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HR Leaders Forum and Awards

Dubai, March 05 & 06, 2012

Global Growth Strategies:
Winning the race for talent in emerging markets

(facilitated by Celine Heinrich)

Copyright © 2005 Deloitte Development LLC. All rights reserved. 0

Global Growth Strategies:
Winning the race for talent in emerging
markets

1. Anticipating and proactively working with Business Leaders
to support & accelerate Growth in Emerging Markets

2. Expanding your understanding of Emerging Markets &
developing Talent Management Strategies

3. Importance of HR’s active participation & involvement in
market entry and expansion

DUFRY PROCESS AND PROCEDURES WORKSHOP

Part 1;

Anticipating and proactively working with
Business Leaders to support & accelerate
Growth in Emerging Markets

Role of the Business Leader is Essential

Evolving role of “Management”:

• From jobs, to skills and outcomes – rethinking the nature of work, adapt to the local and cultural
environment

• Implement ―Best Places to Work‖ highly correlated to management practices

 P&L management or P&L-like work
 Executive talent management focused on replicating high-quality leaders

• Develop Employee engagement and attitudes key to performance through top management.

Employee engagement drivers are :
1. Challenging and exciting work
2. Career growth
3. Learning and development opportunities
4. Good boss

• From ―30 years at hard labor‖, to using flexibility as a business advantage: Creates genuine
opportunities and exhibits desirable cultural conditions

Create a company culture from the top down:

A company’s culture will play a vital role in emerging markets.

1. Brand promise has to feel authentic.
2. Employees must be rewarded for reasons of merit;
3. Although employees want to be recognized for individual achievements, they also want to
feel a connection with their teams.
4. The culture has to be truly ―talent-centric,‖ so that people know they’re critical to the
company’s success.


Part 2:

Expanding your understanding of Emerging Markets
& Developing Talent Management Strategies

a) Booming markets in China, India, Russia
with shortage of talent

b) Developing talent strategies that leverage
skills and capabilities across markets

a. The Talent Market in Emerging Markets

The Talent Market in Russia, China, India
Although the talent gap between supply and demand is pervasive in the developing world,
the particulars vary by country. Below some information on Russia, India, and China .

China
• Deficit in middle, country, regional
leadership
• Only 50% of Asian executives believe the
supply of skilled labor is adequate
Russia • The cultural revolution created a “missing
• The supply of senior talent is limited owing to generation” of talent aged 45 to 55- so
the legacy of a planned economy expats fill most jobs at the top
• Most deficits stem from fast growth, labor • Limited experience working in a multi-
shortage, and heavy foreign direct investment national organization
• Difficulty fielding critical talent due to cultural
assimilation into the business
India
• Limited experience working in a multi-national • India is notable for exporting talent on the
organization regional and global levels
• Inadequate people management and • Less deficit in country and middle management
communication skills • Salaries for supervisory positions raised 20% in
2005
• Indian companies are increasingly focused on
developing employees to drive retention as the
war for talent grows increasingly competitive

b. A new model focuses on develop, deploy, connect

In an environment of skills shortages and limited resources,
the focus must shift from managing “A” players to “A” positions
From “A” Players To “A” Positions
How do we
How do we support support our most
our top performers? critical
positions?

A Critical Workforce Segment-
Based Talent Strategy

Building a critical workforce segment strategy: example

Business Unit Strategic Plan
Build new Market - Grow Asia

Sales and
HR, Finance, IT Retail Operation
Marketing

HR Business Commercial Commercial Operation Retail Logistic
SAP Analyst
Partner Director Analyst Mgr Mgr
Strategic Core Critical Strategic Critical Core
Support Support Position Support Position Support

For Core Support Positions For Critical Positions – Regardless of Level
• Reduce talent investments or outsource • Increase access to investments and
For Strategic Support Positions build talent by feeding from strategic
• Maintain investments and buy talent support positions


A new model focuses on develop, deploy, connect

1. Develop 2. Deploy
Acquire Retain

3. Connect
Develop Deploy
Build capability Broaden and
through on-the-job deepen capability
learning through stretch
Connect
assignments
Create networks and
high-quality relationships
that maximize
performance

Advantages
• Focused on productivity of critical talent
• Creates dividends for acquisition and retention
• Potential to maximize existing talent

Develop: Ensuring that critical workforce segments are
acquiring cutting edge skills to drive innovation

