions such as, “Are our investments aimed at the talent areas that are most critical to the strategic success of the organization?”25 Once the talent pool has been defined to meet organisational success, the talent strategy to attract, retain, and develop people to fill that talent pool will be aligned with the corporate strategy.

The shortage of suitable and available talent to fill senior positions in emerging markets is well documented.26 Also, the success of MNCs in competitive environments depends heavily on the quality of their globally competent leaders.27 Facts such as these represent a strong motivation for a compelling talent business case. Simply stated, without attracting, retaining, developing, deploying and motivating the right number and calibre of people, MNCs will not meet their global aspirations.

South African Breweries (SAB) provides a good example of linking the talent strategy closely to the business plan. In the early 1990s, when SAB started globalising, a component of the business model was to acquire businesses, initially in developing countries, and to send in hand-picked expatriates to run the acquired operation. To do so, the South African operation had to provide talent to fill global positions while continuing to perform optimally, that is, it had to have sufficient bench strength to meet local and international demands. The size of this challenge was impressive: some 200 executives – 40% of the senior management ranks – were expatriated over a 10-year period. To become an effective talent nursery, a strong talent business case was articulated and implemented.28

23 See Sheehan (2012).

24 Boudreau, Ramstad & Dowling (2002).

25 Boudreau et al. (2002:17).

26 For example: Elegbe (2010); Li & Scullion (2010); McKinsey (2005).

27 Schuler et al. (2011); Scullion & Collings (2011).

28 See chapter 9 outlining the SAB talent case.

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

42

2. Emerging-market Talent Strategy: Core Value Chain

Having outlined the importance of linking the talent strategy to the business strategy, the focus turns to the talent strategy itself. In this section, emerging-market talent challenges and solutions pertaining to each of the elements of the talent core value chain are discussed.

(i) Succession Planning

Succession planning in a single business entity is difficult enough, given the number of ‘moving parts’ involved. The process becomes that much more complex when operating in multiple sites across the world, and, particularly, when some of those operations are located in emerging markets. This succession planning section is divided into internal and external components.

(a) Internal Environment

Challenges. A key planning feature is to achieve the right balance and calibre of people assigned globally across the MNC, especially when faced with a scarcity of talent. There needs to be a match between the strategic importance of the role in question and the candidate being sent to fill the position. This matching needs to be evaluated in relation to all other similar roles and people across the MNC, culminating in the right people being placed in the right jobs across the company and avoiding ‘robbing Peter to pay Paul’ scenarios. Also, the MNC must include all relevant host-country local employees when making succession plans, rather than focusing solely on home-country talent, which can create an unacceptable, two-tier talent system, deprive local talent of deserving career opportunities, and prevent the MNC from accessing a valuable source of high-potential talent.

To implement a global succession planning system, the MNC needs to calibrate all relevant jobs in terms of size, complexity and strategic importance, and all people within the global talent pool in terms of their experience, capability, potential to take on increasingly complex offshore roles, and emotional and cultural intelligence to operate effectively in emerging markets. This is a huge task if it is to be done accurately. Also, because of the problems associated with employing expatriates, the number of expatriates deployed needs to be kept to a minimum.

Solutions. The traditional approach of succession planning, which assumes stable environments and long-term career plans, is too linear to address the volatile and unpredictable nature of global talent management.29 Instead, MNCs are increasingly using talent pools, comprising “high-potential and

29 McDonnell & Collings (2011).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

43

Chapter 3: Talent Management Challenges in Emerging Markets

high-performing incumbents that the organisation can draw on to fill pivotal positions.”30 Central to the talent pool approach is selecting for talent (rather than only recruiting to fill vacancies), and placing people where and when the need arises.31 This also presupposes people within the talent pool are sufficiently flexible to take on varied roles in diverse locations and still thrive. Another issue is who owns the global talent pool? Traditionally, in decentralised operations, business unit leaders control their talent. This has deleterious consequences for talent management, because local leaders resist ‘losing’ their high-potential employees. However, given the strategic importance of deploying the best possible talent to take on key global assignments, increasingly MNCs are adopting a centralised approach to talent pool ownership. The solution is to define clearly which positions fall within the global talent pool and agree on guidelines by which people within the pool are attracted, developed, retained and deployed.

(b) External Environment

Challenges. The war for talent has morphed over recent years: talent within the developing world must be taken into consideration when conducting succession planning.32 With emerging countries clearly representing the growth engine of the world, the demand for top talent has never been greater. The problem has been aggravated because of years of ‘corporate imperialism’ which ignored the option of fostering local talent and failed to develop local talent pipelines. Now the MNCs have limited local resources to recruit.33

Despite recent increased unemployment, a scarcity of high-level knowledge talent exists in emerging markets, and the demand and competition for such talent remains high.34 McKinsey’s (2005) study on China’s looming talent shortages predicted that Chinese companies wanting to globalise would need 75 000 leaders who could work in global settings in the next 10 to 15 years, yet the current supply of such leaders is only 3 000 to 5 000. The serious shortage of Chinese professionals and managers is caused mainly by problematic training and education facilities.35 Although higher education, which was seriously disrupted during the Cultural Revolution (1966-1976), has subsequently mushroomed, it still cannot keep pace with China’s rapid economic development.

30 Collings & Mellahi (2009:307).

31 McDonnell & Collings (2011).

32 Deloitte (2010).

33 Hewlett & Rashid (2011).

34 Li & Scullion (2010).

35 Ke, Chermack, Lee & Lin (2006).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

44

A curious factor exacerbating talent shortages is spatial immobility of labour. Many African countries would rather hire overseas expatriates than recruit from other African countries, even if they pay up to a 500% premium instead of recruiting comparable and competent Africans.36

One of the key challenges is the quality of education in most emerging countries. According to Accenture (2011), there are 33 million university- educated young professionals in the developing world as opposed to only 14 million in the developed world. South Korea produces as many engineering graduates as the United States, despite having one-sixth of the population. China produces more graduates annually than the United States of America, Japan and France combined. But only a small percentage of developing-world graduates are suitable for working in MNCs. For example, India produces 300 000 information technology (IT) engineering graduates annually, and the United States only 50 000. However, in the United States and India combined, only about 35 000 graduates are suitable for employment in the target jobs.

Failure to produce suitable emerging-market graduates to meet MNC needs causes skills shortages.37 McKinsey (2005) found that less than 10% of Chinese candidates were sufficiently qualified to fill professional positions (eg engineers, accountants, medical staff), reflecting a major problem in the Chinese education system: an overemphasis of theory at the expense of practical application, independent and critical thinking, and teamwork. HR professionals in emerging markets such as China, Hungary, India and Malaysia report huge variations in the skill and suitability levels of their graduates. Poor English skills, dubious qualifications and cultural issues (eg a lack of teamwork experience, and a reluctance to take the initiative or assume leadership roles) were frequently mentioned problems.38 Similarly, HR professionals said they would consider hiring only 10 to 25% of India’s roughly 14 million university graduates, because the majority lacked the necessary training, language skills and cultural awareness to work for MNCs.39 Also, African and South American companies were falling behind in developing new technology skills that allowed for participation in the global economy.40

Solutions. Emerging-market MNCs that cannot find sufficient local talent are recruiting globally. For example, the recruitment programme of

36 Elegbe (2010).

37 Farndale et al. (2010).

38 Guthridge, Komm & Lawson (2008).

39 Holland (2008).

40 Scullion & Collings (2011).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

45

Chapter 3: Talent Management Challenges in Emerging Markets

Alghanim Industries, a Kuwaiti-based conglomerate, targets hiring people familiar with the corporate world and comfortable with working in a diverse workforce comprising 49 different nationalities.41 The booming market of international search firms is further evidence of the trend that MNCs are increasingly engaging in truly global talent searches to recruit top-level leaders.42

A neglected source of talent is women. Women are an obvious solution to the dire shortage of top talent in emerging markets.

Educated women represent the vanguard of talent management. Just as developing markets can bolster a company’s bottom line, the lessons learnt in attracting, sustaining and retaining the best and brightest women in those markets can enhance and strengthen an organization’s operations worldwide.43

(ii) Attraction, Selection and On-boarding

Challenges. Top talent is often not prepared to move to emerging-market locations.44 Because high-potential employees are in demand, they can choose their assignments and avoid high-risk locations.45 Different emerging markets pose different risks. For example, political instability has detracted from successful talent management in the Middle East, causing increased employee anxiety, distraction and negative talent flows. This is best illustrated by the instability prevalent in Iraq since 1980, causing mass migration of Iraqi talent to other countries, greatly depleting the Iraqi economy. A survey of 587 Middle East CEOs found that the CEOs perceived domestic political instability and global terrorism as the most serious threats to the business environment and to regional growth.46

A selection challenge in emerging markets concerns nepotism in candidate selection.47 For example, Waiko-ni-Wako (a tendency to hire relatives and people from one’s own tribe or province) is rife in Zambia, while, in certain cases, getting hired in the Ivory Coast depends more on who you know than what you know. Managers feel morally obliged to help community members who are less fortunate

41 Ali (2011).

42 Accenture (2008).

43 Hewlett & Rashid (2011:12).

44 Scullion & Collings (2011).

45 Farndale et al. (2010); Yeung, Warner & Rowley (2008).

46 Ali (2011).

47 While nepotism occurs throughout the world, it poses a selection challenge in emerging markets

and, therefore, is mentioned in this chapter.

