THE SHIFT IN TALENT FOR FRENCH MNCS MANAGEMENT IN ASIA - Lirsa
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© Éditions ESKA, 2012
THE SHIFT IN TALENT
MANAGEMENT
FOR FRENCH MNCS
IN ASIA
Cécile DEJOUX1
CNAM LIRSA
Maurice THÉVENET2
CNAM LIRSA and ESSEC Business School
W
estern MNCs are currently facing new tween Western and local companies. Second,
HR challenges in Asia. For years, they new Asian multinationals have emerged with a
were accustomed to being considered challenging policy to conquer new markets
very attractive for local talent, who saw them as around the globe. As a result, international ex-
good potential employers. Basically, the percep- posure is no longer limited to Western compa-
tion was that they offered comparatively better nies. Third, local potential employees perceive
benefits and career opportunities than local com- a potential glass ceiling for future careers in
panies. However, it could also be interpreted in Western multinationals that could block their ca-
another light; i.e., that local candidates were not reer progress at some point.
yet confident about how economic growth
would continue around the world and preferred This shift in behavior among Asian talent is
to join well-established multinational companies a serious challenge for French multinationals
with known brands. In any event, the situation that need to reshuffle their local HR policies
seems to be changing, at the expense of Western swiftly if they are to staff the upcoming growth
multinationals. In fact, young Asian talent now on Asian markets properly; i.e., when it will no
prefers local companies to Western multina- longer be possible to sustain the pace of growth
tional, a preference that has created a real obsta- in both the quality and number of staff by using
cle for Western companies in their strategy of expatriates.
being key players of the economic upturn in the Confronted by the difficulty of attracting, re-
emergent countries in this part of the world. taining and managing Asian professionals,
Three reasons for this significant shift may French MNCs need to reconsider their tradi-
be put forward. First, the differences in benefits tional way of managing human resources in this
and compensation are no longer significant be- region. In order to examine the scope, reality
1
Associate Professor at CNAM LISRA and Professor at the ISC Paris Business School.
2
Professor at CNAM LIRSA et ESSEC Business School.
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The shift in talent management for French MNCs in Asia
and future of this issue herein, we first consider process. Indeed, very little research has been
the economic, sociological and managerial fea- conducted on the topic. Most academic work ex-
tures of this emerging problem. We then present amines human resources issues with an eye only
the case of three major French MNCs so as to to international HRM (Festin & Royer, 2008)
contrast different business situations while pin- and expatriation (Cerdin & Le Pargneux, 2009).
pointing similarities and differences in which This apparent lack of interest in linking strategic
policies or strategies companies have been im- and HR concerns becomes a problem of the ut-
plemented as a response to this new situation. most importance, especially as human resources
We conclude by drawing a few lessons pertinent are a key factor in the success of any business
to the current challenges of international human and as the context of the local talent market
resources. shifts toward a new template. As it happens, the
supply of talent has changed in countries where
the higher education system provides numerous
well-educated young people. Moreover, the con-
1. THE ECONOMIC AND BUSINESS tinuing expansion of national economies across
CONTEXT Asia is spawning new companies and increasing
the demand for experienced executive or mana-
For most Western MNCs, the potential for gerial talent (McCool, 2007). Yahya & Kaur
growth lies in the Asian markets. In fact, some (2010) outline the fascinating example of Sin-
companies have been investing for years there gapore by comparing the strategy of recruiting
so as to gain market shares. Asia and emerging foreign talent in Malaysia and Singapore while
countries may be the real center for their busi- considering its economic, political and social
ness (McCool, 2007; Neal, 2007). A survey con- impact on local talent. Overall, however, multi-
ducted by the OECD and the Boston Consulting national enterprises face challenges in finding
Group (Vance & Paik, 2011) reported that in competent managers to staff operations and sub-
2010, there were one billion people of middle- sidiaries in emerging market economies (Koh,
affluent class2 in these new markets3. The same 2003; Tomasz & James, 2007).
study forecasts that this number will increase to
2.7 billion in 2020. That seems to modify the tra-
ditional view of the stages of the international- 1.1. The traditional issues
ization of a company slightly. The usual pattern of international human
was the evolution of the local and domestic
resource management
company towards the multinational company,
combined with the myth of the global company. As mentioned, traditional discussions of in-
Instead of a global company, some MNCs re- ternational HRM have neither included these is-
semble ‘new-centered’ companies with a mother sues nor even anticipated them. It is true that a
country and market that no are longer the epi- large body of research has been devoted to ex-
center of their activities and preoccupations. In patriates, managing cultural differences and,
fact, there are other centers possessing signifi- sometimes, the need for global policies in the
cant autonomy and a locally designed strategy. field. Obviously, economic growth in Asia has
For example, the CEO of Schneider is now raised the issue of recruiting and integrating
based in Hong Kong and the new VP (Strategy) young local talent for some time now. After all,
of PSA, a major French automaker, is perma- there was a real need for people who had a thor-
nently located in China where the company’s ough knowledge of the language and culture of
CEO spends one week per month on a regular these countries (Tomasz & James, 2007), and
basis. MNCs could not find at home Western citizens
Traditionally, theories related to the interna- with the right portfolio of linguistic, cultural and
tionalization of companies and businesses dis- business knowledge plus experience. Of course,
played little interest in the HR side of the that was a comfortable situation at a time when
2
Middle-affluent is a term applied to households with disposable income > USD 15 000.
