The war for talent in Asia is causing havoc
As 2010 comes to a close, there is
no doubt that there has been a remarkable recovery in the travel and
tourism sector in Asia, which has been fuelled primarily by China, India
and Singapore, all of which have seen some of the world's highest GDP
growth in 2010.
Asia Pacific region has seen a 14% year-on-year growth in arrivals,
where tourism arrivals are now exceeding pre-2008 figures. This
confidence has injected a much-needed boost into the recruitment market,
where companies are focusing on growing their employee base and not on
retrenchment.
And what is all this leading up to? A war for talent in Asia, where a
Chinese employee is willing to walk away from their job for an
additional 500 RMB extra pay per month. That is US$75!
This morning Andrew Chan, CEO of TMS Asia Pacific, introduced the
results from their 3rd annual Salary Report Asia. His presentation was
followed by a more in-depth look at hospitality industry trends in the
ever bigger Asian market, presented by Professor Chris Chan, Dean of
Cornell University - Nanyang Institute in Singapore. The stats he used
were from various 2009/2010 McKinsey studies of the region.
The sample size for the TMS report was 800 travel, tourism and hospitality personnel from 11 countries across the Asian region.
Timing was everything in 2010. About 25% of the survey respondents have
experienced a pay cut in the last 12 months, signaling that there is
still an after-effect from the economic crisis.
Yet if the employee had a review closer to the end of 2010, they
witnessed a pay rise of 44% which showcases the optimistic outlook that
the industry has right now.
There were also some interesting figures being released in terms of
average salaries across Asia. The MICE sector offered the highest
average annual salary of US$71,787, followed by GDS, hospitality and the
airline industry. And contrary to popular belief, average salaries in
mainland China are now almost at par with those in Singapore and not
that far off from Hong Kong, which leads the pack in terms of salaries
in the industry, averaging around US$75,000. Malaysia had the lowest
average at US$38,000.
The job market is becoming very competitive and is making employees feel
insecure about their long term prospects within a company. Given that
employees have many more opportunities compared with 12 months ago, they
are faced with the following question - do you stay with your safe job
or do you go chasing a higher salary?
It's important that companies have in place well thought-out staff
retention strategies, for there are many job offerings across the
industry, all trying to lure away your staff. And even though the
prospect of career progression within the current company is a major
motivator for employees, it's not the only factor. Employers have to
reward their staff for good performance, continuously offer training and
development and provide career advancement possibilities. But that's
not enough. They also have to provide higher renumeration. It's no
longer an either-or situation.
And don't forget that the Asian market is the most diverse region in the
world, thus the talent strategy has to be customized per country. Do
not use a one-size-fits-all approach.
When it comes to staffing, there is a big mismatch of opportunities and
top talent in China. For example, it's still very rare for a GM of a top
hotel in China to be Asian, especially in top tier cities. Thus young
Asian employees don't see a long term prospect in their sector due to
the glass ceiling and may be willing to jump ship much quicker.
China is currently going through a war for talent and a war for jobs.
There is an overcapacity of universities, where 60% of Chinese graduates
cannot find work. And MNCs are seeing their talent snatched away by
local private companies who are paying a premium to buy talent that has
already been internationally trained. Consequently, even middle managers
are expecting outrageous pay increases where packages are approaching
international levels. There needs to be a balance between low cost vs
expensive talent.
Professor Chan also touched upon various trends with Asian travelers.
Currently, Chinese tourists are still predominantly interested in
domestic travel while Indian tourists are more keen on international
travel. A reason give was that Chinese infrastructure is superb and has
enabled and encouraged intra-China travel, while India's infrastructure
is crumbling, which incentivizes Indian travelers to go abroad.
Given that China is discovering the concept of vacation, as a travel
provider, are you prepared for the onslaught of Chinese tourists? One of
the points that was emphasized over and over again is that you need to
have Mandarin speaking staff. You, as a service provider, need to
provide the convenience. Another example given was payment methods.
Chinese tourists prefer to pay by UnionPay and not Visa. Are you set up
for that?
Here are some interesting stats comparing the two giants: China is and
will continue to urbanize more quickly than India; the Indian population
will catch up to China in 2025, yet in the same year urbanization in
India will be at 38% while in China it will be 64%; India's labour
supply will grow much faster than in China.
How about South-East Asia? The talk is always about China and India,
nevertheless, we mustn't forget that there is huge potential in the vast
SE Asian market. The market can be characterized as very fragmented,
being an amalgamation of economies at varying stages of development.
And it's not without its problems, despite the rapid economic growth and
growing wealth of the 500 million plus market. Singapore, for example,
is expected to have more people leaving the workforce than entering by
2017. In terms of labour retention, there is a trend that Singaporean
talent wants to go overseas, so how do you keep them at home? The
problem of course is that China is literally sucking up talent in the
region due to its sheer size. What to do?
A talent dilemma that I wasn't expecting has to do with real estate
profitability in Asia, which is on a rise. Large Asian property
developers have introduced a very successful hybrid model, where a given
complex will have a shopping mall, executive rentals and a luxury
hotel. What is starting to happen is that some property developers are
interested in developing their own brand of luxury hotels and are thus
stepping into direct competition with top international hotel brands.
And where do you think they will get their top talent from?
By 2025, Asia will have 23 mega cities, each with a population of over 5
million. The opportunities for growth are countless, yet the search and
retention of top talent will become ever more complex due to the
multitude of different players searching for top staff and the sheer
number of possibilities for good staff out there. Are you, as an
employer, prepared for this battle? You better be!
Source : http://www.webintravel.com//news/the-war-for-talent-in-asia-is-causing-havoc_1429