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

46

than themselves. The ‘as-man-know-man’ practice in Nigeria relies on networks to influence selection decisions.48

A key selection consideration is ‘horses for courses’. People who perform well in their home countries do not necessarily excel in developing countries, and vice versa. As Douglas Oberhelman, Chairman and CEO, Caterpillar Inc., says:

Chinese leadership and needs are so different to those in India, Brazil, Canada and Belgium. Talent has to be regionally directed, and that’s what we’re working on. Frankly, it’s a bigger challenge, because as we’re new to some of these places and our growth is strong, we’re having trouble teaching what we want our leaders to do and know.49

Besides the normal technical and managerial competencies associated with the job, expatriate competencies required in developing countries typically include high levels of resilience, resourcefulness, independence, cultural fluency and sensitivity, political astuteness and statesmanship, being able to interact authentically with people at every stratum of society, and embracing diversity. In addition, given the nature of an expatriate assignment, especially when the destination is in a country that is very different from the home country, the selection choice extends beyond the incumbent to considering the suitability of the partner and family.

Another challenge concerns on-boarding expatriates. A third of new hires leave a firm within their first two years.50 However, a well-structured on-boarding programme can reduce turnover, increase productivity, and increase a company’s attractiveness to potential employees. On-boarding addresses four needs, namely organisational culture mastery, emerging interpersonal networks, early career support, and strategy immersion and direction.51 Given the differences in all facets of life confronting expatriates in developing countries, the need for familiarisation with both the company and the country is a key requirement for successful adjustment of expatriate families. Similarly, local employees joining a foreign MNC need on- boarding to understand the culture, customs and practices of the company in order to perform effectively.

Solutions. Market mapping, which entails benchmarking talent within a given market outside of one’s own company, is a useful means of identifying talent in a host country. It has been used successfully to identify appropriate senior-level skills in new markets or where MNCs are setting up operations in new countries and do not want to alert their competitors to their intentions.52

48 Elegbe (2010).

49 PwC (2012:26).

50 Stein & Christiansen (2010).

51 Stein & Christiansen (2010).

52 Sparrow & Balain (2008).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

47

Chapter 3: Talent Management Challenges in Emerging Markets

To address home-country employees’ reluctance to accept emerging-market assignments, an emerging trend in global companies is for the CEO and executive team to ‘own’ the top talent pool.53 Top talent pool members receive increased exposure and development and are groomed to take on increasingly senior leadership roles. In return, they are expected to accept assignments in diverse environments. Successful performance in emerging-market roles serves as a stepping stone to advancement in the group. By centralising the top talent pool, companies are able to deploy resources appropriately and fairly across all their global operations, including the traditionally least popular ones, and thereby optimise person–job fit wherever they operate.

Regarding unacceptable labour practices such as nepotism, the MNC needs to ensure that the relevant HR policies and practices are adhered to in host countries. This should eliminate unacceptable practices and ensure that the MNC gains and sustains a global competitive advantage.54

As regards on-boarding expatriates, certain companies specifically focus on assisting people embarking on an expatriate assignment into emerging markets. They offer immersion programmes into all aspects of host-country life, including culture, history, geography, politics, eating patterns, and general customs and practices. This greatly helps with expatriate family adjustment to their new environments.

(iii) Engagement and Retention

Challenges. Exacerbating the skills shortage problem, emerging markets are particularly susceptible to losing talent to developed markets. For example, over 75% of graduates in high-tech-related subjects from China’s top two universities, Tsinghua University and Beijing University, have gone to the United States since 1985 – a trend that is replicated at other leading Chinese universities.55 In India, IT and business process outsourcing sectors recorded a 30 to 45% labour turnover even during the 2008 to 2009 economic downturn – businesses need IT professionals to provide software and systems solutions to replace laid-off workers.56 Nigeria lost 10 694 tertiary-institution academics between 1986 and 1990; in 2007, approximately 36% of tertiary-educated Nigerians emigrated; and, in 2000, 20% of tertiary-educated Ugandans emigrated. The brain drain was also evident in Gambia (65%), Somalia (59%), Eritrea (46%), Mozambique (42%) and Sierra Leone (41%).57 The continental brain drain from Africa was caused by attractive, developed-market offers for African high-potential employees, as well as political and socioeconomic factors. As local

53 SABMiller (2011).

54 Schuler et al. (2011).

55 Cooke (2011).

56 Tymon, Stumpf & Doh (2010).

57 See Elegbe (2010).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

48

conditions worsened due to military rule or civil war, many educated Africans sought refuge abroad.58

Poaching is another retention challenge. Schuler et al. (2011) explain one of the causes of poaching in some developing countries: many MNCs have been expanding and relocating to developing countries. For example, in 6 years, Accenture’s Indian staff complement increased from 250 to 35 000. By 2008, as a consequence of MNCs moving rapidly to India, its skilled labour supply was almost totally employed. Now MNCs moving to India need to attract workers away from their existing employers.59 Because there is such a demand for high-level talent, the short-term solution of poaching senior managers with lucrative pay offers is rife in emerging markets. Bohara (2007:31) offers an alternate explanation for high labour turnover rates in India:

… for decades, multinationals have hired Indian nationals to run the business ‘in country’ with no expectation that these managers’ own aspirations and skills might take them from a local leadership role to a position of power in the home office. Now in India, talent repays this treatment by moving from company to company and making no promises for long-term commitment.

Once again, this highlights the need for global talent management to incorporate high- potential, host-country talent into the MNC’s international succession plans.

Remuneration is the main reason for labour turnover in China.60 Other reasons include career advancement, unhappy relationships with management, poor culture fit, and seeking better benefits, training and personal development. Similarly, labour turnover is increasing in the Middle East, caused by factors such as diversification of the economy, leading to increased job opportunities, workforce mobility, and a shortage of skilled labour because expatriates are moving elsewhere.61 Retention of skilled labour has become the most critical talent issue facing MNCs in the region.

Solutions. Greater engagement leads to greater performance and retention.62 However, in a survey of over 11 000 workers worldwide, only 31% were engaged and only 61% said they planned to remain with their organisations.63 Regarding scarce skills, because it is a sellers’ market, global companies are making longer- term talent investments with increased financial incentives to attract and retain top

58 Elegbe (2010).

59 Schuler et al. (2011).

60 According to Cooke (2011).

61 Ali (2011).

62 Corporate Leadership Council (2004).

63 BlessingWhite Research (2011).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

49

Chapter 3: Talent Management Challenges in Emerging Markets

talent.64 Profit-sharing and stock option schemes are an effective means of retaining professional and managerial staff in China, suggesting that the new materialism has overtaken traditional cultural forces promoting egalitarianism and altruism.65 MNCs operating in China, such as Citigroup, GE and HSBC, compete fiercely with local Chinese businesses for talent. They have tailored their employment value propositions, emphasising opportunities for real decision making, career development, housing, and education and learning. A survey of 113 Russian companies revealed that companies with formalised employer brands reported lower labour turnover rates and invested more in learning and development than companies with no employer brand.66 Thus, crafting a formal employer brand/employment value proposition helps reduce labour turnover in developing countries. Factors typically associated with retention in the developed world (ie intrinsic and extrinsic rewards, managerial support, professional development practices, and performance management practices) increased satisfaction with, and pride in, the organisation, which, in turn, were inversely associated with propensity to leave the organisation.67

One way of retaining emerging-market, high-potential employees is to offer them aspirational jobs with attractive rewards and opportunities for advancement that most local employers overlook. In emerging markets, the war for talent is so fierce that the temptation to overpromise and underdeliver must be avoided.68 Instead, companies that succeed in retaining talent ensure that they meet their promises. “[M]any of the people we interviewed were seeking a culture that would support the promise of an accelerated career path with growth opportunities for everyone, a commitment to meritocracy, and custom career planning.”69

(iv) Development

Challenges. A study of 260 MNCs revealed that most MNCs adopted haphazard or ad hoc approaches to succession planning and development.70 It concluded that MNCs have a long way to go before they fully embrace the need to strategically manage key employees. At least two specific development challenges face MNCs operating in emerging markets. First, expatriates need to develop the competencies

64 Deloitte (2010).

65 Cooke (2011).

66 Kucherov & Zavyalova (2011).

67 Tymon et al. (2010) investigated retention and labour turnover in a sample of 4 811 professionals

employed in 28 Indian firms.

68 Ready et al. (2008).

69 Ready et al. (2008:6).

70 McDonnell, Lamare, Gunnigle & Lavelle (2010).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

50

necessary to operate effectively in host countries. Secondly, local employees need to develop technical and managerial skills to perform effectively in MNCs.