3
Countries included :China, India, Indonesia, Pakistan, Thailand, Philippines, Kazakhstan, Malaysia, Vietnam, Russia,
Ukraine, Turkey, Brazil, Mexico, Peru, Colombia, Egypt, South Africa, Iran, Nigeria, Algeria, Morocco,
Saudi Arabia.
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The shift in talent management for French MNCs in Asia
MNCs enjoyed a fine reputation among young (Pigeyre, 2011), but rather how talent manage-
Asian talent, who saw opportunities for explor- ment can bring new solutions to address the
ing new parts of the world and for acquiring problem of a shortage of Asian talent.
both experience and additional training that Actually, this issue is also addressed in Asia
would be of great value on the market in the fu- and in terms of talent management. Some schol-
ture (Yeung, Warner, & Rowley, 2008). ars (Iles, Chuai, & Preece, 2008) show how six
Chinese firms have dealt with the matter. They
reveal how some firms focus on “exclusive-peo-
1.2. The context of talent management ple” (certain groups of high-performing or high-
potential candidates), while others used an
This new challenge for MNCs occurred at a “exclusive-position” focus on certain “key” po-
time when talent management appeared to be a sitions in the organization. Heid & Murphy
new frontier for renovating and reshuffling HR (2007) explain that a Global Talent Index (GTI)
policies in companies (Farndale, Scullion, & has been elaborated to measure the location of
Sparrow, 2010). When the notion became pop- talent. The GTI indicates that the USA will re-
ular at the beginning of the 2000s with McKin- main a talent pool until 2012, and a shift to the
sey (Michaels & Handfield-Jones, 2001; Pfeffer, BRIC will follow.
2001), the ‘War for Talent’ meant the incoming
fight between companies for attracting and re-
taining the candidates necessary for their devel-
opment during the .com or internet bubble and
1.3. Difficulties faced by Western companies
when demographic issues started to become in China
more obvious in Western countries.
Many studies (Connell, 2010; Schmidt,
Throughout the last decade, the notion of tal- 2011; Ulrich, 2010) have outlined how Western
ent has remained a concern. In some areas, talent MNCs are less attractive to Asian (especially
management progressively replaced human re- Chinese) students. Schmidt (2011) conducted a
source management (Dejoux & Thévenet, survey from 2006 to 2010 by collecting data on
2012). In other areas, talent management em- 300,000 employees and job candidates in China
phasized the difficulties inherent in detecting, at- within 60 firms. In 2007, the results revealed
tracting and retaining the talent considered that 41% of highly skilled Chinese professionals
necessary for the achievement of new strategies preferred to work for a Western multinational
(Cappelli, 2008a; Cappelli, 2008b, Rajwani, while only 9% favored a job in a domestic firm.
2009). By the late 2000s, a more strategic ap- By 2010, the figures were respectively 44% and
proach emerged which held that attention to tal- 28%. It appeared that MNCs remain the num-
ent would allow human resource management ber-one choice and that this situation might be
to become more strategic. The idea was that the related to the present economic climate. Second,
success of a strategy ultimately depends on the there are more and more graduate students in
presence of key talent within a company. Those China alongside more and more fast-growing
talented individuals are no longer synonymous domestic companies. Third, some studies
with high potential but rather with succeeding (Rashid, 2010; Ulrich & Sutton, 2011) empha-
in a business policy (Boudreau, 2010; Boudreau size a crucial difference between male and fe-
& Ramstad, 2007). male respondents as far as the choice of an
The new challenges for MNCs in Asia illus- employer is concerned. Women look for West-
trate perfectly this concern for getting the right ern MNCs because of the opportunity for inter-
people to ensure success of a strategy. These national assignments. They are highly
corporations need local talent for a series of rea- ambitious, even if they need to break through a
sons (Hsieh, Lavoie, & Samek, 1999), and the very thick glass ceiling. On the contrary, men
talent pool appears shallower since these MNCs prefer to remain in their home country and not
are less attractive than in the past (Williams-Lee, necessarily in the big cities. Finally, there is a
2008). Consequently, companies need to ap- debate about the number of Chinese students
proach their policies differently while under the who return home. Tung (2008) explains that, ac-
constraints of time and competition. Hence, the cording to the Chinese Academy of Social Sci-
issue is no longer whether talent management is ences, 70% of the Chinese students who
merely a re-packaging of what already exists experienced studies abroad did not return to the
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The shift in talent management for French MNCs in Asia
homeland. This question of talent flow (or – The public sector in many emerging coun-
“brain drain”, “brain gain”) is becoming more tries is also more desirable because of job
significant. security, professional opportunities, bene-
A few possible reasons may be put forward fits and prestige. Rashid (2010) points out
in order to explain why Western MNCs may lose that 60% of Indian male and female stu-
their attractiveness as top employers in this dents aspire to work in the public rather
emerging and growing marketplace: than private sector.
