CEO Executive Newsletters - August 2011 by Logistics Executive

CEO EXECUTIVE SERIES!

22 AUGUST 2011

Emergence of the Lo-Pat Employee in Asia Darryl Judd

International expat talent declines in Asia. International talent is no longer as attractive to supply chain companies in Asia as it once was, Darryl Judd writes

Chief Operating Oﬃcer Logistics Executive Group

With more than 20 years of executive experience in Aviation, Supply Chain and Logistics Transport Industry, Darryl has held executive positions within the airline & aircraft leasing/charter industry and major logistics organizations.

He is regularly called upon to manage key human resources consulting projects and supporting business to drive changes, particularly around M&A activity and international executive management. Email: darrylj@logisticsexecutve.com

“There is a perception that relocating to Asia wi! oﬀer exceptional roles and expatriate packages,” the world’s population. It is presently experiencing rapid growth amongst middle class consumers, many with disposable incomes for the first time. The emergence of Asia as the world’s factory is Supply chains have consequently needed to a story that we all know well and which has adapt in-region. From being geared to serve key impacted on many parts of our lives, regardless of markets outside of Asia, they are now responding where we live in the world. This trend, coupled to the new challenge to serve the more agile and with factors like the need for companies to remain complex multi-distribution models, we now know globally competitive and have a footprint in the key sourcing hub which has developed here, has meant as “Pan Asia”. For Human Resource Managers in Asia, this Asian based Supply Chain companies, operating on diversity presents a new set of challenges within low margin/high growth models are in a constant their companies. need for people - local people! For example, there is a need to ensure that As a result, one of the greatest challenges for salary and role parity requirements are met and to Human Resources leaders in Asia is to balance understand and manage the variances this presents internal expectations to meet the growing need for cross-regionally. Where the average midcompanies to move to high performance, localized management wage in Singapore has grown to teams, in tandem with managing the financial approximately USD$4,500 per month, the challenges of increasing payrolls. equivalent role in the Philippines may earn less Encompassing a blend of mature and emerging than USD$200 per month. This is despite the skill economies, the Asia Region now comprises 60% of

Good talent is needed in all markets globally and Asia is no exception.

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CEO EXECUTIVE SERIES! base, experience and dynamics of the role being similar. Human Resources are also changing their talent acquisition strategies. In a region previously dominated by expatriate leadership, Asia over the past 3 years, by necessity, has rapidly embarked on the road to the localization of talent. There will always be a need in certain companies, at certain times for international leadership. This in the past has resulted in organizations relocating leadership talent into key roles at considerable cost where benefits such as housing and allowances can equal 70% of the salary. However this is a trend that since the GFC has rapidly reversed. The GFC eﬀect woke CEO’s and Human Resources Directors’ eyes to the fact that homegrown Asian Supply Chain professionals are as talented as their international counterparts and positioned correctly in the business could evolve into future leaders. With a real need to drive down costs during this period, organization’s localization programs ramped up. The unexpected discovery was that in fact the deeper that organizational leaders and talent managers searched into the local talent pool, the better talent they found. There is an argument from many quarters that the local skill sets have closed significantly compared to that of the international talent. In many ways, this is due to the greater exposure locals have to the complexity of global supply chains, the rapid, ever-

22 AUGUST 2011 career here after the family holiday in Thailand does not automatically ensure that you will obtain that Senior Executive role. We have cases where executives will bring wonderful experience and skills with 20 years plus experience in, say, Australia and wonder why they are not landing jobs overnight. We are changing pace of logistics in Asia constantly explaining that they and the melting pots of cultural are up against outstanding local diversity and economic variance talent these days!” in the region. Regional Asia Regional talent brings more consists of 48 countries and 3.87 relevant experience and lower billion consumers and one of the risk. Many think their automatic world’s largest manufacturing and path to Asia is guaranteed once most complex logistics they have achieved their career environments. By comparison, opus in Australia; in fact it is now as an example, Australians are the other way around. The GFC exposed to supply chain models was a reality check for chiefly serving a much smaller international talent as companies manufacturing sector and a removed the number of domestic market of just 21 expatriate roles to cut costs. As a million people. Many organisations feel that result, individuals were faced with the choice of leaving or unless their leadership brings making Asia home. diverse experience in Asia, the Due to the outstanding time taken by “international number of those who have newbies” just to understand their chosen to stay, a new group of surrounds is too great, too slow international talent has emerged and too costly. Companies where remuneration and benefits simply don’t have time. are largely inline with local According to Logistics Executive packages. The semi-local or the Recruitment Practice Manager ‘lo-pat’ as they are known in Cassandra Lee, who is based in the company’s regional Singapore some quarters, have salaries that may be marginally higher in headquarters, one of the most frustrating challenges to manage recognition of their global experience and portability but is the expectations of benefits are the same as those of ‘international talent’. their local counterparts. “There is a perception that Benefits such as education relocating to Asia will oﬀer allowances for children, hardship exceptional roles and expatriate allowances and business class packages,” Lee says. “Many return flights home have candidates simply don’t therefore become a thing of the understand that Asia has changed! Deciding to move your past.

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CEO EXECUTIVE SERIES! In real terms, the best advice for those international professionals seeking to gain Asia based experience is, in first instance, to be realistic. Appreciate and understand the dynamics of the Asia talent As Logistics Executive market and the move towards Recruitment North Asia Head Kate local or ASEAN based Broughton, based in Hong Kong candidates, ahead of expatriate points out, “Anyone who has lived employees. in Hong Kong or Singapore could Be prepared to lower the hardly describe these highly immediate financial evolved, cosmopolitan cities as expectations to compete with hardship postings”. the local and regional talent While companies are now well markets (i.e. don’t expect large aware of the risks associated with benefits and allowances when appointing international talent your local counterparts don’t). such as moving and settling families Get Asia experience - any – human resource managers and way you can. Find a way to get employees are now also on to a project whereby you will encountering issues around the be exposed to Asia. Be prepared internal dynamics their presence to take a role that might be seen creates. A local perception has on the outside as a sideways or emerged of the so-called ‘expat glass-ceiling’ as international talent downwards move - this will change quickly as you gain is brought in to fill key leadership experience and get a broader roles. An unfortunate result is the understanding of the dynamics loss of valuable local talent who of doing business in Asia. leave organisations believing they Looking internally for a won’t be promoted. move with existing employers is The disruption to business always a great way to get to Asia caused by two to three-year expat and get the 2-3 years experience rotations, which is the most in the Asian market. common tenure of overseas Stick it out when times get placements, is also potentially tough in your Asia role. You are detrimental to business continuity not attractive to employers if and another factor that weighs you have just one year of Asia heavily on the minds of hiring experience, head home and then managers. Despite the challenges, the Asia realise you liked it there after all and want to come back. This Region is flush with career just sends the wrong signals to opportunities. With supply chain potentials employers and flags and logistics becoming an risk. increasingly important focus for Above all be flexible and companies in Asia, demand for realistic! talented, experienced professionals is increasing.

22 AUGUST 2011

For a copy of the 2011 -2012 Logistics Executive Global Employment Report email: darrylj@logisticsexecutive.com

or kajalp@logisticsexecutive.com

Logistics Executive www.logisticsexecutive.com Australia Sydney Phone: +61 2 8262 9800 Melbourne Phone: +61 3 9863 9488 Asia Shanghai Phone: +86 21 6427 6697 Singapore Phone: +65 6818 9745 Hong Kong Phone +852 3125 7654 India Phone +91 22 4090 7053 Middle East United Arab Emirates Dubai Phone: +971 4 361 6275 New Zealand Wellington Phone: +64 4 496 6730

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