Although there is a burgeoning tertiary-education industry across the developing world, many tertiary qualifications are not suited to the needs of MNCs.71 Poaching exacerbates an MNC’s appetite to train local people. Chinese organisations are wary of investing in development for fear of losing trained staff. This results in underresourced training efforts, which detract from the availability of suitably competent local talent.72

Career development poses unique challenges for MNCs in emerging markets. Compared with employees remaining in their home countries, expatriate career paths are less clear and potentially produce higher levels of insecurity, especially if there are no post-assignment job-placement guarantees. Also, being far away from home base, expatriates may develop a sense of alienation from the company. For local employees, career development is equally important. High-potential employees want to know that they have a future with the company beyond local borders and that they will not be disadvantaged in their career progression because they come from a developing country.73

Solutions. One way of preparing managers for overseas assignments is to send them to business schools located in host countries before they commence the assignment, to familiarise them with the local markets. Some Chinese MNCs are sending their top managers to executive development programmes offered by their companies or business schools to give them a broader, global understanding beyond their company- specific knowledge and experience.74 Chinese employees are also sent abroad to widen their knowledge and to understand the global business better. Some Western companies operating in China (eg P&G and Motorola) have created management development programmes to grow Chinese talent (Cooke 2011). Microsoft offers development programmes (such as rotation to the United States) and recognition programmes such as being selected as a ‘Silk Road Scholar’75, which appeal to Chinese employees.76

Action learning has emerged as a popular form of leadership development to familiarise leaders with business practices in emerging markets.77 Business schools, such as the Gordon Institute of Business Science, have shifted the focus of general

71 Accenture (2011).

72 Cooke (2011).

73 Ready et al. (2008).

74 Dietz, Orr & Xing (2008).

75 This is analogous in Western tertiary education to being selected as a Rhodes Scholar.

76 Schuler et al. (2011).

77 See chapter 5 on in-market action learning.

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

51

Chapter 3: Talent Management Challenges in Emerging Markets

manager development to cater specifically for operating in emerging markets. As such, these programmes cultivate managerial competencies specifically for managing in emerging markets.

Regarding the development of local talent, learning and development opportunities are important talent attractors for local employees keen to climb the corporate ladder. MNCs are attractive to Chinese employees who have strong career aspirations and are seeking development opportunities.78 Huawei, which has a strong learning and development focus, established the Huawei University in 2005, offering tailored training to employees and customers. New employees receive up to six months’ induction training there. Mentoring is used to develop junior professionals. Selected overseas employees are sent to Huawei headquarters to understand its strategies, processes and culture, and disseminate these upon returning home – a further example of leadership development for local talent.79

Standard Chartered Bank China developed a ‘raw talent superhighway’ programme comprising six components. It represents a good example of developing local talent:80

1. Selection: Once specific skills required are identified, Standard Chartered Bank investigates nonbanking industries with similar expertise and aggressively recruits employees from those industries by offering greater opportunities for career advancement.

2. Induction and orientation: Standard Chartered Bank offers intensive induction for new hires to acculturate them and explain the importance of company values and ethics, central in the financial service industry.

3. Technical training: The bank includes a five-day ‘boot camp’ that delegates have to pass before being exposed to the bank’s customers.

4. Professional and management development: New recruits undergo intensive training in English-language skills, communication and listening skills, and business etiquette. They receive career guidance and are exposed to networking sessions to understand the bank’s different career paths. The bank also offers an Asian best-practice management development programme and an extensive suite of e-learning programmes to ensure learning and development are accessible to all. Standard Chartered Bank has also established partnerships with Chinese universities to enhance recruitment and to offer employees ongoing professional development.

5. Stretch assignments and deployment: Standard Chartered Bank’s talent motto of ‘Go places…’ tells employees that, if they do well, their careers will progress

78 Cooke (2011).

79 Cooke (2011).

80 See Ready et al. (2008) who outline the Standard Chartered Bank China case in detail.

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

52

rapidly. It also emphasises that the bank is a global company with international opportunities. Chinese high-potential employees are often moved globally, including to the company headquarters in London.

6. Personal development and performance management: The bank’s culture is both nurturing and performance-driven. High performance standards are consistently maintained. Katherine Tsang, CEO of Standard Chartered Bank China, says, “We deal with problems openly and honestly, and that has led to the creation of an authentic and trust-based culture.”81

Standard Chartered Bank’s holistic approach to talent attraction, retention and development has created many positive consequences, one of which was to reduce attrition by 3% in a year.

Latin American beverage company, FEMSA, has adopted an innovative development-multiplier plan. FEMSA’s Josĕ Antonio Fernăndez Carbajaal says, “We train people by moving those with useful skill sets to train clusters of employees, who in turn train other clusters. Knowledge is disseminated firsthand and spreads fast.”82

An effective approach to expatriate career development is to appoint a home- executive sponsor for each expatriate, who contacts the expatriate regularly. Once a year, they have a formal career discussion, which forms part of the MNC’s career development process. Also, by including expatriates in ongoing key events (eg conferences, leadership forums), the MNC ensures that expatriates remain in touch with the organisational culture and feel part of the larger company. Lenovo, which acquired IBM’s personal-computer operations and is strongly rooted in China is a good example of how to approach career development in emerging economies.83 CEO Bill Amelio describes the company as ‘a stage without a ceiling for every employee – worldwide’.84 Lenovo provides methodical development for its employees, in line with their career aspirations: career maps are created for every member of the high- potential talent pool. Competence gaps are identified and steps are taken to close those gaps. Central to Lenovo’s talent-tracking process is that the career maps are linked to key positions across the globe and accountability for the entire process rests with Line Management and not HR.

(v) Managing Performance

Challenges. Managing performance is particularly susceptible to cultural interpretation and cross-country differences in custom and practice. Consequently, MNCs need to take care not simply to export their home-developed performance management

81 Ready et al. (2008:8).

82 Accenture (2008:27).

83 See Ready et al. (2008) who outline the Lenovo case in detail.

84 Ready et al. (2008:3).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

53

Chapter 3: Talent Management Challenges in Emerging Markets

approaches to host countries. For example, when SAB entered Tanzania, it exported its customer-focused goals approach to performance management. This approach experienced initial problems, despite being extremely successful in South Africa. Only once the programme was adapted to meet local needs and the logic in the broader company context was carefully explained did performance management gain traction in Tanzania. In China, performance appraisals display the most enduring influence of Chinese culture, which respects seniority and hierarchy, and values social harmony.85 Chinese performance appraisal systems are reward-driven, focusing retrospectively on the person’s performance. Conversely, Western appraisal systems adopt a developmental approach, focusing prospectively on individual performance and organisational goals. The challenge is to create a blend of the two approaches that achieves the desired performance results whilst maximising employee engagement.

Solutions. If performance management is to be effective in emerging markets, first, it needs to be adapted to local circumstances, and, secondly, it needs a strategic focus. The goals set must be linked to corporate objectives. It also needs to adopt a developmental approach by evaluating employees against their current job competencies and those required in future positions.86

One way of managing expatriate performance is to adapt the performance management system to take account of the host context.87 This entails factoring in the impact of exogenous factors on business performance (eg currency fluctuations), clearly articulating the expatriate’s goals, ensuring that performance evaluations measure the same things across countries, and determining the people best placed to evaluate the expatriate’s performance.

(vi) Reward and Recognition

Challenges. Salaries of managers and highly skilled employees (locals and expatriates alike) are generally inflated in emerging markets. Because the demand for local, high-potential employees greatly outweighs the supply, salaries are excessively high.88 Alternatively, expatriates, typically paid according to market conditions in their home countries, plus various expatriate premiums, receive much higher salaries than their local counterparts, who are paid in line with local market forces. This represents a source of injustice and frustration for local employees.89 However, if companies do not offer expatriates competitive packages, they will decline the

85 Cooke (2011).

86 McDonnell & Collings (2011).

87 Collings et al. (2007).

88 Farndale et al. (2010).

89 Leung, Zhu & Ge (2009).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

54

assignments, especially in less attractive destinations. Also, to attract employees to accept international assignments, MNCs often tailor packages to meet individual employee demands.90 Conversely, to cater for the increased numbers of expatriate assignments, MNCs have begun to standardise their expatriate pay approach. Dynamics such as these pose remuneration challenges for MNCs eager to attract and retain the best available talent without paying too high a premium.

Solutions. The goal of an expatriate package is to keep employees ‘whole’ – where the expatriate does not experience an overt gain or loss when all elements of the package are combined.91 To attract suitable talent, MNCs offer expatriates remuneration allowances to keep their sense of wholeness. These include host- country cost of living, healthcare, housing, foreign taxes, children’s education, and hardship allowances.92 These factors account for the unduly high packages earned by expatriates.

Another issue is the choice of a suitable expatriate remuneration approach. Three options have been identified by Sims and Schraeder (2005). The balance sheet approach aims at ensuring that the expatriate acquires equivalent purchasing power abroad to maintain home lifestyle. The host country-based approach curtails the spiralling costs of expatriate pay. It estimates what competitors are paying and the pay levels of local employees in comparable jobs, sharply restricting traditional allowances mentioned above. This approach also sends a message that doing an expatriate assignment is a prerequisite for upward advancement in the MNC. The international headquarters approach assumes all expatriates come from the same home headquarters and are paid on the same balance sheet programme. Gillette used this approach successfully when entering China.93 Thus the balance sheet approach would address the issue of individual tailoring, the host-country approach deals with local employee resentment, while the international headquarters approach addresses the need for standardisation.

An unduly high salary demand by local, skilled professionals in China has caused some MNCs (eg FedEx, TNT and HSBC) to adopt a ‘China plus one strategy’ – maintain some presence in China, while moving operations to lower-wage countries such as Vietnam and Bangladesh.94

90 Warneke & Schneider (2011).

91 According to Sims & Schraeder (2005).

92 Sims & Schraeder (2005).

93 Expatriate pay in emerging markets is a complicated topic that requires much elaboration to cover

properly. See Mark Bussin’s chapter in this book (chapter 6) for a detailed explanation of how to

meet the challenges in this field.

