Asia-Pacific economic growth has created unprecedented demand for skilled professionals across many sectors. One of the biggest challenges today for growing businesses is finding, empowering and retaining the right talent. There are enormous untapped markets and opportunities in Asia, but finding qualified staff remains a tough task.
When we look at the nature of the regional talent environment, multiple factors come into play. In my role at SAP, I am on the road most of the year, which gives me exposure to macroeconomic trends taking place across the region.
One major trend I've come across is high turnover rates.
Asia-Pacific hiring levels are twice as high as in the West, according to a recent PricewaterhouseCoopers study. However, only half of the recruitment activity is driven by growth.
The other half comes from the need to replace employees leaving for seemingly more attractive positions. Many survey respondents said they had had to cancel or delay a key strategic initiative over the previous 12 months because the right talent wasn't there.
The new millennial generation is critical for our workforce. In India, more than half of the population is composed of millennials. According to a study by the Business and Professional Women's Foundation, these Generation Y members will make up roughly 75% of the world's workforce by 2025.
In terms of numbers, millennials are catching up with the soon-to-retire baby boomer generation, but because of their different expectations of the workplace, the market and businesses are being forced to reconsider traditional human resource models. This change will redefine the future of work for an environment that is highly digitized, mobile, social and sustainable.
At SAP, our millennial employees are tremendously talented; they are eco-friendly, socially adapted and well-connected citizens. But they need help to gain experience. There is a big gap between what Generation Y wants from work and what its members experience in the workplace.
This does not apply only to young talent. Asia is talent rich but experience poor. For example, our team in Europe may have 1,000 people who have experience handling a specific task, whereas the Asia-Pacific team may have just 100.
Our company is not alone. The Economist Intelligence Unit recently surveyed C-level executives in the region to ask about the issues that keep them up at night. About 53% cited staff shortages.
The Korn/Ferry Institute produced a report on Asia's next wave of leaders that it called "Asia 2.0." The paper concludes, "The talent pool for Asia 2.0 leaders is extremely shallow." It also notes a pronounced shortage of new types of skills needed to take businesses forward.
The problem multiplies as you go up an organization's ranks. This is partially due to businesses waiting too long to train leaders, as the Harvard Business Review and others have noted.
Looking for solutions
Companies can take a number of measures to deal with the talent challenge.
One initiative that brings good outcomes is to provide a global graduate/university program, which eases the transition from campus to corporation. For example, companies can offer three months of intensive training in the classroom, followed by three months of on-the-job training.
This type of program can accelerate the development of young talent. Improving the time it takes to make new employees productive is not just relevant to business, it is also relevant to graduates who want to contribute and be recognized right away.
Responsible action by the information technology community can create vast new markets and generate more opportunity in developing Asia. In fast-growth countries like Mongolia and Laos, the demand for IT skills is increasing with the economic boom.
Effective graduate programs in partnership with universities and educational institutes can prepare these economies with the right talent and skill pool to better connect and compete in the global environment. It will also be a critical step for them to grow more sustainably.
Mergers and acquisitions are another area where companies need to manage talent loss. These deals often come with pressure on the combined entity to show immediate results. It is especially important for large multinationals to handle the merger process patiently. Newly formed teams across different geographies need to get to know each other as they operate side by side and share opportunities. The process can sometimes take years but should lead to much better results. With this kind of approach, companies can enjoy high retention rates during large acquisitions and bring opportunities as well as great people into their organizations.
To innovate, today's corporations need design thinkers, convention challengers and industry experts. Both multinational companies and small businesses have to understand and adapt to the implications of the talent challenge. The prosperity of the region depends on it.
Adaire Fox-Martin is the chief operating officer of SAP Asia Pacific Japan.