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Survey: Talent Management Challenged in Multinational Markets

Emerging market multinationals are struggling to build effective international management teams as they grapple with cultural differences, according to a new survey.

July 10, 2012
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London — July 10

Emerging market multinationals are struggling to build effective international management teams as they grapple with cultural differences, conflicting internal perceptions of talent management, according to a new Ernst & Young survey of 810 business executives from all major growth markets.

The majority of respondents lack confidence that their organization has or can build an effective international management team, the survey said. Just one in five (20 percent) said their company manages talent effectively across all markets. Less than a third of respondents polled said that their top management team has an international outlook on decision making (28 percent). The same number said their top management team has sufficient work experience outside of their home country.

The two main knowledge gaps in top management teams are an awareness of local culture (51 percent) and an understanding of global markets (50 percent). Only 18 percent said their company achieves the right balance between local talent and expatriate managers in international markets.

Other key management challenges revealed in the survey include:

A lack of an internal management pipeline forces companies to recruit from rivals. While building an internal pipeline requires time and investment, the latter can result in high turnover and salary inflation. Respondents put equal weight to building from within the company (53 percent) and requiring international experience (51 percent) when asked what approach they will use when building international management team in next three years.

Companies are unable to retain and reward high performers in different markets. Many companies feel they can improve their approach to retaining high performing global talent, the survey said. Yet only 20 percent said their companies do an effective job of evaluating and rewarding high performance across different markets and only 23 percent said their company is good at retaining key global talent.

C-suite leaders and lower-level managers hold conflicting views on talent management. The widest gap is in their priorities with regard to building an international management team — C-suite respondents give a low priority to recruiting locally from new international markets, compared with managers (16 percent as opposed to 33 percent). Compared with managers, C-level respondents have a much lower opinion of their companies’ effectiveness in rewarding high performance across different markets (19 percent vs. 26 percent) and aligning business strategies with an individual’s performance objectives (13 percent vs. 25 percent).

Source: Ernst & Young

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