94 Schuler et al. (2011).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

55

Chapter 3: Talent Management Challenges in Emerging Markets

3. Emerging-market Talent Strategy: Underpinning Processes

Having outlined some of the challenges and solutions associated with the core talent management value chain, the focus shifts to issues associated with the processes underpinning talent management in emerging markets.

(i) Diversity and Localisation

Challenges. MNCs need to manage employees with dissimilar cultures, races, ethnicities, nationalities, religions, genders and generations, and all instances of prejudice need to be eradicated. Hewlett and Rashid (2010) collected data from 4 350 degreed men and women in Brazil, Russia, India, China and the United Arab Emirates and found that women in emerging markets were ahead of the curve regarding education, levels of ambition, and organisational commitment. However, several factors led them to be underleveraged. Problems included social disapproval of women travelling alone, the escalating crime rates which presented a harsh reality for professional women in emerging markets, and the triple whammy of gender, ethnicity and cultural bias. Between 25% and 36% of respondents from Brazil, China and the United Arab Emirates and 45% of the Indian respondents said that women were treated unfairly because of their gender. Another gender problem was work– home role conflicts, interestingly from the older generation, rather than childcare issues. In India and China, filial piety underpins the cultural value system, and daughterly guilt and responsibility are a far greater burden than maternal guilt. As one highly qualified Emirati woman explained, “It is part of the expectation of what children do in the Arab world. We take care of our parents when we grow up.”95

There is very little evidence of diversity management or the existence of diversity policies in Chinese organisations. Where they are in place, they take the form of conflict avoidance rather than being a value-add to the business. Similarly, in the Middle East, women and foreign labour are still discriminated against, and Westerners and citizens are on a higher pay scale than people from emerging markets.96

Regarding localisation, there are many sound reasons why MNCs should employ local talent rather than relying on expatriates. These include the high expatriate costs to company, the reluctance of expatriates to accept assignments, especially in unfamiliar emerging-market destinations, language, custom and practice difficulties, and the expatriate’s lack of a deep understanding of local conditions. Also, much goodwill is generated when MNCs appoint local people, especially into leadership positions. However, as outlined previously, it is difficult to find suitable local talent to fill senior MNC positions. Also, once on assignment, many expatriates are reluctant

95 Hewlett & Rashid (2010:103).

96 See Ali (2011) and Cooke (2011).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

56

to forego the high salaries they earn, especially when their post-assignment career paths are unclear. Thus the requirement that expatriates find local talent to mentor, develop and ultimately replace them is often unmet, and localisation remains a challenge.

Solutions. Regarding diversity, simply stated, there is no room for unfair discrimination in any organisation. That is especially true in MNCs operating in emerging markets where, typically, local people have endured many forms of hardship and do not need additional adversity in the form of discrimination imposed on them by foreign MNCs. A fundamental (expatriate or local) managerial selection criterion is, therefore, the absence of any discriminatory biases. MNCs must ensure that the policies and practices of their headquarters and all their subsidiaries are free from any form of prejudice. These policies also need to adhere to relevant host-country laws. For example, owing to pressure from civic rights organisations, some Middle Eastern governments have introduced laws to protect and ensure the dignity of all employees, which heralds a new talent-friendly approach to people management in the region.97

A host country-specific employment equity strategy, which conforms to local laws, customs, practices and context, needs to be developed in each MNC subsidiary. It must go beyond eliminating unfair discrimination to embrace diversity and ensure that the potential value-add of employing diverse people, each with their own contributions, is realised.98

To overcome the gender problems and capitalise on the wealth of female talent, Hewlett and Rashid (2010) propose four solutions. First, MNCs should find talent early by recruiting women directly from universities. For example, the Google India Women in Engineering Award was launched and has been successful in attracting and retaining female engineering talent. Secondly, MNCs need to help top, emerging- market women to build networks and relationships and feel valued. GE is piloting a talent-spotting and mentoring programme in the United Arab Emirates to help women connect with one another across the company. Thirdly, give women international exposure to increase their chances of breaking through the glass ceiling in MNCs. In emerging markets, this works best when companies back it up with flexibility and support to reduce the burden on families and spouses. Fourthly, help professional women to build ties to clients, customers and communities in emerging markets. This helps establish a broad support system dealing with the conflicting work–home demands. It also helps women succeed in business.

Key to adopting a successful diversity strategy is to ensure that it has a sound business case. As Rohana Rozhan, CEO of ASTRO Malaysia Holdings states,

97 Ali (2011). 98 This, in turn, poses additional challenges for MNCs operating in countries that have discriminatory

laws (eg laws discriminating against women) or where an informal caste system is still in place.

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

57

Chapter 3: Talent Management Challenges in Emerging Markets

“Diversity is part and parcel of everything we do because to succeed, ASTRO’s workforce must directly reflect its market place.”99

Regarding localisation, targets need to be set and met in much the same way that expatriates are required to deliver on any other performance target. Procter & Gamble, which focuses its growth in emerging markets, provides a useful approach to hiring local talent which ultimately feeds its global leadership pipeline. It has built a global talent supply chain process, which is coordinated globally but executed locally. Regular hiring and promotions are managed locally in the emerging markets, but high-potential prospects and key stretch assignments are identified globally. Hiring local, high-potential employees translates into creating a diverse talent pool for the entire group. At country leader level, there are about 300 executives who come from 36 countries. The leadership (ie top 40) comes from 12 different countries.100

Similarly, Hartmann, Feisel and Schober (2010) investigated how seven foreign MNCs operating in China attracted, retained and developed local talent. They found that, in most cases, the MNCs transferred their home-developed talent management practices directly to their Chinese operations. For example, high-potential employees were identified using standard performance appraisals. Round-table discussions were held by executives to determine the high-potential talent pools. Development either consisted of attending internal or external programmes. A common feature was the reliance on overseas assignments to integrate high-potential employees into the broader MNC network and to transfer organisational culture and strategy.

One way in which both diversity and localisation challenges can be addressed is to adopt a far more host-country orientation in selecting, developing, promoting and deploying local talent instead of trying to emulate the MNC’s headquarters within the host country. In this way, diversity can be truly embraced, local talent can be engaged, and an organisational culture can be forged that includes the best of both worlds.

(ii) Organisational Culture

Challenges. One of the major challenges facing MNCs in emerging markets is dealing with diverse cultures. Although many MNCs have strong, high-performing cultures, they cannot expect to translate their culture automatically into an emerging-market host operation.101 Instead, they need to respect the local culture and work within it to move the organisation forward. Cultural differences must be taken into consideration if they are to be successful in their host countries.

99 PwC (2012:24).

100 Ready & Conger (2007).

101 As noted by Fealy & Kompare (2003).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

58

Solutions. Presumably, the MNC’s culture is one of the features that made it successful in the first place. The challenge, then, is to take the key elements of that culture and infuse them into the host-country operation whilst simultaneously taking account of local cultures, customs and practices. Ultimately, the challenge is to develop a new organisational culture that builds on the best of both cultures and provides a talent-centric environment where high-potential employees thrive knowing that they are critical to the MNC’s success.102 Moreover, culture has an important role to play in effective talent management. If the MNC can create a welcoming culture that embraces all employees, it is likely to succeed in talent management. As Armando Garza Dada, Chairman of the Board of Directors, Alfa SAB de CV, Mexico, commented, “Our capacity to attract, retain and manage executive talent does not depend on the compensation package, but rather on our ability to create a sense of belonging to an organisation that offers a long-term relationship and a professional development opportunity.”103

(iii) Talent Analytics

Challenges. Because talent management has become such an important issue, it is imperative to move beyond instinct and gut feel when making talent decisions. Companies that are not using workforce analytics appropriately risk losing their competitive talent edge.104 In the PwC (2012) Survey, two-thirds of the CEOs in their sample consistently implementing new approaches to solve their talent shortages, are seeking relevant data and analysis from talent managers to make informed investment decisions around people. Schweyer (2004) notes:

If you do proper workforce analytics and planning then you know who to recruit, who to develop, who to redeploy and where to redeploy them, whether you should hire someone externally or promote someone from within, and whether you should look for a contingent worker, contractor, or full-time worker. Workforce planning analytics can help you make the best talent management decisions and align those with your corporate objectives.105

The importance of conducting detailed talent analytics in MNCs operating in emerging countries cannot be overstated. The challenge of gathering and analysing the necessary data is immense, especially considering the number of employees involved and the differing geographies, maturities, organisational structures, targeted

102 Several authors who discuss features of talent-centric cultures have been cited elsewhere in the

chapter. See: Farndale et al. (2010); Hartmann et al. (2010); and Ready et al. (2008).

103 PwC (2011:10).

104 Deloitte (2011).

105 Cited in Lewis & Heckman (2006:147).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

59

Chapter 3: Talent Management Challenges in Emerging Markets

jobs, talent pools and performance and potential levels to be considered in such an analysis. However, Lewis and Heckman (2006) caution that, to make informed talent decisions, companies should avoid simply collecting tables of talent data without first adopting a conceptual model to guide the choice of data collected and the manner in which it is interpreted.

Solutions. As MNCs become more global, complex, advanced analytics are being increasingly used to make informed talent-related decisions.106 Typically, talent reviews, containing all the relevant analyses, are cascaded up the organisation to successively senior levels and appropriate decisions are made at each level in the MNC.

Boudreau and Ramstad (2004) provide a useful framework for ensuring that valid talent conclusions are reached. Their ‘LAMP’ model describes:

• Logic: A rational talent strategy, linking talent pools to the MNC’s competitive advantage, to generate meaningful talent questions.