– The MNCs’ hiring advantages (higher sta-
tus, safety net, long-term career path, inter-
national assignment) are no longer 1.4. Overview of possible solutions
significantly more generous and motivat-
ing when compared to the packages that Facing this challenge, Western MNCs need
local companies offer; to develop different strategies to break through
with traditional policies and also to sustain their
– With the help of a good international edu-
growth in this fast-growing market (Zheng,
cational background on top of their na-
2009). Jenkins (2006) shows there is a critical
tional culture (Guanxi4 for example), the
need for the accurate and meaningful assessment
young Chinese graduates accumulate the
potential ingredients for a successful career of the impact of talent management and leader-
in a local company. Whereas, they consider ship development initiatives. Let us begin our
that they will never be able to get the overview by highlighting two seemingly preva-
equivalent portfolio of key competences lent policies. The first policy consists of attract-
for succeeding in Western MNCs; ing and retaining young talent by implementing
a talent management approach. The second pol-
– The best Chinese talent often leaves foreign icy consists of hiring young Western expatriates
multinationals with the conviction that they
with local contracts. These very general talent
will become successful entrepreneurs. In
policies emphasize the need to accommodate in-
other words, they will remain in their own
country, be in a position to seize any emerg- dividual expectations and, consequently, prepare
ing opportunities and thus make more money packages that are more and more specific and
as an entrepreneur than as a manager; attractive to individuals (Cantrell & Smith,
2011). These policies require that multinationals
– MNCs and their brands (except the luxury have processes in place so as to integrate indi-
industry) took a hit during the 2008 crisis viduals into the social and cultural context of the
and reduced staff, hiring, and expenses. company better.
Many graduates will remember that and try
to avoid the same experience in the future; From a practical, even sophisticated, per-
spective, Schmidt (2011) highlights five differ-
– Chinese graduates may be impatient, thus un-
ent strategies for those Western MNCs that
willing to wait too long for key positions. HR
professionals in Western MNCs mention this consider operating in China:
impatience and the common reaction of Chi- 1) reboot employment-branding effort with
nese employees leaving the company if they high-profile university alliances and sponsor-
do not get top jobs after a couple of years; ships;
– We can also imagine, even though it is dif- 2) create local development because most
ficult to assess it firmly, that young Chinese Chinese candidates want to stay in China;
talent may feel more and more patriotic as
3) offer variable career paths and a com-
long as the political status of their country
pelling long-term career plan;
is rising in the world; as a result, they may
feel honored to join a national firm at a 4) be smart about pay because domestic firm
time when the reputation of Western insti- pay increases between 20% to 50% more than
tutions is fading; MNCs to keep talent at home;
4
Guanxi comes from Confucius and refers to the concept of drawing on connections or networks of contacts,
which an individual may have, thanks to his/her family, friends, individual or professional relationships.
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The shift in talent management for French MNCs in Asia
5) become a quasi-local company by devel- stabilized concept; (c) the survey should help us
oping relationships with local suppliers in sec- understand better, in terms of the strategic ap-
ond- and third-tier Chinese cities. proach of human resource management, the ra-
We emphasize here that the traditional strate- tionale of these HR policies, given the
gic approach in HR should remain open to some characteristics of the three businesses, their
issues usually not addressed. For instance, global strategies, plus their corporate and HR
Rashid (2010) has outlined the importance of cultures. From a human resources perspective,
gender in these countries. A large survey, spon- these challenges should illustrate how the HR
sored by five global companies (Bloomberg, function organizationally tackles issues of talent
Boozc & Company, Intel, Pfizer and Siemens) management given the balance of power and in-
was conducted in emerging markets (Brazil, fluence of the corporation vis-à-vis the local en-
Russia, India, China and United Arab Emirates) tities.
among 4,350 college-educated men and women,
supplemented with focus groups. Results
showed that talented women in emerging mar- 2. BUSINESS CASES6
kets are ahead of the curve in unexpected ways.
