Treasury Today Country Profiles in association with Citi

Conquering talent challenges in Asia

Young man climbing a limestone wall

Across Asia, with its diverse cultures, market growth and priorities, the successful recruitment and retention of talented and appropriately experienced treasury professionals continues to be a priority and a challenge.

Scarce treasury talent with the right specific treasury skills and knowledge in addition to multi-country experience is an issue for organisations operating in the East, says Marie-Astrid Dubois, Assistant Treasurer, EMEA and Asia at Honeywell. “While highly qualified professionals can be found in financial centres such as Singapore and Hong Kong and some relief is provided by returning students or migrations from Western countries to Asian countries, the talent pool is proving too small for the large corporations and domestic firms to fish from.”

An unique landscape

The disparity across the various countries that make up the Asian continent exacerbates this challenge. This fragmentation of culture and conflicting stages of development across the Asian landscape can have a negative impact on employee engagement – for existing staff and talent that a company is trying to attract. The skills and requirements of individuals from different countries is difficult to discern, says Joseph Lee, Treasury Director, Asia Pacific Japan and Africa at Hewlett-Packard (HP), so it’s important not to rely on a one-size-fits-all retention programme in Asia. “In Singapore, for example, it would be easier to retain staff with a programme that allows them to work at home, as a work/life balance is a priority in this country. Emerging economies like Indonesia, on the other hand, are likely to have staff attracted by high pay scales than any other incentive.”

A generic approach to talent management in the region could therefore prove rather futile. What is effective for a company based or headquartered in Asia would likely be considerably different to a Western-based multinational. So attracting and retaining talent may need a different approach, according to Sharon Miles, Director at Spencer Stuart, and treasury talent is no different. “The risks, challenges and opportunities in global markets and Asia in particular, over recent years mean that corporates and their boards are revising and analysing their treasury agenda and their hiring strategies. They are determining what the most appropriate solution for their own circumstances is – particularly one that is effective across all jurisdictions in the region.”

Another obvious trend and challenge when it comes to hiring and retaining talent is the fierce competition between multinational companies (MNCs) and domestic firms. Fishing from the same pool of resources, MNCs and local organisations are striving to make their available roles and company more attractive and high potential candidates are in the advantageous position of choosing a suitable role after weighing up the pros and cons of each offer. The MNCs will likely win out in this battle, according to Lee, as they are capable of offering roles based on individual skills, plus the ability to cross various breadths of functions is much higher for career-minded staff within a multinational firm. “If we look at the graduate recruitment exercises that typically occur in many countries across Asia, MNCs have a higher success rate at recruiting the top 10% of graduating cohort from prestigious schools than domestic firms.”

“That is testament to the lure of an MNC over a domestic company. Domestic companies usually compete for the next level in the resource pool and this is proving quite a challenge for these firms looking to attract the best talent.”

Adding to the concern of these local corporates is the increasing inclination for MNCs to hire from the region itself, rather than bring expat talent into Asia (Dubois’ entire Asian team is recruited locally for example). Furthermore, from the perspective of ambitious talent facing this choice, experience gained in a global corporation can prove invaluable when interested in climbing the career ladder, says Miles. “While talent is always a high priority, extremely high value is placed on experience and especially experience gained in blue chip environments.”

Yet local Asian businesses have not given up the fight, and those with a regional focus are increasingly identifying both internal and external talent, as well as becoming more sophisticated in how they assess and develop their talent. This drive and activity may go some way to explaining such a high staff turnover within Asia: loyalty is lost as talent look for the best way to further themselves professionally.

Management strategies

Whatever the decision, employees need to see that the organisation they migrate to, and stay with, has a transparent plan in place that allows them to develop as individuals with the potential to fill important roles within the organisation. Many organisations have programmes that are part of their recruitment and retention agenda; however, how effective each initiative is depends, not only on the sophistication of the company, but also on the corporate’s ability to understand how to draw talent out. During times of crisis – such as the current economic uncertainty – these schemes can come under pressure, says Miles. “Nevertheless, the challenge remains to provide high potential and talented executives with both the breadth and depth of experience in their development, balancing the need for progress and advancement with gaining sufficient depth and traction to consolidate their experiences along the way.

“Companies who do this well do so during all stages of the cycle, consistently through the boom and the down times – monitoring, assessing, tracking, rotating, developing talent and understanding what local talent values and needs and promoting from within.”

However, with candidates typically subjected to a very rigid initial hiring process in order for the company to identify talent, it may be sometimes difficult to determine the success of the talent programme itself. Nevertheless, it is the consistent and continuing efforts from management level that will allow the candidate the best chance of fulfilling their potential, according to Lee, who speaks of his experience with British American Tobacco. Lee held the position of Regional Treasury Manager, Asia Pacific from 2001-08 and Shell Treasury Manager Downstream East from 2008-12. “Senior management, along with HR, would identify high potential individuals and plan next roles for shortlisted persons as part of their development. This short to medium-term plan allows the individuals to understand how they will be progressed within the organisation and what they need to do to get to the next level. This stage is actually very critical – the ability to assess each individual’s contribution and ensure management follow-through of the development plan,” says Lee.

Elsewhere, Honeywell employs recruitment and talent programmes in all of its subsidiaries globally, and Dubois acknowledges that the retention issue is more visible in emerging countries than in the Western world. “We are very involved in talent discussions and evaluations, high potential training and retention programmes. I would also stress the notion of regional or sub-regional teams to create critical talent mass. Sharing best practises, discussing issues to create a knowledge pool and feeling part of a team makes a huge difference.”