• Analytics: Once the logical structure is in place, the right analytics can generate insights into organisational issues. Analytics goes beyond statistics and research design, and requires savvy to ask the right talent questions and answer them intelligently.

• Measures: The challenge of measures is to balance precision and usefulness – sufficient data that is timely, reliable and available.

• Process: A change management process is needed to implement the talent decisions taken.107

Advanced analytic tools and techniques, such as predictive modelling, allow organisations to predict into the future and thereby enhance talent management decisions.108 Successful MNCs are using modelling to anticipate future talent supply and demand locally and globally. They are measuring recruiting effectiveness not just to forecast who will be hired, but to predict which recruits are likely to rise to leadership over time. Also, because people leave companies for various reasons, by using multivariate predictive modelling, companies can identify key employees who may be flight risks and use the insights to develop tailored plans to retain them.109

106 Deloitte (2012).

107 See Lewis & Heckman (2006:148).

108 Deloitte (2012).

109 Deloitte (2012).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

60

(iv) Talent Information Systems

Challenges. One way of driving talent analytics is to adopt an enterprise-wide software system. It should provide real-time data that can be mined to gain talent insights upon which informed talent planning and decision making can be based. The logistical challenges associated with designing, implementing and maintaining one standard system across multiple geographies, organisational maturities, languages and bandwidths are immense. Also, not all HR measures are standardised across every business in an MNC, which leads to incomplete or unstandardised data rendering cross-boundary comparisons unreliable. Furthermore, when operating a global IT system, it is extremely cumbersome to effect changes in one business without seriously impacting the entire group.

Solutions. Because of the size and complexity of designing and implementing a global, enterprise-wide talent system, a comprehensive, structured and detailed change management approach should form part of the design, build, implement and anchor phases of the initiative.110 However, there are alternative solutions to enterprise-wide systems. MNCs can use their existing systems, but with better integration. On the other hand, MNCs can jump-start their IT talent efforts by using cloud technology to host their reporting and analytics infrastructure, which provides analytics support based on industry best practices, thereby saving costs, time, capital expenditure and internal support requirements.111

4. Emerging-market Talent Strategy: Key Role Players

Talent challenges and possible solutions regarding the third component of the talent management strategy, namely the key role players, are now discussed.

(i) Leadership

Challenges. Arguably the most important factor determining the success of talent management (and, indeed, the success of MNCs) in emerging markets is the availability of suitable leaders for host-country operations. The shortage of leadership talent is the major obstacle MNCs face.

… Demographic shift – notably the impending retirement of baby boomers – along with changing business conditions, such as significant growth in largely unfamiliar markets, like China, have combined to produce something of a perfect storm. Leadership development has become a much more strategic

110 For example, see John Kotter’s (1995) eight-stage change model that could be applied to, and

adapted for, a global talent system implementation project.

111 See Deloitte (2012).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

61

Chapter 3: Talent Management Challenges in Emerging Markets

process …[indeed]… companies have been forced to pass on hundreds of millions of dollars of new business because they didn’t have the talent to see their growth strategies through to fruition.112

Leaders require distinct qualities and competencies and a desire to manage in culturally and geographically distant countries.113 Specifically, they need several forms of capital – cognitive capital: understanding how knowledge needs to be disseminated across the global footprint; social capital: making the necessary connections to perform boundary-spanning roles effectively; political capital: the legitimacy to be regarded as a credible leader in foreign countries; and human capital: the competency to operate in diverse cultural contexts. However, when selecting leaders, MNCs often focus solely on technical capabilities at the expense of other core capabilities. MNC leaders also need to develop local knowledge in their host countries.114 This includes information about the local economy, politics, culture and business customs, local demands and tastes, ways to access local labour pools, distribution channels, infrastructure raw materials, and other factors required to conduct business successfully in the host country.115 Caliguiri (2006) identified 10 tasks that global leaders of MNCs need to perform. These are: work with colleagues from other countries, interact with external clients from other countries, work with internal clients from other countries, speak different languages, manage employees of different nationalities, develop a strategic business plan on a global basis for their business unit, manage a globally linked budget for their business unit, negotiate in other countries or with people from other countries, manage foreign suppliers or vendors, and manage risk on a worldwide basis for their business unit. To do this effectively, global leaders need specific knowledge, skills and abilities, and personality characteristics.

Solutions. Given the capabilities expected of MNC leaders, it is essential that the right criteria are adopted when selecting and developing leaders for global assignments. For example, cultural intelligence is an important selection factor when intercultural effectiveness is required. Intercultural effectiveness is defined as “a set of cross cultural capabilities that describe a person’s capacity to function effectively in culturally diverse settings”.116

Sheehan (2012) found significant positive relationships between management development and perceived subsidiary performance in a sample of 143 Polish, Czech Republic and Hungarian subsidiaries of United Kingdom-based MNCs.

112 Ready & Conger (2007:2).

113 Farndale et al. (2010).

114 As argued by Shenxue & Scullion (2010).

115 See Makino & Deklios (1997), cited in Shenxue & Scullion (2010:191).

116 Ng, Van Dyne & Ang (2009a:99).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

62

The most effective means of developing global leaders is by giving them long-term international assignments, sending them on executive development programmes, and selecting them as members of international, cross-functional project teams.117 Ruddy and Anand (2010) note a 70-20-10 rule for developing global leaders: 70% development via job experience, 20% through coaching and mentoring, and 10% through formal training. The high levels of independence and increased job responsibility inherent in overseas assignments contribute to their growth and career success: executives with overseas experience are more marketable, are promoted more often, perform better, and get paid more than executives with only local experience.118 However, exposure to cultural diversity and international assignments does not necessarily enhance learnings. Instead, all four components of experiential learning (ie concrete experiences, reflective observation, abstract conceptualisation, and active experimentation) are necessary for learning to take place. It is the quality of the travel experience rather than the quantity of travel that aids global leadership development.”119

(ii) Expatriates

Challenges. Three reasons for using expatriates are: (a) to fill positions where suitable local talent is not available; (b) to develop managerial competence; and (c) to ensure knowledge transfer across business units.120 However, expatriate failure rates have been reported at anywhere between 10% and 80%.121 The main reason cited is the inability of the expatriates and/or their families to adjust to the host-country culture. It has been estimated that each expatriate failure costs the company over $1 million: taken collectively, expatriate failures cost United States firms about $2 billion per year.122 A key challenge, then, is to ensure that expatriates succeed, and one way to do this is to closely manage the performance of each expatriate. This depends largely on his or her competencies, which include technical abilities, personal adaptability to foreign cultures, and familiarity with the host country.123

Collings et al. (2007) identify several challenges associated with the use of expatriates. First, limited availability of suitable international managers to run overseas operations curtails the implementation of global plans. Factors contributing to this challenge include complications arising from dual-career couples – partners

117 Ruddy & Anand (2010).

118 Pattie, White & Tansky (2010).

119 As cautioned by Ng, Van Dyne & Ang (2009b).

120 See Edström & Galbraith, as cited in Collings et al. (2007).

121 Okpara & Kabongo (2011).

122 Sims & Schraeder (2005).

123 Shenxue & Scullion (2010).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

63

Chapter 3: Talent Management Challenges in Emerging Markets

are often prohibited from working in host countries, thereby retarding their career growth. A further supply-side challenge is the failure of MNCs to implement an effective talent management approach. Expatriates’ willingness to move to emerging markets where they may be most needed is becoming increasingly rare. The three countries with the fastest-growing, new expatriate destinations, namely China, India and Russia, are also the three countries with the highest levels of difficulty for project managers and expatriates: 21% of firms reported that China had the highest assignment failure rates.124 Secondly, expatriate costs are exorbitant. Interestingly, although it is estimated that the cost of an expatriate is between three to four times the person’s home salary, little is known of the exact benefits of employing expatriates: return- on-investment analyses are scarce. The third challenge is the mushrooming demand for expatriates. The growth of foreign direct investment in developing countries has created a demand for global managers with the competencies to operate in these distant markets. Because of the shortage of talent within these markets, particularly shortages of qualified, local senior executives and the strategic roles these managers play, the use of expatriate managers in emerging markets has become inevitable.125 Fourthly, expatriate failure (where expatriates terminate assignments and return home prematurely) is prevalent. The high costs associated with expatriate failure, both direct (eg salary) and indirect (eg loss of market share, reputation damage in host country) suggest that far more attention should be paid to preventing such failures. This leads to the fifth challenge, expatriate performance. Factors impacting on performance include technical expertise, self and family adjustment to the host culture, environmental factors (eg politics, stability and cultural distance from one’s home culture), support provided by the home country, and peculiarities of the host environment. The final set of challenges identified by Collings et al. (2007) is the changing nature of careers in the international context. Increasingly, international assignments are viewed as a means to an end – developing competencies that increase individual employability and marketability, rather than limiting career progress to the MNC in which they work.126 Also, there is a growing trend for self-initiated foreign work experience rather than being sent on international assignments by the MNC. These self-initiated foreign workers are self-financing and take responsibility for establishing themselves in their host environments.

A further problem is poor retention of repatriates (ie repatriated expatriates). By disseminating useful knowledge and new perspectives gained on assignment, international experience acquired by repatriates is invaluable.127 However,

124 Farndale et al. (2010).

125 Shenxue & Scullion (2010).

126 This is aligned to the notion of a boundaryless career: building market value through transfer across

boundaries, rather than pursuing traditional organisational careers.