These women represent 65% of college gradu-
ates in the UAE, 60% in Brazil, 47% in China, Research Methodology
50% in India. They represent a huge talent pool The methodology is based on exploratory
that is currently underleveraged. Nevertheless, case-study research (Eisenhardt, 1989; Yin
should a talent management approach focus on 1994). As related by Yin (1994, p 14) “ the case
this group, it would have to take into account study strategy should not be confused with
certain characteristics. First, women are highly “qualitative research” (see Schwartz & Jacobs,
ambitious and aspire to hold a top job (42% of
1979; Strauss & Corbin, 1990; Van Maanen,
highly educated Indian women earn as much or
1988; Van Maanen, Dabbs, & Faulkner,
more than their spouse). Second, they are will-
1982)… case studies can be based on any mix
ing to work extra hours (49 hours a week in
of quantitative and qualitative evidence. In ad-
Brazil, 73 hours in Russia, 58 hours in India, 71
hours in China5) and they do express a real pas- dition, case studies need not always include di-
sion for their work. Third, they face a double rect, detailed observations as a source of
challenge that limits their career path: having to evidence”. A case study consists of a description
care for the older generation (in India and China, of an entity’s actions. Our research was based
the notion of filial piety influences many deci- on planning case studies and we had in mind the
sions), so they are hindered by both maternity question to answer: “How does the talent man-
and family values. agement process address the issue of attracting,
retaining and developing young Asian talent?”
As mentioned above, our research has fo- The greatest advantage of the case study method
cused on three major French MNCs that are gen- is that enables researchers to reveal how a mul-
uinely international in their activities and can titude of factors have interacted to produce the
potentially be significant players in the compet- uniqueness of the problematic.
itive Asian markets. The survey of these three
examples should provide interesting information
Case Selection
at three different levels: (a) the survey describes
in real time how these companies are adjusting We selected three French MNCs that are con-
to ongoing rapid change within the Asian con- fronted with the same issue of staffing their
text that may jeopardize their traditional HR Asian activities with young Asian talent. The
policies; (b) the analysis will foster reflection by three companies have activities in different in-
HR scholars on talent management, its reality dustries (health food, consumer goods, industrial
and the emerging HR policies and practices projects), and have been involved in an Asia-
flourishing under the umbrella of this not yet centric talent management process for more than
5
R. Rashid, R. 2010. The Battle for Female Talent in Emerging Markets. Harvard Business Review: 101-106. p 104.
6
The authors would like to thank all the respondents from DANONE, L’OREAL and ALSTOM for their time and their
valuable insights.
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The shift in talent management for French MNCs in Asia
Table 1: The sample of the Study
DANONE L’OREAL ALSTOM
Talent Management Director
HR Asia Pacific International Recruitment Director
of South Asia
HR Talent Management
Employer branding Director Singapore HR Project manager
project executive
HR Talent Recruitment
China HR Manager China HR Project manager
project manager
Indonesia HR Manager HR South Asia
China HR project manager
Singapore HR project manager
five years. They all share the same objective of telephone to determine their willingness to par-
developing local staffing. ticipate. Interviews are focused interviews
(Merton, Fiske, & Kendall, 1990) in which a
Data Sources respondent is interviewed for a short period of
These three business cases are drawn from time (less than 130 minutes). In such cases, the
broader research on tackling HR issues from interviews may follow the interview guide but
French MNCs in Asia. In these three firms, in- may still remain open-ended and assume a con-
terviews with the HR country managers (China, versational manner and can contain a set of
India, Singapore) and HR managers (HR project questions derived from the case study protocol.
The interviews varied in duration, but all fell
leaders, talent manager leader) were conducted
within a range of 90-120 minutes each. Some
from 2008 to 2011. Some participants are gen-
interviews were organized face-to-face, some
eralists, responsible for all areas of HR; whereas,
by telephone. Interviews were tape-recorded,
others are managers of a business unit who have
transcribed verbatim, verified by the respon-
implemented talent management tools (table 1).
dents and used an interview guide in order to
further explore the “black box” of how the tal-
Data Collection
ent management process is implemented. This
The participants’ job titles vary, but all are interview guide consisted of both closed-ended
involved in policies and processes related to tal- and open-ended questions that were asked of
ent management in Asia. The participants’ ex- all participants. Examples of the questions in-
perience in the HRM field ranges from 2 to 20 cluded: “What kind of tools do you use to at-
years. Of the six female and seven male partic- tract Asian talent?” and “[t]o what extent do
ipants, six hold certification in the HRM field. you use mentoring to retain young Asian tal-
For this study, data were collected through var- ent?” For the latter question, participants could
ious methods: face-to-face, semi-structured, in- choose from a scale of 1-5. The interviews
dividual, and in-depth interviews were sought to obtain both consistency and diversity
conducted with 13 HRM practitioners, with the in responses in order to develop a better under-
help of an interview guide. Documentation re- standing of the perceptions of attraction and re-
views and archival records have been read and tention of Asians.
explored to multiply the sources of evidence.
