Firms in Asia-Pacific are finding it increasingly difficult to attract and retain a talented workforce. But how much can the right culture, remuneration and business continuity planning help mitigate this risk?
Human capital issues abound in Asia. A region-wide fight for talent combined with an ageing population and shortage of skilled workers to make people risk a top concern for risk professionals.
Singapore-based risk manager Roland Teo says he is not at all surprised that Asia-Pacific risk managers chose ‘attracting and retaining a talented workforce’ as one of their top concerns for operating in the region. “You can have the best machines, the best methods (policy and processes) and materials (resources), but when you do not have the best manpower (right people in place) it is the biggest risk,” he says.
Teo points out that in highly specialised sectors like healthcare, the demand for highly trained professionals like doctors, nurses and allied health workers is high but supply is extremely scarce. “Even after they are on board you have to ensure that they are not unduly stretched, which may result in the compromise of patient safety and care,” he says. “We need to ensure that the entire eco-system is there to support and have long-term strategies.”
Remuneration is obviously a big factor in retaining talented people but another pressing issue is how well managers are managing their staff. Are they creating career paths? Are they delivering useful feedback? Are they providing staff with a sense of purpose in the company? Organisations that are very good at engaging their employees, through performance management and clear discussions around career paths and opportunities, are on the right track; those that aren’t tend to experience higher turnover ratios.
‘Era of transition’
Myanmar Brewery head of risk management, processes and internal controls Jagath Guru says that the region’s people risk is compounded by a “generational problem”. “Where the workforce is concerned, we are at the era of transition between Generation X and the new Generation Y, who tend to get bored easily with the monotonous function after working for a short stint and thereafter are always looking out for a better work role, different environment and better perks,” he argues.
“The phenomenon now is that even if we are able to substitute the ageing workforce, there is a very high probability that these new substitutes may not remain for long, particularly with the emergence of the pulling factor of new competitors in the market who potentially seek the shortest route to market by engaging in the increased activities of pinching and poaching their competitors’ employees by offering them better perks. Hence, this calls for a succession-planning program being put in place and ensuring business continuity.”
For Yum! Brands in China, managing people risk is all about prevention. The firm’s risk and insurance manager Richard Zhang says: “We’ve worked hard to develop a unique company culture to make sure [Yum! Brands] has an attractive company culture and our employees like to stay and work here. This company’s culture is unique because we’re an American-based company but [the culture] is mixed with western style and Chinese culture. So people can very easily fit into the environment and also have an advantage to touch base with a different culture, which is a great advantage.”
Team building activities and company-wide initiatives help to engender a positive work environment, Zhang says. “People are recognised, rewarded and thanked for their help or work. It really lets people feel that they belong to the team and their work has been recognised,” he explains. Another mitigation strategy has been changing Yum! Brands staff directory and keeping the details confidential. “This is because staff were frequently being called by recruiters and rival firms, who had easy and direct access to the individuals they were looking to poach,” Zhang adds.
Drain on profitability
Companies are limited in what they can do to deal with poaching, according to Teo. “This is an economic policy and structural issue that industry leaders, representatives of employees and employers, and the government have to work on,” he says. “I think firms and industry leaders should be taking the lead to engage the industry and government with holistic solutions. Some of these can be addressed through education or training, deployment and productivity.”
Workforce issues relating to business expansion can also result in a massive drain on the ongoing profitability of a business. MTR China and international business safety manager Vincent Ho says that, as businesses go global, “many operations start to see their workplace expand into unknown territories and also in areas where skilful labour is a scarce resource”. “People risk can significantly affect the quality standard of a company and cause immediate effect on the bottom line,” he says.
Human capital issues can strike at the heart of risk management itself. PARIMA chairman Franck Baron says that the region “deserves to have a strong community of risk managers”. “[However], when it comes to skills, experience, know-how and knowledge, there is still a lot to do to ensure that our workforce in Asia is up to speed,” he says.