127 Pattie et al. (2010).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

64

repatriation is typically poorly handled. Over 30% of companies do not discuss repatriation with expatriates at all, and over 40% only discuss their homecoming less than 6 months before the assignment ends. Less than 37% do any form of career planning with repatriates, and only one-third of MNCs have a strategy to address the problems that expatriates encounter when returning home. Many MNCs have no policies or programmes to assist repatriates with their careers. Consequently, it is not surprising that repatriate labour turnover is high. The 2010 Brookfield GRS Global Relocation Trends Survey found that 61% of expatriates left their companies within 2 years of completing their overseas assignment.128

Approximately two-thirds of expatriates are accompanied by their partners, children or both, which places the stress of cross-cultural relocation, education and social development of their children on them and their families.129 Also, over half the expatriate families are dual-career couples, which further adds to the stress of the family – especially when the partner is expected to give up his or her job and be unemployed in the host country.

Given the myriad of challenges associated with the expatriation process, it is surprising that many companies have failed to address the issue of globalisation effectively in their talent management programmes. Ernst and Young (2010) found that 63% of their respondents stated that their organisations lacked standard policies for managing the careers of international assignees, and 47% said their MNCs placed little or no importance on helping repatriates reintegrate into the organisation.

Solutions. To address cultural-adjustment problems, MNCs provide expatriates and their families with cross-culture training, the benefits of which have been widely acknowledged.130 To overcome difficulties of employees rejecting overseas assignment offers, companies have adopted several alternate approaches. These include (a) hiring self-initiated movers; (b) hiring host-country nationals – specifically those who have worked for other MNCs and who have global experience and networks; (c) hiring third-country nationals, who are particularly valuable when MNCs wish to transfer common standards across diverse countries. This approach has been embraced by Adidas, where over 50% of its internationally mobile talent comprises third-country nationals. Adidas aims to increase that number by 20% as part of a strategy to build its employer brand.131 Another approach is to hire already-acculturated talent (inpats) – expatriates from emerging countries who have worked in developed countries. Inpats are increasingly being used as a source of international management for at least three reasons: first, to create diverse strategic perspectives; secondly, because of the rise of emerging-market assignments, which

128 Reif (2011).

129 Cole (2011).

130 Okpara & Kabongo (2011).

131 Farndale et al. (2010).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

65

Chapter 3: Talent Management Challenges in Emerging Markets

are unattractive to traditional expatriate pools; and, thirdly, owing to the growing need to provide career opportunities for high-potential employees.132 Other alternatives to expatriation include short-term assignments, commuter assignments, international business travel and virtual assignments that overcome many of the challenges facing traditional international expatriation.133

To address high levels of repatriate labour turnover, Bolino134 (2007) proposes MNCs adopt three support practices:

• Career development plans entail career planning to ensure career progression has been enhanced (rather than sidetracked as many repatriates feel), repatriate agreements and skill utilisation (where repatriates are formally assigned meaningful jobs commensurate with their seniority that use their experience acquired overseas), and formal recognition of the value of international experience.

• Connectivity mechanisms include regular home visits and home-office communications. They help keep expatriates abreast of home-country corporate changes. Developing and retaining a meaningful relationship with someone in the home country also assists with repatriate success.

• Repatriation assistance includes pre-return repatriate training to familiarise expatriates with the challenges they will face upon homecoming and updating them with any technical or structural changes that have occurred in their absence. Logistical support includes identifying houses, helping select movers and providing family support.135

Expatriate success is positively associated with family adjustment in the host country.136 Employer support for expatriates’ spouses increases overall family adjustment, reduces premature assignment withdrawal, and increases the spouse’s willingness to accept long-term global assignments. Cole (2011) found that the most valuable form of spousal support was assistance with networking regarding employment opportunities in the host country. Hiring existing expatriate spouses to assist newly arriving spouses also assists with the settling-in adjustment period. Another important form of support is assistance with finding and creating an appropriate social network, which enhances the psychological wellbeing of the expatriate spouse.137

132 Farndale et al. (2010).

133 Collings et al. (2007).

134 See Pattie et al. (2010) for a full discussion of the career-development practices proposed by Bolino.

135 Pattie et al. (2010).

136 Cole (2011).

137 Cole (2011).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

66

Finally, there are six domains in which immigrants need to acculturate in order to adjust effectively. These include politics and government, work, the economic domain (including consuming goods and services), family relations, social relations, and ideology, which includes ways of thinking, principles and values, as well as customs and religious beliefs. However, most MNCs do not focus on all of these domains in attempting to help expatriates adjust to their host-country environments.138

(iii) Local Employees

Challenges. MNCs are increasingly moving away from using expatriates, favouring local talent instead.

The use of expatriates to turn a business around or to open a new market is declining, mostly because of the cost involved and the limited success of expatriates in these assignments…Allan Church from Pepsi said, “We are having more success with local home-grown talent than with expatriates, as they are better at managing within the local business culture. Expatriates often take three to five years to make an impact on the people they manage and then they move on again.”139

Similarly, Petr Šulc of the Czech pharmaceutical company, Zentiva, commented, “Strong local management is very important. We cannot do business in a country from outside that country, and it cannot be done by someone who has no experience, contacts or knowledge of the markets.”140 Notwithstanding this recognition of the importance of hiring local talent, in emerging markets, local talent that meets the stringent criteria of MNCs is scarce – either because of poor education or because high growth in those economies has given rise to a shortage of available talent. This poses a major challenge for MNCs.

Solutions. Ways of addressing local talent issues have been discussed under various headings throughout the chapter.141 These include setting localisation targets to ensure that localisation takes place, sending local employees on accelerated learning and development experiences, sending local, high-potential employees on overseas assignments, deploying them across the MNC’s global footprint, and generally providing them with attractive career opportunities.142 One approach to ensuring

138 See Haslberger & Brewster (2008).

139 Ruddy & Anand (2010:587).

140 Accenture (2008:25).

141 See Richard Forbes’s chapter (chapter 7), which outlines a variety of approaches to managing local

talent in emerging markets effectively.

142 See Ready et al. (2008).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

67

Chapter 3: Talent Management Challenges in Emerging Markets

a seamless transition to local leadership is tasking expatriates with identifying, developing and supporting local, high-potential employees to take over from them. As Louis Camillleri, Chairman and CEO, Philip Morris International, Switzerland, said, “Ultimately, you can’t rely solely on expatriates to run a local business forever. They certainly have an important role to bring our affiliates in given countries up to certain standards, but they also have the critical role of transferring knowledge and expertise so that those businesses can stand on their own. The goal is that those affiliates are eventually run by country nationals.”143 Similarly,

…because the competition for all kinds of talent is truly worldwide, leaders have to solve the global talent problem in their own countries. We cannot outsource our way out of this shortage. Those days are over. Countries like India that in the past have provided resources for outsourcing are now experiencing their own talent shortages. Nor will immigration solve the problem, because countries like China, once sources of skilled talent, are now luring their expatriate workers home to take advantage of higher wages and a growing economy.144

Indeed, Jeffrey Joerres (2011), CEO Manpower at McKinsey, states that the era of employing Western expatriates in emerging markets is ending. Instead, he proposes adopting a ‘reverse expatriate’ strategy. Reverse expatriates are local managers who are selected to lead the local subsidiary of an MNC. They are sent on a developmental immersion into the MNC’s established operations for several months. He cites numerous examples where this growing practice has been tremendously successful and concludes that “any multinational that really wants to grow in emerging markets should think hard about implementing a reverse-expatriate strategy of its own”.145

There are over 20 million people of Indian origin who live overseas, and the Chinese diaspora is greater than 35 million, which represents a valuable source of local talent.146 Many MNCs are wooing these people back home by going to overseas recruitment fairs and by maintaining links with overseas-based executives.

Some companies are focusing longer term on increasing the market readiness of talent by providing secondary schooling for local children. Embraer, the Brazilian aircraft manufacturer, runs a school for underprivileged children. It is also creating physics laboratory stations that enable the curriculum’s engineering module to be replicated across multiple schools.147

143 PwC (2011:12).

144 Gordon (2009:viii).

145 Joerres (2011:2).

146 Accenture (2008).

147 Accenture (2008).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

68

(iv) HR Function

Challenges.