This triangulation across various techniques of Analytical Strategy
data collection proves especially fruitful in that The data were analyzed using content analy-
it provides multiple perspectives on an issue, al- sis (Miles & Huberman, 1984). Thematic units
lows for cross-checking, and yields stronger were identified and formed the basis for answer-
substantiation of construct (Eisenhardt, 1989; ing the guiding questions. At the same time, this
Orlikowski, 1993). research employs an interpretive ontology with
The interview protocol was based on the re- a realist epistemology to facilitate the under-
search framework and the process of talent standing of managerial perceptions because
management. Practitioners were contacted by “when investigating contemporary phenomena
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The shift in talent management for French MNCs in Asia
within real-life contexts when the boundaries be- Asia has become one of the key drivers for
tween phenomenon and context are not clearly the growth of worldwide business for DANONE
evident” (Yin 1994, p.13). now and in the foreseeable future. Indeed, Asia
With this in mind, we prepared a general an- should represent about 13% of the company’s
business and 50% of the growth of the entire
alytical strategy to apply to the case studies (Yin,
DANONE group is done in emerging markets.
1994, p 106). After collecting the data, each in-
In order to make this growth possible, the firm
terview was coded separately on the basis of “in needs to make a shift in the rapidity of talent de-
vivo” words, phrases, terms offered by the in- velopment to be able to provide the business
formants. First-order codes are discerned. Then, with the local talent pool needed to face the high
various analytical techniques (see Miles & Hu- growth.
berman, 1984) have been implemented; such as,
putting information into different arrays, making DANONE faces specific marketing, business
a matrix of categories and placing the evidence and HR challenges in this part of the world and
within the categories, creating data displays for seeks to do the following:
examining the data, tabulating the frequency of – Reinforce its product and brand image.
different events, using some other temporal Some DANONE products (e.g. Aqua
scheme. Data collection, or first step of the strat- Water in Indonesia) are well known and
egy, relied on a theoretical proposition about the some are breaking into the market (espe-
causal relationships in answers as to how and cially baby formula).
why talent management enables companies to at- – Develop the local sales force and its man-
tract and retain people (Boudreau, 2010; Cap- agement. The company needs to hire many
peli, 2008a; Lawler, 2008). The second step of young salespeople and managers to in-
the analytical strategy was a descriptive ap- crease its market shares.
proach that was used to explain why implemen- – Expand its relationships with universities
tation of talent management for young Asians and business schools in Asia by promoting
had succeeded. its serious game “Trust by DANONE”, an
effective tool to promote the working speci-
ficity of the company. Management trainee
2.1 DANONE : How to attract Asian talent? programs have been created to integrate
more efficiently the young graduates.
DANONE, created in 1966 by Antoine Ri- DANONE has many strengths which should
boud, is a fast-growing food company who has help it reach its goals in Asia despite the fact it
defined its mission since 1995 as “bringing is not yet the leader because it is two times
Health through food to as many people as pos- smaller than Unilever and five times smaller
sible in the world” that experienced a major shift than Nestlé. For example, DANONE possesses
in 2007 allowing to have a business 100% con- a very strong culture of entrepreneurship that en-
sistent with the mission. DANONE underwent ables its subsidiaries to take local initiatives to
a commercial and geographical transformation fulfill their needs. For example, thanks to its re-
to create a new health-oriented company. First, search center and its local marketing surveys,
in 2007, DANONE focused its activities on four DANONE will find the right taste of dairy prod-
core competencies (57% fresh dairy products, ucts for Chinese consumers, as it has done in so
20% baby food, 17% bottled water, 6% medical many countries. The ninety subsidiaries are en-
nutrition). To achieve its target, the firm sold its couraged to propose products and action plans to
biscuit business and bought Numico, a world adapt to the local market. Also, people have been
leader in infant and medical nutrition. Second, considered a key driver ever since the company’s
the company decided its future was linked to founding by Antoine Riboud. Talent manage-
emerging markets. The shift may be seen quan- ment has been the heart of the human resource
titatively: in 1996, the largest share of sales was management process for more than fifteen years
in Europe (77% of the sales breakdown) versus and HRM has implemented many people-cen-
17% in emerging markets; by 2010, only 39% tered tools such as a specific program for Asian
of DANONE’s business was carried out in Eu- emerging markets, called “BO Le” in Asia.
rope and almost half of the company’s business The “BO Le” program was launched in Jan-
was in emerging markets (49%). uary 2010 as an ambitious policy to accelerate
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The shift in talent management for French MNCs in Asia
the focus on the urgency to develop Asian lead- enough [individuals] to grow in a sustainable
ers. This program was built through a cross-di- way in the region. There was the need to take
vision, country and multiple-function team. quick action to face this challenge. The idea was
Three objectives have been defined: attract, de- to build a common ambition to tackle this issue
velop and retain talent. “BO Le is a strategic HR in a collaborative way. As a result, a group of
program for DANONE because the growth of 20 people representing Danone in Asia (people
our business is located in Asia. The target of the from different functions, CBUs and countries)
BO Le program is to accelerate the development was created to identify this needed common am-
of young Asian talent. We have an objective to bition. Then two groups […] have been identi-
empower people in their team, to define what fied by the firm to set up a talent pipeline: a
are the key drivers in Asia to grow the resource group of ongoing leaders and a group of man-
pipeline after having analysed the manpower agers.”
needed in the next 3 to 5 years, and to allow For each of these two groups, a specific pro-
Asian leaders to grow in Asia then worldwide ”, gram included tailor-made training, a projects
said the HR Director of DANONE Asia Pacific.
workshop as well as networking and coaching.
