Globally, the talent shortage has moved from acute status to chronic problem. Organisations emerging from pandemic restrictions with confident growth plans now have a new challenge – attracting talent when it has more employment options than ever, while also retaining current employees as the ‘Big Quit’ movement takes hold.
In October 2021, Korn Ferry released a global report showcasing the pressure on talent acquisition in the year ahead. More than half of the professionals surveyed believe employee turnover will continue to grow in 2022 – and almost a third would quit their current job even if they didn’t have another one lined up.
But is this also the case in the Asia Pacific? I spoke with the Korn Ferry experts across Asia Pacific about what they are seeing, and uncovered five trends that matter most for our region.
1. The talent gap is only going to get wider
Restrictions on global mobility have blocked off traditional sources of talent for many countries. Plus, the war for digital talent has only intensified as every organisation realises how fundamental technology is to every aspect of their business.
So here is the bad news: if you’ve been struggling with a shrinking talent pool, it is unlikely to flood any time soon.
Most APAC companies have a big growth agenda and are creating new roles, which further exacerbates this demand and supply mismatch. In ASEAN, we are seeing shortages in areas like AI, data and cyber expertise, as well as diversity and environmental, social and governance (ESG) skills.
Konika Chadha, Head of Professional Search with Korn Ferry India, says she is seeing high employee turnover as well as a critical shortage in specific skill areas – including data scientists, heads of engineering and even CTOs.
“For these skills, it’s a market driven by the candidate or employee – not the employer,” she says.
India’s business momentum has picked up faster than expected, and Konika says the country is evolving into a hub for developing new technologies through scalable solutions.
“Digital talent not only understands the technological revolution India is going through, but they are also agile and strategic in their thought process – which is so critical today,” she notes.
Australia and New Zealand’s Head of Professional Search Carl Portelli is also seeing shortages in talent supply, especially as these countries depend on international and interstate talent – and borders have been firmly shut.
“We lost a large number of expats, and have little visibility of when we will see the influx we need,” he says. “Organisations need to scale up quickly to capitalise on market growth as we rebound from COVID lockdowns. They are going to great lengths to attract talent – including increasing salaries, which makes retention elsewhere even more difficult.”
2. Short-term incentives and unsustainable salary hikes
Globally, we are certainly seeing higher starting salaries, more long-term incentives and benefits, and sign-on bonuses – even for entry level hires. But is this strategy both equitable and sustainable? Longer-term compensation packages may need to be linked more to performance or wealth creation.
“If you bring in external talent at a premium, you also need to think about what that does for pay equity within your team,” notes Carl.
“Hiring employees at a higher compensation is a temporary solution,” confirms Konika. “Counteroffers are very common, and increments are not just in double but even triple digits for the right skills.”
In China, additional bonuses targeted key talent retention rather than recruitment during the pandemic.
“This proved to be a great strategy,” says Richard Du, Sector Leader Professional Search China. “As the economy bounced back in 2021, these companies have delivered higher growth. while those who cut back have suffered higher turnover.”
3. Your next big hire may be within
Could the solution be closer than you realise? “The talent you already have in your business might be the talent you need,” suggests Carl.
Internal mobility can also curb attrition by creating new development opportunities. Reskilling and upskilling existing employees can help you fill specialist roles – and as they already understand your systems, processes and culture, it can be easier than starting again with a new hire.
Retention is likely to be the key battleground in the year ahead. So, consider how you could invest in career development, embrace the potential of interim executives, and give high-potential talent the opportunity to step up.
4. Candidates expect more at every step
“Candidate experience starts from their first interaction with you as an employer,” notes Konika. Globally, we expect more organisations to reinvent the virtual hiring experience and employee onboarding processes. That might mean scheduling formal virtual introductions, and ensuring closer HR engagement throughout the crucial first 90 days.
“The recruitment process must be faster – time is of the essence to get the right candidate onboard quickly, especially when they may receive multiple offers,” Konika adds. She says she sees a lot of organisations fast-track recruitment with application tracking systems that use AI for initial screening, and even chat bots for the initial rounds.
Richard says Chinese companies are also building agility into their talent acquisition and management strategies to improve the pace of decision making.
5. Flexibility is fundamental to your EVP
How you stand out as an employer has never been more important. A strong employee value proposition (EVP) may include an enhanced sense of purpose and ESG alignment, as well as better benefit plans and, most importantly, flexible work arrangements.
When we asked workers if they will return to the office, 32% said they don’t think they’ll ever go back full time, and 74% said they have more energy and focus working from home instead of the office.
For many APAC organisations, this flexibility is non-negotiable.
“Your EVP will incentivise candidates to join your business, and also ensure employees stay – it creates engagement and affiliation,” says Carl. “Working from home has become a value proposition, and many candidates now expect their next employer will offer flexible working environments.”
With pent-up demand continuing to make hiring challenging, now’s the time to ensure your talent acquisition and retention strategy is ready to meet the demands of the future.
“Having a talent strategy is as important as having a business strategy,” concludes Konika. “This gives you the ability to predict future skills, build a talent pipeline, and create an organisation which thrives on skill development – and that will be key to success in the future.”
For more insights into global talent acquisition trends, download the white paper.