WInning the Race for Talent in Emerging Markets

New research shows how to attract and retain the best employees in developing economies.

by

and

Jay A. Conger

by

and

Jay A. Conger

From the Magazine (November 2008)

Summary.

Reprint: R0811C

“This war for talent is like nothing we’ve ever seen before,” write the authors, who have spent decades studying talent management and leadership development. Recently they interviewed executives at more than 20 global companies to identify strategies for attracting talent in developing economies—where, they learned, brand, opportunity, purpose, and culture play out in particular ways. A desirable brand affiliation in conjunction with inspirational leadership appeals to eager young high potentials suddenly awash in possibilities. Opportunity should imply an accelerated career track—or at least a fast-paced acquisition of skills and experience. Purpose ought to benefit a job candidate’s home country and express the value of global citizenship. A company’s culture should be meritocratic, value both individual and team accomplishments, and follow through on promises implied in recruitment.

Lenovo, TCS Iberoamerica, Standard Chartered Bank, and HCL Technologies have all made a concerted effort to keep those promises. Lenovo, for example, very methodically provides development opportunities for its high potentials, with career maps that are linked to key slots across the globe. TCS puts Brazilian and Uruguayan leaders who are well connected and admired in their communities in charge of local operations. SCB lives up to its values by investing in renewable-energy businesses and supporting local communities through microfinance programs. HCL has empowered its employees with a revamped intranet that allows them to report problems with services and processes or ask the CEO direct questions.

The authors claim that emerging markets pose special challenges for foreign multinationals. For instance, talent strategies that work at home will probably need extensive tailoring to succeed in the developing world, and an overreliance on fluency in English may impede spotting talent. It’s critical to develop a core of local talent and to embrace and leverage diversity.

In the talent race, a local company that creates genuine opportunities and exhibits the desired cultural conditions will often win out over a Western multinational offering higher pay.

The Idea in Brief

What motivates a Uruguayan software engineer to work for an Indian company in Brazil? If you don’t know, you risk losing the race for talent in emerging markets. These new markets are growing so fast, even established global players aren’t recruiting and retaining enough employees.

How to win this contest? Ready, Hill, and Conger suggest two strategies:

Attract talent bymaking compelling promises. Center these promises on your company’s brand (does it have a reputation for excellence that may lead to personal advancement?), opportunity (will you provide challenging work, training, and competitive pay?), and purpose (does your company have a mission and values meaningful to potential new hires?).

Retain talent bykeeping your promises. Craft a culture characterized by authenticity, a merit-centered reward system, and accelerated professional development for even the lowest-level employees.

By applying these strategies, Standard Chartered Bank reduced attrition rates in its China operations by 3% over 2007–2008—while rivals suffered a dramatic increase in attrition.

The Idea in Practice

Attract Talent by Making Compelling Promises

Make promises about your company’s brand, opportunity, and purpose that appeal to employees in developing nations. Example:

TCS Iberoamerica (a unit of Tata Consultancy Services) provides software and technology services to clients in Latin America, Spain, and Portugal, while also contributing to other TCS endeavors worldwide.

The Tata brand stands for technical excellence. So, when expanding into Brazil and Uruguay, TCS Iberoamerica hired local engineers (not salespeople) and sent them to India to observe its core strengths and standards. They returned home energized and eager to recruit their compatriots.

The company also promised opportunity. For instance, it hired local Brazilian and Uruguayan leaders who were admired in the community to head up operations—not Indian expatriates.

Finally, Tata offered an exciting purpose—including making a $2,000 car that would open up the industry to low-income consumers.

Retain Talent by Keeping Your Promises

It’s tempting to overpromise just to get new hires in the door. But failure to deliver on those promises will sour current employees on the company and ultimately hurt its appeal for potential new hires. Keeping your promises is especially crucial in emerging markets where employees can easily move to global or local companies that seem to offer greater overall rewards.

Your company’s culture plays a central role in keeping promises and retaining talent. Example:

At Standard Chartered Bank’s China operation, many new employees are “raw talent”—they have great potential, but lack experience. To back up its promises, the bank pays careful attention to its culture:

Induction. SCB offers an intensive induction program that teaches raw-talent hires about the ethical management of financial services, including money-laundering prevention.

Technical training. Relationship managers in SCB’s wholesale business must complete a five-day “boot camp” and pass a strict exam before they’re exposed to customers.

Professional and management development. Raw recruits get intensive training in the English language, communication and listening skills, and business etiquette. They also receive career guidance and access to networking sessions.

Stretch assignments and deployment. SCB’s recruiting slogan “Go places” tells people that if they do well, they’ll move ahead in their careers. And talented Chinese employees are often moved elsewhere, including to the group head office in London.

With economic activity in emerging markets growing at compounded rates of around 40%—as compared with 2% to 5% in the West and Japan—it’s little wonder that many companies are pegging their prospects for growth to Brazil, Russia, India, and China (BRIC) and, increasingly, other developing nations. Businesses based all over the globe are feverishly competing for people who, often for the first time in their lives, have numerous options and high expectations. Not even companies with established global experience can coast on past success in meeting their staffing needs.

A version of this article appeared in the November 2008 issue of Harvard Business Review.

Douglas A. Ready is a senior lecturer at MIT’s Sloan School of Management and the founder and president of ICEDR.
Linda A. Hill is the Wallace Brett Donham Professor of Business Administration and faculty chair of the Leadership Initiativeat Harvard Business School, the author of Becoming a Manager, and a coauthor of Being the Boss and Collective Genius.
JC

Jay A. Conger is the Henry R. Kravis Research Professor in Leadership Studies at Claremont McKenna College. He is the co-author of the book, The High Potential’s Advantage: Get Noticed, Impress Your Bosses, and Become a Top Leader (HBR Press, 2018).

WInning the Race for Talent in Emerging Markets

The Idea in Brief

Attract Talent by Making Compelling Promises

Retain Talent by Keeping Your Promises

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