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How to win the war for top talent in emerging Asia

Published on April 23, 2024

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According to a 2023 PwC study, 44% of employees in Asia Pacific believe that the skills required for their jobs will undergo significant changes within the next five years. However, only 48% have a clear sense of how those changes will unfold.

In the next 12 months, roughly 40% are extremely or highly likely to ask for a pay raise or a promotion while about 30% are likely to change employers. These figures represent a 7-10% increase compared to the previous year’s survey, indicating an increased willingness among employees to make changes in their careers.

Zooming in on Southeast Asia as a collective of individual emerging markets, these issues are compounded for employers by a long-standing shortage of top talent. Companies are routinely forced to cope with challenging conditions in the talent market. 

On a recent episode of Indonesia Digital Deconstructed by AC Ventures, the firm’s AVP of Organization and People  Derisa Zahara sat down with fellow practitioners in the Southeast Asian recruiting and HR sector.

Sandi Sadek, the Chief People Officer at global venture capital firm B Capital, and Sergio Salvador, the former Chief People Officer and current Strategic Advisor at Carsome, as well as a member of ACV’s portfolio advisor community, joined the conversation. The group discussed key strategies for attracting and retaining top talent in emerging Asia. 

Culture is key, but performance is king

When asked at a high level about how to think about hiring and keeping the best people, the group began by looking at cultural fit and diversity. According to Sandi, these two components are increasingly important in attracting talent in Southeast Asia, where the pool is still limited but slowly growing. 

She explained the importance of culture and a strong employer brand – aligning personal values with organizational goals is not just desirable but essential for fostering a conducive work environment. Beyond that, she went on to share that before you can have a strong employer brand, the company itself needs to perform well. 

“I think, irrespective of what type of company you work for, ultimately performance is king. People want to work for a high-performing organization. They want to work with great people. They want to do great things,” said Sandi. “We are also really seeing the importance of culture, particularly in Southeast Asia. This is why we try to make sure that people’s own values and goals align with the goals, values, vision, and mission of the organization.”

Sergio echoed this sentiment, saying, “Carsome has gone through various phases in terms of its ability to attract talent. I agree that high-performing organizations attract talent. However, I do believe that the motivations of different people can be quite different as well. At the most basic level, that can translate simply into questions like: Am I working with friends? Am I working with people that I enjoy being around? Are we all following inspirational leaders?

In addition to that, explained Sergio, it is quite different to try to attract very senior talent to an organization than it is to attract junior or entry-level team members. Strategies for both ends of the spectrum will vary greatly.  

Cross-border hiring and tailored compensation

In emerging markets like Indonesia, where competition for the best talent has always been fierce, employers need to think outside of the box. In many cases, this means looking regionally for the best managers and executives. But cross-border hiring also brings more dimensions and complexities to the compensation discussion. 

“When discussing employee attraction and retention, it’s crucial to recognize that Asia, particularly Southeast Asia, is not a monolith but comprises varied countries with distinct trends,” explained Sandi. “In terms of compensation, it’s vital to consider the specific market dynamics. For example, Singapore’s government actively supports investment initiatives, enhancing its appeal for innovation and entrepreneurship—a contrast to other regions. While traditionally, startups have offered lower base salaries, this gap is narrowing, even as compensation strategies become more nuanced depending on the company’s stage and industry context. As such, a company’s approach to benefits and compensation must be tailored to local conditions of the team member as well as the organization’s maturity.”

Sergio added, “Just double clicking on Sandi’s point, from a practical standpoint, simply offering high salaries to attract and retain talent is unsustainable in today’s market. Companies, whether small or large, must explore alternative strategies to engage employees meaningfully. This involves fostering a workplace where flexibility, autonomy, and internal mobility are emphasized, and where managers serve as mentors, not just overseers. These elements are crucial for making the employee-company relationship ‘sticky,’ enhancing job satisfaction and loyalty. After all, attracting talent is only half the battle; the real challenge is retaining that talent long-term, which is where these deeper engagement strategies play a critical role.” 

Hiring top talent  in the age of AI

Derisa pointed out that it is difficult to have an up-to-date conversation about highly skilled employees without discussing the sweeping implications of new technology, namely AI. She mentioned a recent government initiative in Singapore aimed at attracting 15,000 AI professionals and asked how Carsome and B Capital are thinking about the new state of play on the talent frontier, with AI now squarely in the mix.

“AI is a transformative force within our company, significantly shaping how we operate globally,” said Sandi. “From a personal and organizational perspective, we’ve dramatically advanced our understanding and implementation of AI. We’ve established a dynamic in-house AI team pioneering changes across all areas—from investment strategies to operational functions like HR and marketing. This proactive approach is not just about keeping pace but about leading the charge in leveraging AI to enhance our workflows and decision-making processes.”

Sergio added, “Discussing the strategic goal of attracting 15,000 AI specialists, it’s commendable but just a start. Given the expanding need for AI technology, this number is but a drop in the ocean. Over the coming decades, the demand will not only persist but increase across the region. To meet this, a multifaceted approach is essential. Upskilling current employees and collaborating with educational institutions to prepare students will be key. This strategy must combine  immediate talent acquisition with long-term educational partnerships to cultivate a continuous influx of skilled professionals into the AI sector.”

Sergio Salvador is available for strategic consultations with ACV’s portfolio companies via the value creation team. 

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