Regardless of which era we are in, talent management has always been one of the most critical human resource strategies for all executives. The rationale behind this is rather simple as human capital has always been the most sought-after asset, particularly the talents and high performers who can help steer an organisation forward.
I have seen many studies showing that the total cost of losing an employee can range from tens of thousands of dollars to between 1.5 and 2 times annual salary or more. Those figures are just for ordinary employees — imagine how much it could cost an organisation when it loses a real talent.
The total cost of losing an employee includes, but is not limited to, the cost of hiring a new staff member, be it through advertising, interviewing, screening or recruiting; the cost of “onboarding” the employee, such as training; the loss of productivity as a new person may take one to two years to reach the productivity level of an existing staff member; the loss of engagement as other employees who see high turnover feel disengaged and become less productive; increased training costs and even cultural impact, because whenever someone leaves the others will naturally take time to ask “why?”
Most importantly, human capital is and should be considered as an appreciating asset in which the longer people stay with an organisation, the more productive they become as they have managed to learn the systems and products — and surely they have also found ways to work together.
Simply stated, talent retention as part of talent management will continue to play a vital role in every organisation’s strategy.
Another side of the story that we have to take into account in order to foster the right strategy is the changing talent landscape, especially when we’re talking about Asean.
Specific demographic, technological, cultural and economic factors in Southeast Asia are accelerating the pace of change in both workforces and the workplaces. The future workforce for the region needs to be agile and skill-ready in order to support the new and exciting opportunities that impel future business growth. In this sense, future Asean talents will also need to develop core strengths in soft skills such as adaptability, collaboration and problem-solving to meet future demands.
Also, more and more we can see the impact of the regional workforce that is not confined by geography, and that transnational corporations are not limited to national borders when they source talent. In recent years, we have also seen growing workforce diversity, which will demand more time and bigger budgets for coaching and training when there are increasing differences of communication styles and cultural expectations among diverse talent pools.
What’s more, the multi-generational workforce factor will become even more challenging for the region; hence Asean leaders are forced to create a common cultural framework for their companies for their businesses to grow.
In the meantime, the rising number of millennials in the workplace is dramatically changing human resource management from attitudes to the actual work. Many millennials we are learning, are not just looking for job, they are looking for a dynamic experience from the job; hence, if companies want to have the best and the most talented millennials, they will need to create the work cultures that support these preferences.
Above all these, what is driving change the most and radically disrupting the region’s talent landscape is the rapid advance of technology, especially digital applications. This will eventually eliminate the need for many jobs while creating new positions, but it will also disrupt the way people work by increasing organisational dependence on virtual teams that work across borders for common business goals.
All in all, this rapid transformation will compel a change in the skill sets demanded from Asean leaders as they must be able to lead with a global mindset with agile thinking. Above all, they will need the capability to manage a multicultural workforce to level up their business opportunities and eventually create impactful outcomes. In other words, they will need to rethink their talent management strategy to stay relevant and stay competitive.
Now that we know how important human capital is and how critical it is for leaders to change their talent management strategy to keep up with the disruptive era, the real question is, what are the implications? What exactly can they do to stay in the game and not be disrupted? These are the questions I shall answer in coming articles.
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Arinya Talerngsri is Chief Capability Officer and Managing Director at SEAsia Center (formerly APMGroup) Southeast Asia's leading executive, leadership and innovation capability development centre. She can be reached by email at arinya_t@seasiacenter.com or www.linkedin.com/in/arinya-talerngsri-53b81aa
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