The risk and human resources functions of Asia’s corporations need to become more ‘integrated and connected’ if they are to meet the challenges of today’s business environment, the head of Deloitte’s South East Asia human capital consulting practice tells StrategicRISK
Nicky Wakefield is a trained economist with an MBA in organisational strategy and change, as well as what she describes as a “passion for human performance”.
It’s a useful combination for the leader of Deloitte’s South East Asia human capital consulting practice, and it also mirrors the mix of expertise and experience that modern-day business leaders require.
As Wakefield puts it, the most significant aspect of business performance from a risk perspective is leadership.
“Almost every client that we operate with across the globe has leadership as a critical focus area” she says.
“Not just the top focus area for HR, but also the top of the list for business leaders – and I believe it’s also sitting at the top for risk leaders these days.”
Wakefield says that risk and HR need to be more closely aligned for a number of reasons.
“One is that core business risk these days is often people centric. Whether it’s acquiring the right set of skills, training that talent, getting people in the right roles and locations for business needs, or – the most important – being able to find and keep talented leaders,” she says.
“Then there’s the other side of people risk, which is the risk that people create such as financial crime or poor risk culture inside an organisation.
“Often organisations focus very heavily on processes and systems but, as we well know, what operates those processes and systems is people.”
Speaking to SR about Deloitte’s 2014 Global Human Capital Trends survey, Wakefield makes it clear that she believes that firms need to have a deeper understanding of their workforce requirements.
“Whether it be specialised skills in particular markets that are very hard to acquire, or the retention of this talent, I think it’s that whole sense of starting at leadership and then moving further into the risks of acquisition and retention of core skills inside an organisation,” she says.
The Deloitte survey represents the views of more than 2500 business and HR executives in 90 countries, who answered a wide range of questions about their human capital challenges, capabilities and key priorities.
More than 50 of these respondents were from Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
Around three quarters of South East Asian respondents state that leadership development within organisations is most important to meet the challenges of today’s business environment.
However, only 38 percent feel that they are ‘high in readiness’ in terms of the leadership roles in their company.
“Finding good leaders has always been a critical issue for all organisations,” Wakefield explains.
“But 21st-century leadership is different and there are some unique nuances for South East Asia.”
The presence of several emerging markets, the prevalence of a young and ambitious workforce, evolving regulation and significant generational differences is making it difficult to find, develop, deploy and retain leaders in this region, Wakefield says.
“The whole talent challenge is really coming to fruition, and the talent crisis in Asia is really obvious to me,” she says.
“There are so many people in the region, but not enough people with the skills and capabilities, particularly at the leadership level.
“Also, due to cost pressures and intense competition for talent, many companies are struggling to retain and develop an adequate leadership pipeline with the critical capabilities and skills required to succeed in the future.”
Reskilling of the HR function stands out in the region as almost equally important as leadership, but only 30 percent of South East Asia respondents feel that their HR function is ready to meet the challenges of today’s business world.
“There is a lot of attention and investment being focussed on the HR function, particularly moving it to be more strategic and taking on more of an advisory role at the board and executive level – and a lot of that is around people risk,” Wakefield says.
“So we’ve had the decades where the CFO was number two to the CEO, and now I think we’re moving into the decades where the CHRO will take on a bigger position inside an exec team and on a board.
“From a risk perspective, the really interesting thing is how many of the current CHROs are actually ready to take on those more strategic roles.”
Wakefield says she is seeing organisations placing people who have non-HR backgrounds into CHRO roles and then surrounding them with specialised HR professionals.
“HR really needs to step into this role and help business leaders understand that mobility, development, coaching and leadership are, particularly for young people, is incredibly important,” she says.
“If they [employees] don’t get those opportunities inside an organisation they’ll go somewhere else.”
Another top concern among organisations in South East Asia is in the area of building workforce capability.
“This region is characterised by the prevalence of a younger workforce, creating a highly competitive labour market for skilled people,” Wakefield explains.
“The expectations of this emerging workforce are also changing, encompassing a more diverse and more holistic definition of ‘reward’.
“There is an increasing expectation of doing meaningful work, and more focus on the working environment, workforce flexibility and corporate culture.
“These non-monetary and intangible considerations will play an increasingly important role in employee engagement and retention.”
Developing leaders and functional experts can take several years and cannot be achieved by focusing solely on short-term training, Wakefield says. The objective should be in building a ‘supply chain of skills’, spotting technical and leadership gaps before they appear, and developing people over time to deepen their skills where needed.
“What is at the centre of that is learning, development and education, and to a large extent mobility,” Wakefield explains.
Organisations need to make themselves attractive to talent, particularly to young talent, she adds.
“Some of things that are most important to being a talent magnet is that people can see career progression possibility,” Wakefield says.
“So from day one they want to be able to see were they may go next, and they want to be able to move across a lattice rather than just a ladder, they want to be able to move across an organisation.