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As more and more companies accelerate their Asia-Pacific expansion, how to effectively recruit talent in this key region has become a significant challenge for businesses. On September 6th, we held a grand event titled "Asia-Pacific Talent Trends: Steering the New Channel of Business Growth" in our Shanghai office. This hybrid event, seamlessly blending online and offline participation, offered an in-depth exploration and analysis of the talent landscape across the Asia-Pacific's major markets, providing valuable insights and strategies for companies' talent strategies in this vibrant region.
At the kick-off of the event, Andy Bentote, Regional Managing Director at Michael Page Asia-Pacific, unveiled pivotal insights from the Michael Page Talent Trends 2024 report. Andy highlighted that the report juxtaposes the divergent expectations and viewpoints of employers and employees, shedding light on the chasm between these two vantage points. From the employers' lens, the paramount challenge in the Asia-Pacific talent acquisition landscape is aligning with job seekers' salary expectations, trailed by the dearth of requisite skills in the market, and the challenge of identifying candidates who align with the corporate ethos. This underscores that compensation is a paramount factor in recruitment. Conversely, from the employees' standpoint, even among those content with their current remuneration, a staggering 86% are open to new job prospects, demonstrating that for staff, merely meeting salary expectations is insufficient to retain talent.
Andy further illuminated that across the Asia-Pacific spectrum, employee expectations diverge significantly from one country to another on various metrics. For instance, regarding workplace flexibility, 53% of respondents in Australia consider it the most important factor when job hunting, which is twice as much as India (27%), while in Mainland China, this figure is only 22%.
Furthermore, emerging technologies are revolutionizing the APAC workplace. 41% of employees are using AI at work, and 60% believe that AI technology will have an impact on their long-term career plans.
In light of these insights, Andy offered three tips for companies: First, embrace the ambiguity of business operations. In the complex modern business environment, leaders must adapt to ambiguity and understand that decision-making often involves trade-offs, thus formulating better management and talent strategies. Second, enhance employee readiness. Actively engaging in discussions about artificial intelligence and its implications can provide valuable insights and foster a forward-thinking environment. Lastly, companies should foster a culture of transparent and constructive dialogue within your organization, encourage leaders and team members alike to address issues directly and bring concerns to the forefront in a mutually respectful manner. This approach clarifies expectations and enhances trust across all levels of the company, leading to more effective and dynamic team interactions.
In the subsequent session, esteemed Managing Directors from Michael Page's key regions—Greater China, Japan, Southeast Asia, and India—presented a comprehensive analysis of the market and talent trends shaping the Asia-Pacific landscape. They dissected the unique opportunities, challenges, and the intricate dance of talent supply and demand that define each market's distinct identity within the vibrant APAC ecosystem.
Rupert Forster, Senior Managing Director at Michael Page Greater China, provided an insightful overview of the market and talent dynamics in Hong Kong and Taiwan. He noted that during the second quarter of 2024, Hong Kong's economy recorded a robust year-on-year growth of 3.3%, with forecasts indicating a sustained upward trajectory for the remainder of the year. However, he cautioned that the looming shadows of global economic and geopolitical instabilities could introduce certain challenges. Amidst a surge in global trade, there is an anticipated uptick in Hong Kong's investment in transportation and logistics sectors. Conversely, shifts in consumer behavior have led to a contraction in the private consumption sector, with service exports also experiencing a standstill due to the tourism slump and a decrease in spending by mainland tourists. The retail sector, too, has witnessed a downturn in the first half of the year. In the asset management arena, technological innovation is luring new players such as fintech firms and traditional enterprises, compelling asset management firms to broaden their service offerings to encompass blockchain, digital services, ESG investments, alternative assets, and ETFs.
In this context, the recruitment landscape in Hong Kong has also undergone significant shifts. The interview process continues to be protracted, with recruitment managers exhibiting a discerning eye and a cutthroat competition for mid to senior-level roles, as companies are in pursuit of top-tier talent. The challenge of recruiting and retaining skilled professionals in Hong Kong is more pronounced than in other Asia-Pacific regions and on a global scale, with the talent shortage emerging as a critical issue for businesses in the area.
Furthermore, Hong Kong companies are actively strategizing to expand their footprint in the Greater Bay Area. Rupert revealed that 53% of Hong Kong businesses are eyeing development opportunities within the Greater Bay Area, with the primary investments originating from sectors such as Banking and Financial Services, Technology, FMCG, Healthcare and Life Sciences, Industrial & Manufacturing. This investment initiative in the Greater Bay Area marks a pivotal step for companies to tap into burgeoning innovation and technological prowess. Nevertheless, the potential adverse effects of geopolitical tensions and global economic uncertainties must not be disregarded and warrant vigilant attention.
