Anyone who has run a business in the traditional emerging markets (often categorised as the BRICs – Brazil, India, Russia and China) will know managing talent is one of the hardest things to get right: turnover is high, labour costs are rising and technical and management skills are in short supply.
For managers with responsibilities in these markets there have been relatively limited options available to address some of these challenges. For example, I once worked with an IT director who told me he’d just appointed a new chief information officer (CIO) to cover IT operations based in Vladivostok in Russia. Despite a CIO normally being a global role and one which would traditionally have been the director's boss, the IT director explained that the inducement of the job title had been the only way he could get the junior IT manager to work for him out there.
But there’s only so much that job title inflation can do - and that wages can continue to increase by over 10% a year, so at EY we have been looking at a more targeted approach.
Money isn't everything
We recently surveyed over 1,000 individuals from across the BRIC economies, who were classified as having ‘scarce skills’ or who were in ‘high-potential roles’, to see if we could identify what was driving their desire to remain with their company, or indeed to get hired in the first place. While every individual, city and country will ultimately have different needs, the survey did identify a number of interesting trends. Some of the key insights are below.
- A secure and steady income was ranked as the most desirable feature of a compensation package in Russia, while stock options (or equity-based compensation) were ranked first in China.
- Among the ‘in-demand’ professional groups surveyed, we found IT professionals have a higher preference than engineers for flexible work arrangements.
- Professionals in all four BRIC countries ranked work-life balance as their top career goal and international assignments as their lowest, with ‘in-demand’ employees keen to take advantage of exciting developments in their own countries.
The survey showed there isn’t a single common ‘need’ across all countries - as well as that throwing money at the problem is also not the answer. The response from companies has to be as varied as the countries in which a business operates.
Keep it simple
When faced with the necessity of providing different remuneration and reward packages for each country and workforce group, many companies may become concerned by the costs and time involved, particularly for a large multinational company. But we found that actually keeping it simple, and focusing on the non-cash rewards, can make a huge difference.
For example some of the messaging used in recruitment campaigns simply has to change. In Brazil and India, greater emphasis on corporate social responsibility, which is an important element of a global employer brand, can be really impactful. In addition, in Russia, India and Brazil, focussing on the financial strength of the firm also carries more clout. And in China, highlighting the prestige of an organisation is seen as important.
Even when looking at cash pay, some features of compensation and benefits packages can have a greater influence than others on the attraction and retention of key talent in emerging markets. What matters is your reputation as an employer for delivering the below:
- As a group, ‘in-demand’ talent is most concerned about current steady incomes and future earning potential. This is also the area of greatest disparity between what is desired and what respondents feel their employers provide.
- Clarity about future career paths and the associated earnings matters more than a competitive base salary today (noting the point about steady incomes above).
It ain’t what you do, it’s the way that you say it
Based on the research, we found that in the BRICs some organisations would benefit from greater investment in communicating with their employees about what they value, and doing that consistently. One organisation in a developing market told us that they had recently invested in communicating their corporate social responsibility efforts to powerful effect. They knew many staff lived in similar areas around their branches and so they set up a car sharing pool website and promoted it heavily. Take-up was strong and employee engagement scores and retention rates went up. As we see so often in life, it seems that the key is creativity over cash every time.
- Simon Constance is EY’s human capital director