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- Peter Crush
If the Commonwealth Games has taught us anything over the last few weeks, it’s that there’s a lot more countries (and a lot more economies), than meets the eye. OK, so the island nation of Niue (population 1,600) or its Pacific neighbour, Tuvalu might not exactly be the hotbed of growth, but their place on the planet serves to remind us there is much more out there than Europe, and in recruitment terms, that means much more opportunity.
And what opportunity there is; especially in the so-called ‘emerging’ economies – think Vietnam, Cambodia, Laos, African nations, and Brazil (average growth 4.5% during 2004-2010, the new sixth largest economy); India (growing at 5.3% per year, home to five cities with more than 5 million people and 10 more with 2-3 million); and of course, China.
While some say the latter has already ‘emerged’ (China will overtake America as the largest economy by 2018), there are others chasing its coat-tails – such as nearby Shanghai and Hong Kong, and finally, big businesses are opening offices in the Far East. GE did so in 2011, Ford says it will double the number of dealerships there by 2015; and Coca Cola has invested $4 billion there in the last two years.
But growth, of course, is only half the story. Recruiting into the emerging markets might look like a licence to print money, but surely it’s another kettle of fish – isn’t it?
“In the interim space, recruiting into emerging countries like the Middle East is actually very similar,” argues Charles Wilson, interim sector head for technology, media & telecoms at Penna. “Initial interviews are always done by phone, and while visa requirements are obviously different, it’s only really a question of logistics.” But on the permanent side, he says the emerging markets are not for the faint hearted. “It’s much more drawn out and laborious; businesses in those countries tend to take longer putting offers on the table, and it’s much harder to find a good fit.”
According to recent figures, approximately nine out of 10 people employed in the private sector in the Middle East are expatriates, with expats comprising one third of the total population. In Brazil, the number of foreigners almost doubled from 961,000 in 2010 to 1.5 million in 2011, but according to Nick Stephens, executive chairman of RSA (which recruits in the pharmaceutical sector), this creates its own problems. “One of our toughest jobs is weeding out those who just want to have a foreign assignment on their CV,” he says. “These are the people who’ll only stay a year when we want them for much longer periods.”
He adds: “Where we’re working with multinationals, having access to their own talent pools helps eliminate this a little, but when you don’t have this to interrogate, you have to either find talent locally, or try to find good, skilled people who genuinely want to stay working abroad.”
Local heroes?
Recruiting local talent on the ground helps cut hiring failure rates, but it also forces the issue of whether or not agencies should open a local office, or rely on local agents to act on their behalf. Says Paul Beasley, CEO of Transline Group (which is expanding into numerous emerging markets, including Thailand, Canada, Poland and Romania): “We feel establishing a foothold was a vital step for us. We opened offices as soon as we could in those markets.”
“Because emerging market offices are staffed by local people, we actually benefit twice over: staff they know the market, but we also benefit by them promoting our – perhaps more western – values. For instance, in Thailand temporary workers are often treated poorly, including not being paid on time. Because we always pay on time, word has spread very quickly that we are a reputable company, and enquiries to us have subsequently shot up.”
Agencies that put their money where their mouth is to set up abroad will clearly have early entrant advantage. NES Global Talent, which recently opened a new office in Shekou, South China, is now run by Darren Pang. He has more than eight years’ experience in the region, and was previously based in its Singapore office. But even with experience, Joshua Schrijvers, divisional manager for NES Global, projects can still be “challenging.”
Adds Stephens: “Mistakes often made in emerging markets recruitment is that you hire someone because they look right, and sound right, such as someone from China looking to move back. On paper they have everything going for them, but we’ve learned to our cost that on returning, the China in front of them is very different from the China they left, and re-integration is difficult.”
To counter this, he will always use in-depth psychometrics [“we obsess about it all the time,” he says], and advises any other agency recruiting into emerging markets to do the same.
What agencies have to remember, is that low-skilled recruitment is easier; but it’s the highly skilled that are often the focus of the talent war. Stephens says he’s often searching for what he calls the ‘honorable maverick’ – someone who can handle being recruited to work in a different territory, with all the social, cultural and family upheaval this involves. So should agencies also be maverick and go out to these regions too? It depends on your attitude to risk and reward. But for some risk, the rewards could be very great.
What about the red-tape?
Second to cultural issues, RSA’s Stephens says compliance issues are always something that needs to be considered. Will Burrows, head of employment law at Lewis Hymanson Small says: “It’s unsurprising recruiters are keen to set up in emerging markets.
But, with opportunities come risks. A good recruiter should be able to advise their clients on what employment issues they might need to consider including visas, social security, healthcare, pensions and tax. Failure to conduct proper research could land companies with significant financial penalties should anything go wrong.” He adds: “Laws in emerging markets are also changing rapidly as the sophistication of the economy evolves, so recruiters must keep abreast of changes. For example, China’s Labour Contract Law that came into play in 2008, following a series of staff sacking scandals, makes terminating employees during the term of their contract extremely difficult. As a result, it is common for employees in China to now be employed on initial fixed-term contracts to allow for more control and flexibility.”
Top tips
From Traci Canning, MD, (EMEA) First Advantage (Pictured)
Change management: Whether you are on the ground in Rio or being asked to oversee a programme for Dubai from London, it is important to remember that pre-employment screening may be a new concept for candidates and your internal stakeholders. Taking the time up front to educate and communicate what screening is – and is not – will help when it comes time to roll out your programs.
Vendor due diligence: In many emerging markets, in-country HR and risk teams may already be conducting ‘screening’ of some type, perhaps through a local investigations or recruitment agency. It is important to understand what services these local companies are providing, and for corporate governance reasons, the nature and structure of the business itself.
Local requirements: When it comes to data privacy there are significant differences exist between emerging markets. While third-party access to criminal records is available in Brazil, the check is performed very differently in South Africa, where fingerprinting and biometrics for criminal checks are the norm. Other markets, such as the UAE and Kenya, behave more like some European countries. Here, it is more common for the candidate to get a copy of their own “good citizen” certificate. Across all emerging markets, it’s worth noting that education and employment verifications can take longer than we are used to in the UK.
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