The project teams have recommended key ac- Specific leadership programs and self-assess-
tions such as building a stronger employer brand- ment workshops on emotional competencies
ing, developing and generating talents faster, and have been proposed. Each local talent has to
retaining new or existing ‘DANONErs’. work on a Business Unit strategic Project with
Three groups have been working on this tal- other participants from other divisions to solve
ent management program: Attract, Develop and a relevant problem. In addition, they are pro-
Retain. Below are details about each one. posed to participate to a CSR project they are
choosing themselves, in order to develop a deep
• Attracting talent through strong understanding on contributing leadership. The
employer branding HR committee has organized events (coffee
morning, lunch) with two general managers
The group conducts a survey about the em-
from all the divisions for each talent. The objec-
ployer brand in five Asian countries and outlines
tive is to facilitate the transfer of employees and
a gap between in-house management values and
to expand the individual employee’s network.
people’s perception. This survey helps the com-
Finally, coaching sessions have been designed
pany focus on different key items regarding
to train managers to become effective coaches
countries. For example, in China what was re-
for their own teams.
vealed was working environment, career devel-
opment, proximity, entrepreneurship and
pragmatism. “Danone is indeed not always • Retaining talent for the future
known for what it is now, but for what it was in Given the high turnover in Asia, talent reten-
the past. For instance, an employer branding tion is considered a key challenge. The firm has
survey conducted in China in 2010 showed that ensured that the salary package to its competi-
Danone was still perceived as a biscuit company tors’ practices and to reinforce the safety net
both by young graduates and professionals. Or “because of the tradition of looking after seniors
in fact, the group sold its biscuit business back without a pension. This is one of the elements of
in 2007, while buying Royal Dutch Numico. The the company’s health goal and it echoes
new Danone, 100 % focused on healthy food Danone’s global mission (to bring health
products with the integration of the medical and through food to as many people as possible).”
baby nutrition businesses”. Many sponsoring Tremendous attention is paid to people who re-
operations have been set up in universities to sign, in fact, an exit interview is automatically
communicate and to attract graduate students. conducted.
Some student ambassadors have been trained to More and more Asian managers and execu-
promote the brand in student activities. tives have been nominated to lead key positions
in Asia and international assignments in Paris.
• Developing talents from within to generate A local director was promoted to a general man-
young Asian managers agement position two years after launching “BO
“An analysis of Danone’s talent pool in Asia Le” and a Chinese regional vice president was
was led and revealed that the group had not nominated from the general management pool.
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The shift in talent management for French MNCs in Asia
The “BO Le” program remains anchored solutions to attract and retain them”, said the In-
thanks to two basic tools: a roadmap in each of ternational Recruitment Director of L’OREAL.
the countries which sums up the key action, key The HR director of this area describes Asia’s
timing and key people plus a dashboard with key Generation Y as well-connected, ambitious,
performance indicators which are assessed every techno-addicts, who are mobile, want to be in-
two months by the HR steering committee in dependent from their parents. In order to attract
Asia. After two years, a survey based on online these candidates, L’OREAL had its ‘campus
answers and 30 interviews was conducted and managers’ in the targeted universities. They pro-
outlined three positive results: the hiring of pose sponsorship opportunities, interviews, in-
young talent has increased dramatically, the ternships and workshops. Furthermore, the firm
commitment of the Asian employees has im- proposes a famous worldwide ‘serious game’,
proved and the turn-over has decreased. entitled “BRAINSTORM”, with a pool of local
In order to reinforce its position in Asia, universities.
DANONE has implemented a talent manage- A talent shortage remains the first problem.
ment process to fulfill its recruitment needs. However, retention through development is an-
With the “BO Le program”, the firm displays a other one with which the firm is struggling. As
local hands-on approach that has reached two a result, three major courses of action have been
main objectives: hiring young Asian talent and drafted for L’OREAL in Asia: learning, compen-
committing all employees by boosting their mo- sation and promotion.
bility in Asia. L’OREAL has a lot of experience in effective
learning workshops. One ‘must’ for newcomers
is the two-year personalized guidance and train-
2.2 L’OREAL: How to develop young ing program appropriately called “FIT”. This
Asian talent two-year process is based on six key areas (ex-
perience in the field and with the products, train-
L’OREAL is a leading global company with ing and round-table discussions, personalized
a mission to make beauty universal in a sustain- meeting programs, on-the-job learning sup-
able and responsible way. In 2009, L’OREAL ported by the line management, individual guid-
celebrated its 100th anniversary. This interna- ance with mentoring and HR support and, at the
tional group promotes 23 global brands in 130 very start, a successful welcome). A specific
countries, hires 66,600 employees and, in 2010, learning program about leadership is offered so
had 612 patents. With the opening of emerging as to meet the expectation for learning quickly
markets, L’OREAL’s mission has broadened in and gaining as much as possible in the shortest
response to the vast diversity of populations. In period of time possible. An assessment center
2010, L’OREAL had 64% of its business in allows new employees to improve their individ-
Western countries. For 2030, the company’s ual skills. Mentoring programs help them get
business forecast is 70% in Asia, Africa, and quick answers to their questions and expand
Latin America. Attracting, developing and re- their internal network in such a big company.