For many HR organizations, emerging markets used to be the last thing they focused on. Now it’s becoming the first. … In fact, a recent Deloitte and Forbes Insight Survey highlighted the competition for talent that is occurring globally and in emerging markets as the most pressing talent concern today.148

The complexity of talent management facing MNCs in emerging markets is great. The challenges facing corporate HR functions of MNCs focus on effectively managing two key issues: increased global competition for highly skilled talent, and new forms of international mobility needed in emerging markets.149 Regarding talent competition, Farndale, Scullion and Sparrow (2010) identify three issues: first, to remain competitive, MNCs are demanding increasingly high skills levels and qualities in staff. Secondly, because there is insufficient senior talent to meet these demands in traditional talent pools, MNCs are broadening their search to wider talent pools across the world. Thirdly, to remain competitive, MNCs are extending their pipelines and are increasingly forward planning to recruit ahead of the curve. Marijn Dekkers, Chairman of Bayer AG says, “what is changing is that among Western companies, the ability to hire, develop and retain talent in the emerging economies has become a major point of competitive differentiation”.150

Regarding the second issue, international mobility needed in emerging markets, Farndale et al. (2010) use China and India as examples to demonstrate that local talent in these countries is not meeting the rigorous demands of MNCs. Retention of knowledge workers in emerging markets is a further issue facing MNCs. The need to improve employee engagement and retention in emerging markets is an HR priority. Because of the shortage of local talent and the reluctance of individuals to be mobile, the consequence for HR is to develop alternate methods of sourcing international talent beyond expatriates.151

MNCs’ changing global business models represent a major challenge for HR. Historically, MNCs adopted an international or federal model, where operations in the rest of the world were subordinate to the MNC’s home market. Alternately, the entrepreneurial (or multidomestic) model has been embraced, where multiple geographies are all treated separately.152 Many MNCs are increasingly moving to a third model, where the businesses are globally integrated and the MNC’s home market

148 Deloitte (2011:10).

149 Farndale et al. (2010).

150 PwC (2012:20).

151 See the section on expatriates above for a detailed account of this.

152 Deloitte (2012).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

69

Chapter 3: Talent Management Challenges in Emerging Markets

is treated as one of many global markets. This shift represents one of the most significant transformations an MNC will ever make, and HR’s role in this process (especially regarding the far-reaching talent implications) is central.153

Solutions. Common HR outputs in MNCs include focusing on the top talent across the company, developing core management capability by accelerating development of senior leaders, conducting proactive succession planning, and developing a pool of highly competent global managers.154 Farndale et al. identify four key HR roles:

• Champions of process to oversee the global implementation of a talent management strategy that ensures the MNC’s talent base is fit for purpose.

• Guardians of culture to oversee the implementation of values and systems when developing a talent management culture and employer brand globally. MNCs entering emerging markets may take an expedient approach to implementing global best practice, especially in least-developed countries where labour standards are low and employment regulation enforcement is weak.155

• Network leadership and intelligence to be in touch with the latest trends in the internal and external labour market and to possess the leadership to act upon those trends.

• Managers of internal receptivity to fulfil a role in managing expatriates’ careers and ensuring that they are looked after in the process.

To perform these roles, HR needs to shift to a capability-driven perspective, focusing across the MNC to participate in mutual sharing of talent, which, in turn, reflects a move towards a more centralised approach to global talent management.156

As globalisation increases, MNCs will need direction and support from HR to develop global talent strategies that provide new skills in new places and to create a leadership pipeline that can be rapidly deployed to capitalise on global opportunities as they arise.157 Also, MNCs will need HR’s help to manage increasingly complex and diverse workforces with vast differences in nationality, culture, socioeconomic background, lifestyle and education, in addition to the traditional diversity factors of gender, race, ethnicity, religion and generation.158

153 Deloitte (2012).

154 Farndale et al. (2010).

155 It is common for Chinese workers to be asked to work overtime at short notice – paid or unpaid (Cooke 2011).

156 Farndale et al. (2010).

157 Deloitte (2012).

158 Deloitte (2012).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

70

Ultimately, HR is the custodian of the entire talent management strategy. As such, HR needs to design and implement the processes, competencies, and innovative solutions to all the talent management challenges identified throughout this chapter. The measure of HR’s success is the extent to which it is able to shift the notion of talent being an inhibitor of global expansion to a competitive advantage that is widely regarded as a cornerstone of the company’s success across the world.

5. Business Performance

This leads directly into the last stage of the model, the impact of the talent management strategy on business performance. If the MNC meets all the challenges associated with talent management in emerging markets, then the company will have become successful in attracting, retaining and developing a disproportionate number of high- calibre, diverse people with the right skills and motivation that can be deployed in the right place at the right time and right price to enhance the corporate culture and contribute meaningfully to the MNC’s performance.

Conclusions

Managing talent in emerging markets poses certain challenges. However, with the right creativity and compassion, these can be addressed in a way that enhances the MNC’s competitive advantage. From the preceding analysis, several learnings accrue for MNCs on how to manage talent in emerging markets:

1. The sole purpose of a talent strategy is to support the MNC in achieving its strategic goals. Therefore, it needs to be derived from the corporate business plan and must be measured in terms of its contribution to the achievement of company goals.

2. Because there are so many moving parts involved in global talent management, it is important to adopt a systemic, holistic approach that includes the overarching corporate strategy, all the components of the talent value chain, the underpinning processes, and the key role players.

3. Critical to this is the need to attain relevant, accurate and current information on all people in the defined talent pools upon which informed, talent-related decisions can be made. The existence of an enterprise-wide IT system that provides real-time talent data helps streamline talent management across multiple geographies.

4. The adoption of a global talent pool of senior executives, managed centrally in the MNC’s headquarters, provides the best approach to dealing with the selection, retention, development and deployment of people to lead the various businesses across the globe.

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

71

Chapter 3: Talent Management Challenges in Emerging Markets

5. Because the challenges facing MNCs in emerging markets are so different from home-country jobs, the criteria for success and subsequent selection, on- boarding, retention, development and promotion of both expatriates and local talent need to be tailored to meet each host country’s explicit needs.

6. Because the circumstances of each of the talent pool members operating in an emerging-market MNC is unique, a ‘one size fits all’ approach needs to be replaced with an individually tailored talent management approach that caters to their specific needs and family circumstances.

7. Because of the dramatic changes in global talent dynamics, MNCs need new and innovative approaches to resourcing their operations. These include finding appropriate ways of sourcing and developing talent across the world (in particular local, high-potential talent in host countries), adopting alternative approaches to the traditional expatriation process, and optimising the skills and experiences of repatriates as well as local, high-potential employees when they move from host to home countries.

8. Besides the regular leadership criteria, specific characteristics of successful MNC leaders in developing countries include high levels of emotional and cultural intelligence, resilience, political astuteness, ethics, the common touch, an absence of any prejudice, and a strong and supportive family structure.

9. The MNC operating in emerging markets has an opportunity to be a good corporate citizen that goes way beyond making financial gains. By imparting lessons learnt from the home country and being receptive to the culture, customs and practices of the host country, the MNC can benefit from the best of both worlds. Local talent and the broader community thrive as a result of the employment, development, advancement and global opportunities that the MNC brings. At the same time, the MNC benefits from the unique skills, culture, diversity and creativity that local talent brings to the workplace, not only in the local environment, but also globally.

10. At the heart of any talent management approach is the key relationship between an individual employee and his or her manager. If that relationship is poor, then talent management will suffer, no matter how good the systems and processes. As well-known authors Buckingham and Coffman159 observed – people join companies, but they leave their managers. “The manager creates the connection between the employee and the organization, and as a result, the manager- employee relationship is often the ‘deal breaker’ in relation to retention.”160

159 Marcus Buckingham and Curt Coffman of the Gallup Organization, coined the phrase in their in-

depth study of great managers across a wide variety of situations in the best-seller ‘First, break all the

rules: What the world’s greatest managers do differently’.

160 Lockwood (2007:5).

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

72

11. Finally, there is no single silver bullet for success in talent management. Instead, if an MNC wants to be competitive in attracting, retaining, developing and deploying high-calibre talent, it needs to create the right environment and to adopt a total employment offering that will be attractive to its target talent pools. This is as applicable to a small business operating in a single town as it is to a global MNC.

References

Accenture. 2008. Multi-polar World 2: the Rise of the Emerging-market Multinational. www.accenture.

com/forwardthinking

Accenture. 2011. War for Talent. http://www.Accenture.com/…/WarForTalent.aspx

Ali, AJ. 2011. Talent Management in the Middle East, in Global Talent Management, edited by H Scullion

& DG Collings. New York: Routledge.

Andors, A. 2012. Hidden in Plain Sight: in the War for Talent in Fast-growing Markets, Local Women Are

the Not-so-secret Weapon. HR Magazine January:34-35.

Bhatnagar, J. 2007. Talent Management Strategy of Employee Engagement in Indian ITES Employees: Key

to Retention. Employee Relations 29:640-663.

BlessingWhite Research. 2011. Employee Engagement Report 2011. Princeton, New Jersey:

BlessingWhite, Inc.

Bohara, A. 2007. Managing Talent in a Global Work Environment. Employment Relations Today Fall:27-

35. www.interscience.wiley.com

Boudreau, JW & Ramstad, PM. 2004. Talentship and Human Resource Management Measurement and

Analysis: from ROI to Strategic Organizational Change. Working Paper G 04-17 (469). Los Angeles:

Center for Effective Organizations, University of Southern California.

Boudreau, JW, Ramstad, PM & Dowling, PJ. 2002. Global Talentship: toward a Decision Science

Connecting Talent to Global Strategic Success. Working Paper. Ithaca, NY: Center for Advanced

Human Resources Studies, Cornell University.

Buckingham, M & Coffman, C. 1999. First, break all the rules: What the world’s greatest managers do

differently. Simon & Schuster: USA.

Caliguiri, P. 2006. Developing Global Leaders. Human Resource Management Review 16:219-228.

Cole, ND. 2011. Managing Global Talent: Solving the Spousal Adjustment Problem. The International

Journal of Human Resources Management 22(7):1504-1530.

Collings, DG, McDonnell, A & Scullion, H. 2009. Global Talent Management: the Law of the Few.

Poznan University of Economics Review 9(2):5-18.

Collings, DG & Mellahi, K. 2009. Strategic Talent Management: a Review and Research Agenda. Human

Resource Management Review 19:304-313.