• Formal training helpful for
meeting specific requirements
• Learning is social in nature -
people learn through their
interactions with others,
especially when tasked with real-
Capability life issues
Develop Deploy
Performance
• People are more committed to
the learning that occurs when
Commitment Alignment they are ―tested‖ in ways that
matter, especially when they
Connect
collaborate with or are
accountable to others


Deploy: Strategic deployment of critical workforce segments
will enable intensified growth

• People learn the most in jobs
that stretch them to grow, tap
their unique skills, and fuel their
imaginations
• The best organizations avoid
Capability pigeonholing people based on
Develop Deploy the confines of their resumes
Performance
• They also employ formal
Commitment Alignment systems to manage
performance - And they offer
Connect
frequent dialogue and feedback


Connect: Connecting talent in critical workforce segments
converts knowledge into productive action

• People-to-People: Cultivate
high-performance networks of
high-quality relationships (i.e.,
CoPs, knowledge management
programs)
• People-to-Purpose: Build and
Capability sustain a sense of personal and
Develop Deploy organizational mission
Performance
• People-to-Resources:
Commitment Alignment Manage knowledge, technology,
tools, capital, time, and
Connect
physical space to achieve
professional and business goals



Part 3:

Importance of HR’s active participation &
involvement in market entry and expansion

HR plays a vital role in Emerging Markets

Organization looking to expand into emerging markets need an HR strategy that reconciles
differences in Economic Structure, labor laws and staffing expectations

Many emerging countries are seeing both business expansion and strong merger and
acquisition activity on the local level. When dealing in these markets, the skill and
aggressiveness of a company’s human resources team can make the difference between
success and failure, as each market has unique operational challenges in terms of economic
structure, access to capital, consumption patterns, educational achievement
and cultural expectations.

Bringing HR to the table as early as possible can help avoid potential missteps and produce
better long-term results, as HR can address specific issues at every step of the startup or
acquisition process, from site selection to recruitment and retention.

Involving HR professional with specialties in local labor law

Low-wage countries generally present a consistent human capital challenge. Only a small
percentage of university graduates with general degrees are equipped to work in a
multinational company, and graduates with technical degrees can be similarly unprepared


HR involvement in market entry and expansion

HR steps to expand in emerging markets:

1. Site Selection (evaluating the Talent Pool)
2. Labor laws and regulations (visa/work permit; employment conditions)
3. Staffing determination (Expat vs Local / cost on PEX)
4. Recruitment & retention. (Salary & Benefits)

Site Selection

• How large is the potential pool of talent? Does the education system consistently replenish
that pool?
• How much flexibility is there for future growth? how easy is it to shut down operations in
the future, if it is necessary?
• Are there special country-unique considerations that may come into play?

Labor Law

• Labor laws in many emerging markets are protective of employees and, as a result, pose a
potentially significant strain on a company’s budget. (i.e wrong assumption on social Tax in
china is 45% ). Organizations may not be permitted to terminate employees, for example,
without incurring government-mandated costs.
• Health care, pension benefits and unemployment compensation must all be considered in
light of the eventual possibility of terminating individual employees or shutting down or
downsizing an entire operation


HR involvement in market entry and expansion

Staffing Determination
• The local talent pool in an emerging market often lacks the experience to meet startup
staffing needs or plans for future growth.
• Expatriate employees are costly, both in terms of direct compensation and infrastructure.
They will inevitably have higher salaries than local talent, a discrepancy that should be
properly managed in order to avoid disgruntled local employees.
• One method that works well in bringing local employees up to speed involves selecting
potential local managerial talent at the outset and sending that team abroad —often to
headquarters — for six to nine months. There the local talent learns global business norms
in preparation for return to the home country. Then, when it is time for the startup
expatriates to leave, there is a local team
• Be flexible, allow for early ―non-obvious‖ moves. Dow also enables employees to move
freely between functions and businesses, specifically allowing—and encouraging—non-
traditional and ―non-obvious‖ moves.

Recruitment & Selection
• In order to recruit and retain good professionals, organizations should develop an
attractive and well-designed remuneration package for each category of employee.
• HR will also have responsibility for developing local HR and benefits policy documents,
producing a mandatory staff handbook and documenting disciplinary procedures.
• Makes plans to support operational growth in emerging markets. Growth won’t support
itself


Emphasize on Training &
Development

• Begin career planning early in an employee’s tenure.
introducing career paths as part of employee on-boarding —
several years earlier than most competitors.

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