taining young talent in Asia is becoming crucial For L’OREAL, integrating a newcomer is a
for the company. Indeed, L’OREAL’s Asia Pa- shared responsibility: the manager is considered
cific Business Unit hires one hundred people, an operational coach; the human resources team
considered young talent, for India, Singapore are project drivers; the newcomer, a potential
and South Asia annually; whereas, it hires more great performer.
than 500 for all of Asia (China included). How- Compensation is also a key argument. In
ever, the turnover is rather high at more than many Asian countries, local companies offer
50%. better compensation packages than Western
Given this context, L’OREAL has decided to MNCs do. For candidates, the compensation and
develop all the young talent in the Asia-Pacific. the safety net that a firm offers is a determining
“[the] talent management process is about mak- factor, because they need to think about their fu-
ing long- term commitments with chosen indi- ture as many Asian states do not provide social
viduals that will develop their talent and build compensation (unemployment indemnities,
our company for the greater future. The Gen Y medical benefits, retirement pension). Further-
in the BRIC, and especially in Asia, is one of our more, in these countries runaway inflation is the
priorities and talent management is one of the norm combined with the rising cost of living (es-
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The shift in talent management for French MNCs in Asia
pecially housing). “Gen Y in Asia is difficult to tablish a calendar for the process. The commit-
retain. They quit the firm if they have a better tees meet four or five times a year and elabo-
opportunity. They need to think about their fu- rate a succession plan. “L’OREAL takes a
ture because the government doesn’t provide so- long-term approach on career development,
cial compensation, and they pay for their based on people’s performance and potential.
relatives.” The group offers a wide variety of career op-
Promotion has become another requirement portunities.”
for the Asian Generation Y. This generation In conclusion, L’OREAL Asia uses all the
wants to stay for fewer than 3 years in a firm corporate tools and support at its disposal to de-
and to be free to test the job market and possi- velop the Asian Generation Y through its talent
bly join a new firm with better salary condi- review and nomination committees. At the same
tions. To meet this challenge, L’OREAL has time, the Asian L’OREAL core business units
sped up the pace of projects, enhanced respon- (CBUs) have taken the initiative to integrate cul-
sibilities and a worldwide network within the tural specificities and meet the requirements of
company to keep Generation Y committed to this specific ‘spoilt’ demographic.
the firm. Mobility is thus encouraged, includ-
ing giving early responsibilities to new talent
with a limit of two steps at a time, maximum. 2.3 ALSTOM: How to retain young
One step is a change of hierarchical position, Asian talents
country, division, professional field or trade.
Every entity has a formal process of talent re- ALSTOM is a world leader in transport in-
views and nomination committees, under the frastructure, power generation and transmission.
responsibility of the national managing direc- The firm is present in approximately 100 coun-
tor. Staffing decisions are made according to tries with sales (in 2011) of about 21 billion
the potential of individuals, as assessed by the Euros, and hires 100,000 employees in three
accomplishment of a mission and actual per- fields: power transmission (56%), grid (17%)
formance on the job, competences (seven L’O- and rail transport (27%). The group continued
REAL general competences plus technical its growth strategy in the BRIC countries, forg-
competences), employee aspiration, experience ing strategic relationships with local partners. In
and character. a 2010 interview, ALSTOM’s chairman, Patrick
Kron observed that “the geography of our mar-
The talent review focuses on the detection of kets is shifting and demand for systems, equip-
potential employees and their development of ment and services is changing with it. In
employees. The review has four objectives: 2009/10 emerging markets accounted for 35%
1) focus on individuals; of our orders. In 2010/11, that figure was almost
2) review and regular updating of the pool of 60%.”
potential talent for key positions; This global French company competes and
3) examination of individuals’ careers; signs contracts for an increasing number of proj-
ects in Asia (subway in Chennai, India; metro
4) identification of potential gaps for sourc- projects in Singapore and in the Republic of
ing the need of the different entities. China). Like many Western companies in this
This review takes place at least once a year part of the world, ALSTOM faces the challenge
and produces an individual talent review form of how to retain young Asians.
