Have you thought about your talents?

EY: Rising talent management challenges for rapid growth market multinationals

Management Written by Natalie Khoo of theedgemalaysia.com Tuesday, 10 July 2012 15:08

KUALA LUMPUR (July 10): Emerging market multinationals are struggling to build effective international management teams as they grapple with a variety of factors, according to a new survey by Ernst & Young (EY).

A new E&Y survey entitled Growing Pains: Companies in Rapid Growth Markets Face Talent Challenges as They Expand released on Tuesday found the reasons of struggle to build effective international management teams were mainly due to cultural differences, conflicting internal perceptions of talent management, difficulties in balancing global and local talent, and a lack of a reliable leadership pipeline.

According to the survey conducted, only one in five (20%) believed their company managed talent effectively across all markets indicating their lack of confidence in building an effective international management team.

Less than a third of respondents polled (28%) agreed that their top management team has an international outlook on decision making and the same number say their top management team has sufficient work experience outside of their home country.

An awareness of local culture (51% say this is where top management needs more insight) and an understanding of global markets of only 50% contribute to the two main knowledge gaps in top management teams.

In addition to that, only one in five (18%) say their company achieves the right balance between local talent and expatriate managers in international markets.

“The key challenge for new growing companies building and executing effective talent management strategies in the next decade will be to integrate talent strategies with global mobility strategies to form a top management team that has a mix of international expertise and local knowledge,” says Mike Cullen, EY global managing partner (people).

“Internationalising through a global/local approach to talent management, demonstration of top managers to show that they can get the best out of their teams through sensitivity to local markets, making everyone feel valued, and being adept at harnessing diverse opinions to produce a better result for customers and for clients are some of the keys to ensuring companies stick together as they expand to new markets,” adds Cullen.

EY global talent management market leader Bill Lesly said that the most significant event in human capital in the past three to five years was not only increasing importance to the development and execution of an organization’s business strategy, but it has become a unique competitive advantage.

Other key management challenges revealed in the survey include a lack of an internal management pipeline which requires time and management forces companies to recruit from rivals although the latter can result in high turnover and salary inflation.

Only 20% believe their companies do an effective job of evaluating and rewarding high performance across different markets and only 23% think their company is good at retaining key global talent.

A strong gap of different views can be seen strongly where C-suite respondents give a low priority to recruiting locally from new international markets, compared with managers (16% as opposed to 33%).

And compared with managers, C-level respondents have a much lower opinion of their companies’ effectiveness in rewarding high performance across different markets (19% versus. 26%) and aligning business strategies with an individual’s performance objectives (13% versus 25%).

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