With the many changes in Asia, including China’s fluctuating economy and the high growth rates seen in developing South East Asian countries, the corporate world is often subject to an almost constant state of flux. Leaders are needed to smoothly navigate their organisations in moving forward to ensure the company’s continued success.
Here are the strongest executive hiring demands that my colleague, Franck Johnson, director of Page Executive South East Asia, and I have observed throughout Asia as companies move to stay ahead:
Trend 1: Localisation of talent in China
Though this trend is not necessarily new — it’s actually been evident over the past decades – it is certainly showing no signs of slowing down and we continue to work on C-level roles where the requirement is for PRC nationals. Both Chinese and blue chip international companies are actively looking to replace overseas executives — including Asian expatriates — with local talent for their CEO, CFO and COO positions and may offer salaries of up to CNY2-3million to lure the best candidates.
Returning Chinese and home-grown local talent who have built extensive experience from working at multinational corporations (MNCs) are largely sought-after because they are often equipped with a better understanding of China’s market and culture — a great advantage that these executives can leverage. These professionals also have the much-coveted global experience acquired from their time abroad.
Furthermore, companies in China now need to make contributions to social welfare on behalf of their foreign employees, lessening the incentive of retaining or hiring foreign C-level executives unless truly necessary.
Trend 2: Rise of local executives in South East Asia
Similar to trend 1, the rise of local talent taking on executive roles in South East Asia, especially in MNCs, has also increased significantly over the past few years. Local executives are in demand because they can “speak the language” and bring instant cultural sensitivity to the business. Such executives come with certain distinct traits like having an overseas education and international working experience, and spending the bulk of their careers in MNCs.
While the previous trend of bringing in expatriates from an organisation’s headquarters as country heads has now significantly reduced, especially in Malaysia and Indonesia, such executives are still deployed in certain circumstances. For example, when the right talent is not available in the local market — a situation seen often in niche industries. The rationale behind this is to allow the DNA (i.e. values and culture) of the parent company to be injected locally, paving the way for a succession plan that features local talent.
Trend 3: Growth of 2nd and 3rd tier cities in China
This is still at the early adopter stage, but large branded organisations have already invested heavily into second and third-tier cities such as Chongqing and Chengdu, while keeping their headquarters at first-tier cities like Beijing and Shanghai. We have also seen companies in the fast-moving consumer goods sector move their production plants inland where production costs are cheaper and access to inland markets is easier.
Interest in the second-tier cities have also largely been boosted by the Chinese government’s stimulus package which provided upgrades to airports, railways and roads. With this, foreign organisations are also keen to invest, hence creating more job opportunities for job seekers.
From our observations, professionals have been quick to embrace the change. In the recent Michael Page Greater China Employee Intentions report, over a third surveyed said they would consider moving to a second or third-tier city, citing good work-life balance as the main driver for it as well as faster progression. The latter is especially true in Shenzhen’s technology and financial services industries where the “talent war” rages on and the demand for the best people continues to outstrip supply.
Trend 4: Rapid growth of e-commerce
In general, traditional retailers, especially those in luxury, have felt impact of the recent economic slowdown. As a result, many in Hong Kong, for example, are shifting from a hard sales model to a more client-servicing approach, emphasising roles such as personal shoppers and stylists. This has led to a corresponding demand for senior-level sales professionals who adopt consultative selling techniques, as they are able to sell a “solution” instead of a product.
Many retailers are also adopting new offline-to-online strategies, focusing on e-commerce to expand their business and create new revenue streams. However, the talent pool within Asia remains relatively small, given the market’s lack of maturity. More employers are, therefore, open to hiring specialised candidates from around the region or the more mature Western markets and relocating them.
Trend 5: Increase in city-focused roles in Hong Kong
The focus on city-based roles with fewer and fewer available regional roles is a trend that has been slow and gradual over the past 10 years. Previously, MNCs used Hong Kong as a platform to get into China, but greater willingness to accommodate international businesses on the mainland means this move is often no longer necessary.
However, the financial services sector appears to have bucked the trend as more fast-growing Chinese companies, especially those specialising in asset management, are entering the Hong Kong market and looking to expand internationally. The city is often seen as an international gateway to global markets, investors and cross-border mergers and acquisitions, among others. As a result, there has been a corresponding demand for senior-level candidates who have solid experience managing Chinese and international markets.
Trend 6: Growth of the Chinese entrepreneur
The rise of Chinese employer brands is well documented, but with more and more local brands becoming well-established and aggressive in their growth strategies, this is a rich area for high quality talent to explore. While more time is needed for many Chinese companies to become truly internationalised, there are some good examples in digital and retail that have shown true entrepreneurial spirit and gained overseas investment. While many Chinese businesses are looking internationally, many will be forced to look internally too, as increasing regulation comes into force.
With the rise of Chinese employer brands, we are also seeing a talent shift from MNCs to domestic firms as these firms become increasingly competitive with their employer value proposition. Many of these companies are also ‘cash rich’, willing to invest in great people, and provide more opportunities for talent to take on decision-making roles.
The above trends are relevant and specific to the executive level in the Asian region now and will feature strongly as we continue through 2016. In addition, Page Executive has also identified the seven leading trends that will shape the future of executive recruitment worldwide. Download the full report to explore these trends in more detail.
The key Asian executive trends in 2016 include:
- Localisation of talent in China
- Rise of local executives in South East Asia
- Growth of 2nd and 3rd-tier cities in China
- Rapid growth of e-commerce
- Increase in city-focused roles in Hong Kong
- Growth of the Chinese entrepreneur