Rupert also provided an insightful analysis of Taiwan's market trends, highlighting the nation's economy as it robustly emerges from a recent downturn. Anticipated to witness a GDP growth of 3.94% this year, this marks a significant leap of 2.66 percentage points from the previous year. This economic resurgence is largely attributed to the vigorous expansion in the export sector, particularly in goods and services. As the demand for cutting-edge technology applications surges, the export industry is poised to discover fresh avenues for growth. With a thriving job market, escalating wage scales, and local enterprises vigorously enhancing their advanced manufacturing capabilities, both consumer spending and investment are expected to remain buoyant.
Taiwan is diligently steering its development towards a future that is not only smarter but also more sustainable. This strategic move aims to bolster its solid foundation, thereby amplifying its global influence and market share. However, despite the job market's vibrancy fueled by the artificial intelligence boom, Taiwan grapples with the enduring issue of labor scarcity. The talent crunch in pivotal industries, notably within the IT sector—spanning software development to cybersecurity—is becoming increasingly pronounced.
The Taiwan Talent Trends 2024 report reveals that 48% of companies are encountering obstacles in attracting suitable candidates, while 40% are grappling with retaining their current workforce. Moreover, the proliferation of bilingual and multilingual roles is opening up a plethora of career opportunities for job seekers, simultaneously presenting novel challenges for corporate recruitment strategies. To sustain its economic growth and maintain its competitive edge in the market, Taiwan must adeptly navigate these challenges.
Toby Truscott, Managing Director at Michael Page Japan, observed that Japan's market and talent dynamics offer a constellation of distinctive opportunities and challenges. As Japan's economy flourishes, the quest for skilled professionals by businesses is escalating, wages are on the rise, and the competition for top talent is cutthroat. Companies are also navigating the demographic shifts by broadening their talent base to mitigate skill gaps.
In the business sphere, Japan stands out as a high-value market, characterized by a stable economic climate and a workforce renowned for its expertise. The IT and technology sectors, in particular, have seen swift growth, propelled by supportive government policies and corporate rivalry, creating a wealth of opportunities for both domestic and international firms and investors. Nonetheless, companies are contending with challenges such as escalating operational costs, cultural and linguistic barriers, and fierce market competition.
Regarding the talent landscape, the appetite for skilled professionals in Japan is on the ascent. However, issues like escalating wages, a dearth of suitable candidates, and the divergence between employer and employee expectations are becoming more pronounced.
The nation is grappling with an aging demographic and a shrinking birth rate, resulting in labor deficits in specific sectors. To tackle these hurdles, the Japanese government is proactively courting and retaining talent. Initiatives include the introduction of a "Special Highly Skilled Professional System" to draw in foreign expertise and policies that encourage an older workforce to remain active. Despite Japan's wage growth hitting a 31-year high in 2023, the real salary dipped by 1.8% when adjusted for inflation, underscoring the financial strain on the country as it endeavors to elevate salary standards.
Nilay Khandelwel, Managing Director at Michael Page Singapore and Indonesia, shed light on the dynamic market and talent trends shaping Southeast Asia.
Khandelwel highlighted the region's swift transformation, particularly in its allure for foreign direct investment (FDI). Singapore, with its compelling charm, dominates the region, garnering approximately 60% of the FDI, while Malaysia and Vietnam have also achieved record investment levels. The manufacturing sector's robust rebound, the digital economy's swift expansion, and the ongoing refinement of supply chains are the primary catalysts for this surge. ASEAN nations are progressively easing policy constraints, such as fully liberalizing foreign investment in sectors like insurance, renewable energy, and telecommunications, further invigorating investment enthusiasm. Concurrently, recently inked regional pacts, focusing on digital economy advancement, Industry 4.0 initiatives, investment climate streamlining, and the electric vehicle (EV) ecosystem development, have added fresh impetus to FDI.
The manufacturing, finance, wholesale and retail, and digital economy sectors have emerged as the primary recipients of FDI, capturing the majority of investment flows. The manufacturing industry has reached an unprecedented investment milestone of $62 billion, underscoring its robust recovery and resilience. The digital economy's growth trajectory is especially pronounced, with projections indicating that over the next decade, it could contribute approximately $1 trillion to ASEAN's GDP. By 2025, the digital economy's goods (GMV) in six ASEAN nations—Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam—is projected to skyrocket to $330 billion. This forecast underscores the sector's robust growth and vast potential in the region.
