Despite HR functions increasingly focusing on developing leaders in their companies worldwide, looks like room for improvement still exists in the Asia Pacific region.
Mercer’s Leadership Practices Study found only 15% of businesses in Asia Pacific are identifying who is ready for the next move or position within their leadership pipeline.
This was 5% lower when compared to firms in Latin America, which was leading the way among the 1,000 companies studied across Asia Pacific, Latin America and the Middle East, on overall development of leaders in the organisation.
Nearly three-quarters of organisations in the region had a defined leadership development strategy – significantly higher than companies in Asia Pacific and the Middle East.
On a global level, it was found that companies are spending less on training and developing middle level and frontline leaders, than they do on global or senior level leaders, annually per person.
Fewer than 20% of companies in the Middle East and Latin America said they are spending US$ 5,000 or more per person each year to develop their youngest future leaders.
In Asia Pacific, the under-investment was even starker, with just 5% of companies achieving this level of spend for for individuals at the earliest stage of the pipeline.
The report also identified a leader's ability to 'create strategy' as one of the most critical competencies for their success - another area where firms in the Asia Pacific are not doing enough.
Additionally, companies in Asia Pacific were found to continue to rely on expatriates, rather than local talent, for top leadership roles, further calling into question the effectiveness of leadership development and localisation strategies.
Kate Bravery, Mercer's growth markets leadership and organisational performance practice leader affirmed that a more strategic approach is required to nurture the pipeline of leaders in the region.
“This starts by translating core business objectives into a leadership strategy that defines the talent pool, competencies and the tactics required to build leaders from within," she explained.
"It continues with an execution plan that helps businesses identify, develop and accelerate the critical talent moves that will help them achieve real competitive advantage."