A global perspective, the necessary depth of experience and sufficient exposure across the full breadth of the treasury portfolio are all essential in moulding a fully rounded treasurer with the necessary leadership credentials that are crucial when considered as part of a succession programme. But, according to Miles, “the trend to consolidate and control the treasury function from the corporate centre, driven from both a risk management and an efficiency point of view, challenges the ability to develop treasury talent and capability within the broader organisation and across the region. Opportunities to gain the necessary experience can often only be available within the corporate centre or by moving to another organisation.”

Strengthening the pipeline

Nevertheless, forward thinking companies that employ a management strategy well have a reasonable concept of what talent looks like and will be anxious to establish clear and visible leadership responsibility across the business to facilitate succession planning. Organisations are becoming more sophisticated in how they assess and develop the talent, and are introducing more disciplined structures, processes and systems to manage their talent.

With localisation targets ever popular, rotational programmes are very much de rigueur as high potential employees are groomed for future executive positions – minimising the requirement to hire expatriates. An advocate of local recruitment herself, Dubois puts a lot of effort into cross-regional training for her staff, encourages talent discussions at the regional level and provides maximum exposure for the high potentials (so called ‘high touch’), enabling regular contact between the employee concerned and C-level executives. “Also of huge importance is a close working relationship with HR, which helps me focus and adjust talent strategies accordingly. We then organise performance assessments twice a year that allow us to properly track progress and adapt training. Competitive compensation also helps with retention, of course.”

Yet it can be difficult to retain talent if, after years of investment and development, the senior roles are not opening up or decisions are taken to recruit externally. Sometimes the only way for frustrated talent to make the transition into a core treasury position is to leave the organisation altogether.

There is no simple solution to ensuring smooth succession, says Miles. “It takes time, attention and commitment to a culture that continuously fosters and delivers talent development, mobility and promotion. Understanding what the talent in Asia needs and values is important.”

But there are occasions when these roles do open up, and when they do, it’s imperative that a qualified candidate is willing and able to fill that position. In this succession planning, management involvement and commitment to the process is one key success factor, according to HP’s Lee. “The identification of high potential candidates, coaching, mentoring activities all involve management time and effort. It cannot be delegated downwards or left to the HR function to manage.”

“When we identify candidates who will be taking over the role of the current employees in a certain number of years, it is sometimes questionable as to whether the chosen candidates will be trained sufficiently for the role when the time comes. This would take a huge amount of commitment that not all companies are always ready for,” he adds.

Ultimately, gaining appropriate exposure and experience across the strategic, operational and leadership dimensions is key to ensuring there is a pipeline of well-rounded, experienced talent in the business, says Miles. “For treasury executives this includes understanding the business well and gaining sufficient exposure across the treasury portfolio and the various instruments, networks, relationships and transactions is important.

“Successfully leveraging experience from within the global business where this is available, to develop local talent, needs to be tempered with an appreciation of what is important for the local talent pool.”

Team spirit

But not every high potential case is a success. Some may not live up to the standards initially set for them and others may possibly decide to opt out of the talent programme altogether. Meanwhile, there are staff members who are quietly working away delivering value for shareholders: these employees also have development requirements, according to Lee. “Although high potential candidates will have more opportunities than their peers for career programmes offered by their company on account of the limited resources available, the development and aspirational needs of employees who are not identified as high potential within the company should not be neglected. They contribute to shareholder value as well.”

Lee cites a very effective scheme that was employed in one of the companies he worked for. This company segregated the staff into three buckets: the lowest bucket (10% of all employees) that the top line wanted to manage out; the top bucket (10%) which was considered to be high potential; and the bulk core bucket that would hold 80% of employees. “The bulk core bucket contains people that contribute value at their individual levels. We call them the achievers – these people achieve the results for the company but are not identified in the high potential silo,” says Lee.

“The trend to consolidate and control the treasury function from the corporate centre, driven from both a risk management and an efficiency point of view, challenges the ability to develop treasury talent and capability within the broader organisation and across the region.”

Sharon Miles, Director at Spencer Stuart

Although HR and senior management do not look at these ‘achievers’ as closely as they would the top 10%, it is up to management nonetheless to provide training and motivation such that these core business contributors feel that they are involved in development strategies and are important in achieving the company goals. In fact, some of these mid-level employees actually turn out to be high potential talent when encouraged appropriately. Says Lee: “It is therefore very important that management continue to develop these people so that they can realise their potential. Likewise, the employees that are not in the top talent bracket must ensure that they continuously review their career plans and aspirations. They should then make themselves and their requirements visible to the managers.”

Every team has a mix of talents and it is important to ensure that every employee feels that they have an essential role to play in order to distinguish their company as a winning team, agrees Honeywell’s Dubois. “I try to develop each and every member of staff to their full potential so that everyone feels that they contribute towards the value of the team. I want everyone to be proud of what they have achieved. I do not believe in concentrating on one special ‘talent’ – everyone has his or her part to play.

“Yet competition for talent is there and we need to be mindful of that – especially with the current economic climate as a backdrop. But the important thing is to understand the people you have on your team, have a genuine interest in their development and what they want and encourage them to bring the most they can.”

While investment in talent for the future is vital, success is invariably dependent on the entire team. Focusing solely on a few high potentials and neglecting your asset base of capable, loyal, committed and reliable people may prove a costly strategy in the longer term, advises Spencer Stuart’s Miles.

“As the Asian economies continue to grow and the associated demand for experience and skill increases, companies that do not pay attention to developing and supporting their people will find this will come at a cost,” she concludes.