Attracting Talent in Emerging Markets

By Jamie Ferguson, Vice President US and Latin America, Maxwell Drummond

Multinational organizations are constantly challenged with identifying and attracting the most talented leadership and workforce to their companies. While many succeed in doing so in their offices in developed regions, it can be a struggle in the emerging markets they are operating in. As economic activity shifts from North American and European markets to markets in Latin America, Asia and Africa, an accelerated percentage of global growth will take place in these emerging regions, straining the already tight pool of talent.

Talent remains a scarce commodity in emerging economies. Not to say there are not talented individuals within these markets, they just come at a heavy price and this issue makes them hard to retain. A recent report cites paying top people in Brazil, China and India almost double the pay of peers in the United Kingdom. Managers in China, for example, change companies at a rate of 30 to 40% a year, which is five times the global percentage. Obviously, compensation is a key factor in attracting leaders to these regions, though it is a slippery slope as both companies and regions are getting into salary wars, driving inflation up even further. Offering long-term incentives is one way to offer a creative, yet competitive compensation package whilst also aiding the retention of senior leaders.

Global companies must make themselves attractive to locals in the markets they operate in. This includes not only appointing local content to visible roles within the company but also ensuring that the markets in which they are operating in are represented in some way on their Boards. In the US, less than 10% of directors of the largest 200 companies are non-US nationals. Given the international interests of many of these companies, this is a low percentage. Local leadership development is an incredibly important aspect to this. When appointing a local leader to a senior leadership role, these individuals have the cultural knowledge and relationships with key suppliers and contacts, though they may not have the breadth of international experience expats will likely have. In Africa particularly, there is much emphasis placed on local talent. Companies must be aware that if they cannot find an individual with the right blend of experience, they will have to train and develop them. Developing talent will be increasingly important as these markets continue to mature.

When the brand of an organization is developed effectively, this can motivate and excite future leaders to develop themselves and contributes to building a company’s presence on the global stage. The brand story must be authentic and employees must be able to imagine their rise to Board level. Whilst competitive pay and continued training remain important in emerging markets, it is important local employees’ skills and experience gather pace in conjunction with market growth. Employees will value an employer that plays a part in bettering their own country as well as the world economy. Global citizenship is an important value that should be embodied by both companies and employees to ensure the advantages of international business are visible in all office locations.

About the author
Jamie Ferguson joined Maxwell Drummond’s Aberdeen team in 2006 to focus on executive search in the energy sector. In 2007 he was promoted to General Manager in Aberdeen and in 2009 Jamie relocated to Houston as Vice President of Maxwell Drummond’s USA and Latin America business.

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.