Asian managers spell the end of the expat era
Asia – As more global companies set up base in Asia, many are turning to local leaders to stand at the helm.
The Australian reported three in four senior executives hired in Asia are Asian natives living in the region. In fact, only 6% of 1,500 respondents were non-Asian, according to a Spencer Stuart analysis.
"It's a strategic necessity to be integrated in the culture. Otherwise, the time to learn all of it takes forever," Arie Y. Lewin, a professor of strategy and international business at Duke University's Fuqua School of Business, said.
He added companies are looking for leaders who have an intimate understanding of the local culture, to add more value and efficiency to the organisation.
As the demand for Asian leaders increases, two search firms, Spencer Stuart and Korn/Ferry, said they are now classifying executives into four categories: Asia natives steeped in local culture but educated in the US or Europe; the foreigner who has lived or worked in Asia for a long time; a person of Asian descent who was born or raised in a Western country but has had little exposure to Asia; and the local Asian executive who has no Western experience.
Unsurprisingly, both firms told The Australian the first group are the most sought after, despite being hard to attract and retain, with some demanding higher salaries than those of their expat counterparts.
Phil Johnston, a managing director at recruiter Spencer Stuart, said such Asian talent can command salaries of anything between US$750,000 (S$944,372) to US$1 million (S$1.26m).
Another reason why the demand for expats is starting to dwindle could be the rising cost of relocation. Johnson added for Asian hubs such as Singapore and Hong Kong, expats can receive as much as U$S200,000 (S$251,837) annually in subsidies for housing, transportation and private schooling. In addition, payments to offset taxes for the benefits total to another US$100,000 (S$125,922).
The demand for Asian talent to lead global companies in the region is not set to die off soon, and companies not only need to attract the right talent, but also prepare a pipeline of future leaders.
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