Recruitment Challenges in Emerging Markets

By Jamie Ferguson, VP of Global Business Development, Maxwell Drummond

As developed nations begin to recover from the global financial crisis, emerging markets such as China, India, Brazil and several African countries continue to grow at an unprecedented rate. The oil and gas industry is a key player to this development in many of these markets whilst it continues to aid the further growth of established markets. CEOs of global multinational companies operating in emerging markets see these regions as integral to their companies’ future growth and success. According to a survey conducted by The Economist, Latin America, the Middle East and Northern Africa were among the top regions that senior leadership felt would hold the greatest opportunities for their business in terms of revenue and growth. Another study by PriceWaterhouseCoopers states that over a quarter of CEOs anticipate an international acquisition in 2012, demonstrating the faith they have in emerging economies. However, the vast potential for opportunity does not come without associated challenges. As expected in an emerging market, talent shortages are at the top of many oil and gas leaders’ minds.

Despite rapid economic growth in many emerging markets, qualified senior leadership is one of the biggest hindrances on a company’s success and future growth.How can this challenge be overcome? An obvious answer is compensation. Many times it costs to attract the most highly qualified leadership to emerging markets, explaining why these markets top the charts when it comes to leadership compensation. Competition for talent also drives salary wars between companies and between regions, causing salary inflation to skyrocket.In a recent salary report, leadership roles in emerging countries such as Nigeria and Ghana were among the top compensated with the highest bonuses in the world.

Another challenge contributing to emerging markets’ leadership crunch is expatriates versus local leaders. Companies must remember that when pursuing local talent in emerging markets they might require different recruitment strategies than utilized in western markets. Traditional methods such as professional databases and networking may be less effective and cultural differences may hinder the ability to identify and meet future candidates. Executive search companies have the ability help clients navigate through these challenges by utilizing internal networks to identify and attract local leadership candidates. Multinational companies may sometimes prefer a local leader to fill leadership and management positions due to their local cultural knowledge and familiarity with suppliers and local contacts. However, these local individuals may not have the same breadth of international leadership experience as expats who have held leadership positions in several regions, so leadership development in emerging regions is key. An increasingly common request from our African client base is to re-attract the national diaspora back to their home country. As this region matures we expect this trend to continue and become increasingly important.

We urge clients to ignore geographical boundaries and focus on attracting the right talent for the specified role.

About the author

Jamie Ferguson joined Maxwell Drummond’s Aberdeen team in 2006 and by July 2011 was promoted to Vice President of Global Business Development. Jamie has extensive experience managing executive level searches for clients spanning the oil and gas value chain and has deep industry networks developed from working on assignments in over 20 countries on 6 continents.

Maxwell Drummond International is a world leading retained search consultancy offering professional search services to clients in all sectors of the energy and natural resources industries.