Moreover, Khandelwel noted that Southeast Asia's talent market is brimming with vitality, with its youthful workforce serving as a significant regional asset. The median age in the region is 32.2, signifying a substantial influx of young professionals into the workforce, thereby helping to mitigate labor costs. Various governments have introduced enticing incentives, such as Indonesia's "Golden Visa" program, to draw top-tier foreign talent. Nations like Malaysia, Singapore, and Thailand have also offered a suite of incentives, including tax breaks, long-term residency permits, and land ownership benefits, to lure foreign investors, professionals, and retirees.
Despite the abundant opportunities, the Southeast Asian market confronts certain challenges. For companies eyeing entry into the region, navigating and adhering to local labor laws presents a formidable hurdle. Employment regulations differ markedly among countries, encompassing minimum wages, working hours, leave policies, dismissal procedures, and employee benefits. Additionally, aligning talent shortages across nations and ensuring skill set compatibility is another challenge that enterprises must confront. Ultimately, to secure and retain top talent, offering competitive remuneration and benefits is essential, necessitating a deep dive into market compensation standards and employee salary expectations across various countries.
Nicolas Dumoulin, Senior Managing Director at Michael Page, cast a spotlight on the market trends and talent landscape in India. He noted that India's economic ascent has placed it firmly in the global economic limelight, with the International Monetary Fund recently recognizing it as one of the world's top five economies. This accolade is attributed to robust domestic demand and ongoing governmental reforms, which have endowed India with significant resilience amidst global economic turbulence. The Indian market is experiencing a transformative shift, evolving from a traditional back-office support role to a pioneering force in global innovation. Presently, India is home to over 1,700 Global Capability Centers (GCCs), a substantial increase from the 400-500 centers in 2015. These hubs not only enhance cost-efficiency but also act as catalysts for the global dissemination of innovation. Additionally, India's manufacturing sector has garnered considerable investment from multinational corporations, signaling its potential to emerge as a leading global high-tech manufacturing hub.
Regarding the talent market, India's youthful workforce offers a vast and cost-effective pool of talent for multinational enterprises. As India's global innovation standing continues to soar, the demand for high-tech skills is escalating, presenting unprecedented opportunities for the nation's talent market. However, companies may encounter recruitment challenges, such as discrepancies between employer expectations and actual working conditions, as well as a dearth of specialized professional skills. This necessitates that companies implement more nuanced and culturally attuned strategies in talent management and team building to align with India's distinct business and cultural milieu.
During the roundtable discussion session that followed the presentations, distinguished guests including Burnett Zhu, APAC TA Director of ZF Group, and Fan Xia, Global CFO of Sirio Pharma, engaged in a dialogue on crafting tailored talent strategies across the Asia-Pacific region and leveraging these strategies to fuel business expansion.
In the dynamic and uncertain economic landscape of the Asia-Pacific, companies are urged to embrace a more agile and prudent approach to talent management. Recognizing talent as a precious commodity, organizations are investing significant time and resources to identify top candidates. Burnett highlighted the challenge of attracting and retaining exceptional talent with limited resources, emphasizing the importance of background checks and leveraging existing resources. In the region's burgeoning economies, companies must offer competitive remuneration and a conducive work environment to draw in talent. Moreover, HR strategies must balance localization needs with the support and alignment from global or regional headquarters, ensuring that management has a deep understanding of local cultures and can effectively disseminate information, which is key to a successful talent strategy.
Burnett also noted that in the Asia-Pacific recruitment landscape, skills have become a paramount consideration. As cost reduction and efficiency become central to business strategies, companies are increasingly looking inward to fill positions, necessitating a drive to encourage skill enhancement and job rotation among employees. He also identified the challenge of recruiting and retaining key talent, observing a general scarcity of leaders with a blend of inclusivity, empathy, and entrepreneurial drive.
Fan Xia delved into the nuances of talent strategies for domestic versus foreign-funded companies in the Asia-Pacific. She observed that while domestic companies view the region as their primary arena, European and American companies consider it a secondary front. She noted the proximity of decision-making centers for domestic companies and the advantages of shared culture and language in facilitating smoother communications. In talent acquisition, foreign-funded companies prioritize execution and communication skills, whereas domestic companies place a higher value on entrepreneurial spirit. However, with the localization of foreign entities and the internationalization of domestic ones, the talent requirements of both are converging.
Fan Xia also offered insights on leadership and talent management, advocating for companies to conduct thorough talent and organizational capability assessments when entering new markets, alongside market research. She emphasized the need for cross-cultural management skills in talent management, given the diverse cultural tapestry of the Asia-Pacific.
The event drew nearly a hundred business and HR leaders, creating a vibrant atmosphere replete with engaged questions from the audience. Post-event, attendees enjoyed extensive networking opportunities. Moving forward, Michael Page is committed to further enhancing its market insights, actively monitoring and analyzing market trends, and empowering corporate clients and candidates with profound market intelligence and knowledge sharing.
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