Collings, DG, Scullion, H & Morley, MJ. 2007. Changing Patterns of Global Staffing in the Multinational

Enterprise: Challenges to the Conventional Expatriate Assignment and Emerging Alternatives. Journal

of World Business 42:198-213.

Cooke, FL. 2011. Talent Management in China, in Global Talent Management, edited by H Scullion & DG

Collings. New York: Routledge.

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

73

Chapter 3: Talent Management Challenges in Emerging Markets

Corporate Leadership Council. 2004. Employee Engagement: Framework and Survey. Corporate Leadership

Council. Washington DC: Corporate Leadership Board. ww.corporateleadershipcouncil.com

Deloitte. 2010. Talent Edge 2020: Blueprints for the New Normal. www.Deloitte.co/us/talent

Deloitte. 2011. Human Capital Trends 2011: Revolution/Evolution. Deloitte.

Deloitte. 2012. Human Capital Trends 2012: Leap Ahead. Deloitte.

Dietz, MC, Orr, G & Xing, J. 2008. How Chinese Companies Can Succeed Abroad. McKinsey Quarterly May.

Edström, A & Galbraith, JR. 1977. Transfer of Managers as a Coordination and Control Strategy in

Multinational Organizations. Administrative Science Quarterly 22:248-263.

Elegbe, JA. 2010. Talent Management in the Developing World: Adopting a Global Perspective. United

Kingdom: Gower.

Ernst & Young. 2010. Managing Today’s Global Workforce: Elevating Talent Management to Improve

Business. United Kingdom: Ernst & Young Global Limited.

Farndale, E, Scullion, H & Sparrow, P. 2010. The Role of the Corporate HR Function in Global Talent

Management. Journal of World Business 45(2):161-168.

Fealy, L & Kompare, D. 2003. When Worlds Collide: Culture Clash. Journal of Business Strategy 24(4):9-13.

Gordon, EE. 2009. Winning the Global Talent Showdown: How Businesses and Communities Can

Partner to Rebuild the Jobs Pipeline. San Francisco, CA: Berrett-Koehler Publishers.

Guthridge, M, Komm, AB & Lawson, E. 2008. Making Talent Management a Strategic Priority. McKinsey

Quarterly January:49-59.

Hartmann, E, Feisel, E & Schober, H. 2010.Talent Management of Western MNCs in China: Balancing

Global Integration and Local Responsiveness. Journal of World Business 45:169-178.

Haslberger, A & Brewster, C. 2008. The Expatriate Family: an International Perspective. Journal of

Managerial Psychology 23(3):324-346.

Hewlett, SA & Rashid, R. 2010. The Battle for Female Talent in Emerging Markets. Harvard Business

Review May:101-106.

Hewlett, SA & Rashid, R. 2011. Winning the War for Talent in Emerging Markets: Why Women Are the

Solution. Boston, MA: Harvard Business Review Press.

Holland, K. 24 February 2008. Working All Corners in a Global Talent HUNT. The New York Times.

http://nytimes.com/2008/02/24/jobs/24mgmt.html

Joerres, J. 2011. Beyond Expatriates: Better Managers for Emerging Markets. McKinsey Quarterly May:1-4.

Ke, J, Chermack, TJ, Lee, YH & Lin, J. 2006. National Human Resource Development in Transitioning

Societies in the Developing World: the People’s Republic of China. Advances in Developing Human

Resources 8(1):28-45.

Kotter, J. 1995. Leading Change: Why Transformational Efforts Fail. Harvard Business Review March-

April:59-67.

Kucherov, D & Zavyalova, E. 2011. HRD Practices and Talent Management in the Companies with the

Employer Brand. European Journal of Training and Development 36(1):86-104.

Leisy, B & Pyron, D. 2009. Talent Management Takes on New Urgency. Compensation and Benefits

Review 41:58-63.

Leung, K, Zhu, Y & Ge, C. 2009. Compensation Disparity between Locals and Expatriates: Moderating the

Effects of Perceived Injustice in Foreign Multinationals in China. Journal of World Business 44:85-93.

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

Talent Management in Emerging Markets

74

Li, S & Scullion, H. 2010. Developing the Local Competence of Expatriate Managers for Emerging Markets:

a Knowledge-based Approach. Journal of World Business 45:190-196.

Lewis, RE & Heckman, RJ. 2006. Talent Management: a Critical Review. Human Resource Management

Review 16:139-154.

Lockwood, NR. 2007. Leveraging Employee Engagement for Competitive Advantage: HR’s Strategic Role.

SHRM Research Quarterly 1-11.

Makino, S & Deklios, A. 1997. Local Knowledge Transfer and Performance: Implications for Alliance

Formation in Asia. Journal of International Business Studies 27:905-928.

Manning, S, Massini, S & Lewin, AY. 2008. A Dynamic Perspective on Next-generation Offshoring: the Global

Sourcing of Science and Engineering Talent. Academy of Management Perspectives August: 35-54.

McDonnell, A & Collings, DG. 2011. The Identification and Evaluation of Talent in MNEs, in Global

Talent Management, edited by H Scullion & DG Collings. New York: Routledge.

McDonnell, A, Lamare, R, Gunnigle, P & Lavelle, J. 2010. Developing Tomorrow’s Leaders – Evidence of

Global Talent Management in Multinational Enterprises. Journal of World Business 45(2):150-160.

McKinsey. 2005. Assessing China’s Looming Talent Shortages. Boston: McKinsey Consultants.

Mercurio, V. 2011. Brazil: a Mobility Road Map for an Emerging Market. Strategic Advisor 7(64) June:1-4.

Ng, K, Van Dyne, L & Ang, S. 2009a. Beyond International Experience: the Strategic Role of Cultural

Intelligence for Executive Selection in IHRM, in Handbook of International Human Resources

Management: Integrating People, Process and Content, edited by PR Sparrow. Sussex, United

Kingdom: Wiley.

Ng, K, Van Dyne, L & Ang, S. 2009b. Developing Global Leaders: the Role of International Experience

and Cultural Intelligence. Advances in Global Leadership 5:225-250.

Okpara, JO & Kabongo, JD. 2011. Cross-culture Training and Expatriate Adjustment: a Study of Western

Expatriates in Nigeria. Journal of World Business 46:22-30.

Pattie, M, White, MM & Tansky, J. 2010. The homecoming: a Review of Support for Repatriates. Career

Development International 15(4):359-377.

PwC. 2011. Growth Reimagined. The Talent Race is Back On. 14th Annual Global CEO Survey 2011.

PwC. www.pwc.com/ceosurvey

PwC. 2012. Delivering Results: Growth and Value in a Volatile World. 15th Annual Global CEO Survey

2012. PwC. www.pwc.com/ceosurvey

Ready, DA & Conger, JA. 2007. Make Your Company a Talent Factory. Harvard Business Review June:1-10.

Ready, DA, Hill, LA & Conger, JA. 2008. Winning the Race for Talent in Emerging Markets. Harvard

Business Review November:1-10.

Reif, C. 2011. Repatriation the Right Way. Strategic Advisor 7(60):1-4.

Ruddy, T & Anand, P. 2010. Managing Talent in Global Organizations: a Leadership Imperative, in

Strategy-driven Talent Management, edited by R Silzer & BE Dowell. San Francisco: Jossey-Bass.

SABMiller. 2011. Global Model for Talent Management (TM) 2011. Internal company document.

Schuler, RS, Jackson, SE & Tarique, I. 2011. Global Talent Management and Global Talent Challenges:

Strategic Opportunities for IHRM. Journal of World Business 46:506-516.

Scullion, H & Collings, DG. 2011. Global Talent Management: Introduction, in Global Talent Management,

edited by H Scullion & DG Collings. New York: Routledge.

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

75

Chapter 3: Talent Management Challenges in Emerging Markets

Sheehan, M. 2012. Developing Managerial Talent: Exploring the Link between Management Talent and

Perceived Performance in Multinational Corporations (MNCs). European Journal of Training and

Development 36(1):66-85.

Shenxue, L & Scullion, H. 2010. Developing the Local Competence of Expatriate Managers for Emerging

Markets: a Knowledge-based Approach. Journal of World Business 45:190-196.

Sims, RH & Schraeder, M. 2005. Expatriate Compensation: an Exploratory Review of Salient Contextual

Factors and Common Practices. Career Development International 10(2):98-108.

Sparrow, JP & Balain, S. 2008. Talent Proofing the Organization, in The Peak Performing Organization,

edited by CL Cooper & R Burke. London: Routledge [108-128].

Stein, MA & Christiansen, L. 2010. Successful Onboarding: a Strategy to Unlock Hidden Value within

Your Organization. New York: McGraw Hill.

Tarique, I & Schuler, RS. 2010. Global Talent Management: Literature Review, Integrative Framework,

and Suggestions for Further Research. Journal of World Business 45:122-133.

Tymon, WG, Stumpf, SA & Doh, JP. 2010. Exploring Talent Management in India: the Neglected Role of

Intrinsic Rewards. Journal of World Business 45:109-121.

Warneke, D & Schneider, M. 2011. Expatriate Compensation Packages: What Do Employees Prefer? Cross

Cultural Management: an International Journal 18(2):236-256.

Yeung, AK, Warner, M & Rowley, C. 2008. Growth and Globalization: Evolution of Human Resource

Practices in Asia. Human Resource Management 47:1-13.

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use

EBSCOhost - printed on 2/2/2020 10:10 AM via TRIDENT UNIVERSITY. All use subject to https://www.ebsco.com/terms-of-use