Managing talent is a topic on every CEO’s agenda in Asia. Acute anxiety around talent in Asian markets is ironic because this region hosts 40 to 50% of the world’s workforce. Theoretically, there should be plenty of talent to go around.

Evidence on the ground suggests that companies attempting to answer the “how to solve the talent shortage” is not working. Geographies like India and China report 25 to 30% salary hikes, yet face 18 to 50% turnover.

The talent management problem in Asia Pacific requires a fresh approach. Smart companies are tackling the challenge in innovative ways. While they offer six to 10% lower salary increases, their turnover rate is lower than industry averages.
What are they doing right? We believe there is a clear pattern to the successful talent management practices in evidence today.

Focus on capability building

Firstly, smart companies don’t focus on solving the problem of “shortage”, which leads them to the treadmill of irresponsible compensation. Instead, they reframe the question. Rather than addressing the talent shortage, they focus their efforts to redress the capability deficit. They make sure that the right knowledge, skills and behaviours are brought to bear against the specific needs of the jobs, the work and the business.

Instead of throwing money at anyone with an attractive resume, smart companies learn to say no to those who hop jobs for more money. They turn their attention to gauging fit and put their money to develop a talent pool with the desired knowledge, skills and behaviours that are needed for a successful business.

A pioneer in this space has shifted its emphasis to “talent spotting” as the key to building capability. To increase its scalability, this company decided it would have to be more diverse in the intellectual, social and cultural dimensions of its workforce. It has actively built a pipeline of talent from different sources and offers accelerated learning programs to help address capability deficits.

A systemic view on talent

Smart companies recognise that talent management is not just about sourcing or compensation. They realise that there cannot be one sustainable solution to multidimensional problems.

Effective selection and deployment processes make investments in creative sourcing go a much longer way. Similarly, innovative compensation programs are much more effective when paired with strategy-appropriate performance management and far-sighted enabling interventions in learning and knowledge management. And paradoxically, nothing is more critical for creating a performance culture than ensuring a fair and equitable exit process.

Smart companies realise that the competition can quickly copy bits and pieces of their talent management processes, such as similar compensation programmes, but that it is almost impossible for a competitor to easily replicate an entire talent management system. Instead, they evolve sustainable and competitively defensible solutions to today’s serious talent management challenges by addressing all elements of the talent management system in a cohesive way. A smart company is very successful in holding on to its talent advantage even when it offers lower salaries, because it has built a talent management system that is based on not one, but hundreds of innovations in hiring, transitioning and transforming its talent.

What works for others

Finally, smart Asian companies are quick to realise that it’s not enough to copy other people’s answers and solutions to talent problems. In hypergrowth markets of Asia today, where companies reinvent themselves overnight, every company’s talent management needs are different. Smart companies see talent management not as an art but as a science. And it demands evidence-based management practices, employing data systematically to learn from past successes and failures, while also conducting forward-looking experiments to find out what types of talent management interventions can make a difference. Sustained success comes to companies that commit to this science of human capital. It pays to discover what works when it comes to today’s talent challenge.