and a talent list. “L’OREAL talent manage- Its target: become a local firm with projects
ment program aims at providing individuals and operational teams. In order to carry out
with the conditions to develop their talent over these projects, the company needs to develop
the long term and generating most of the tal- Asian managers and train them according to
ents and competences necessary for the growth ALSTOM’s values. For that reason, ALSTOM
and development of the business.” A second has set up a specific talent management process
and complementary process involves nomina- focused on a training program, called
tion committees. The target of these commit- “GOAL” (Grow Our Asian Leaders). “Many
tees is to organize mobility. In other words, young Asians try to know how much discrimi-
they focus on key jobs, fill vacant positions ac- nation is in the company and if the company
cording to the short-or medium-term, and es- treats its nationals the same as the others. They
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The shift in talent management for French MNCs in Asia
want to know what kind of future they can have – A project-based active learning process
at ALSTOM if they stay more than 3 years. That where cross-cultural groups of 4 have to
is why GOAL, our talent management program work on a project for one year under the
is a great example demonstrating our will to mentorship of a dedicated senior manager.
have one policy for everybody to be promoted This project entails inter-regional interac-
in the company, whatever country they come tion and research with French colleagues
from, ” said the Talent Management Director of horizontally and vertically within the hier-
ALSTOM South Asia. archy. The topic of this virtual work (each
GOAL has three objectives: (1) create an member lives in a different country) meets
Asian group of managers and initiate an Asian an important need for the French and the
network; (2) break the glass ceiling and demon- Asian headquarters and gives the employ-
strate that the firm wants to push Asian man- ees the opportunity to use their new net-
agers to become executives; (3) reinforce work and to develop close relationships
ALSTOM’s culture and develop relationships with all the people met.
with the headquarters in France. – At the end of the program, each group
The program concerns three groups of tal- makes a presentation in front of the Asian
ented employees: (1) added-value employees board, with representation from headquar-
whom the firm wishes to assist in charting their ters in France.
in-house career path; (2) indispensable special- The first session of this program turned out
ists with strong technical skills; (3) high poten- to be a real success. “People were positively sur-
tial employees who could reach senior posts or prised to have so many benefits from this pro-
become executives in the short or middle term gram. For example, they improve their internal
(4-8 years). The first GOAL session took place social network and they understand French cor-
from 2009 to 2011and involved 12 people from porate culture better.” Eleven out of twenty peo-
all Asian countries. ple were promoted and changed their positions.
The content of this program has been de- For example, in finance, this program helped
signed as follows: create a talent pipeline. In fact, the trainees have
worked in different Asian countries and have
– A personality inventory test (MBTI: Myers improved their analysis and forecasting skills in
Briggs Type Indicator) to help people be this complex and very demanding field, accord-
aware of their strengths, their improving ing to the human resources department. Some of
axes followed by drills to drive their Emo- them have been sent, or ‘expatriated’, in Europe
tional Intelligence in order to improve re- for three years to reinforce their technical skills
lationships with others; in power transmission. Another strength of this
– A leadership workshop to bridge Asian and talent management program lies in its ability to
Western cultures that can be distinctly dif- facilitate job transfers from one sector to another
ferent; for transferrable skills (excluding technical
– Different workshops designed to reinforce skills).
specific managerial technical skills such as In terms of retaining young Asian talent, AL-
media-handling skills, presentation skills, STOM relies on the originality of its GOAL
etc… “For example, we want to teach program and HR executives are convinced that
young Asian talent how to use their emo- an HR differentiation is directly linked to low
tional competencies because in an interna- turnover.
tional and cross-cultural context it seems a
real asset.”;
– An educational visit to the French head- 3. RESULTS, LEARNING
quarters in order to strengthen their in- AND DISCUSSION
house network and to be committed to
sharing the vision of the top executive In what follows, we provide an overview of
team; the main practices of these firms as well as high-
– Visits to various work and business excel- lights of the main lessons to be learned from the
lence centers to gain a deeper understand- three cases. We also suggest topics for further
ing of the business; discussion.
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The shift in talent management for French MNCs in Asia
to be aligned to new constraints specific to these mar-
3.1 Results from the cases
kets. The three cases confirm the above statement. In
Ready, Hill, & Conger (2008) claim that emerg- order to manage the issue of a shortage of talents in
ing markets pose special challenges for foreign multi- Asia, DANONE, L’OREAL and ALSTOM have pro-
nationals and the talent management process needs posed similar answers:
Table 2: Overview of Asian Talent Management Programs
DANONE L’OREAL ALSTOM
Date of entry in Asia 1997 1993 1992
Industrial projects
Activities Health food Consumer goods
(Transport, power, grid)
New Zealand, Australia,
India, North Asia (Japan,
China, Hong-Kong, India, For transport: China,
Countries under South Korea, China),
South Korea, Taiwan, Hong-Kong, India,
the responsibility South-East Asia (Indonesia,
Singapore, Malaysia, South Korea, Taiwan,
of the regional HR Malaysia, Singapore,
Indonesia, Australia, Singapore, Malaysia,
in Asia Thailand). For dairy
new Zeeland, Thailand Indonesia, and Australia.
activities: (Middle East
and South Africa added)
- HR Project: recruitment,
salary management,
HR project, supports
the Project, reports
to the country
HR hierarchically
- Country HR: staffing
- cross-corporate HR management of all projects
for all activities - HR country across sectors (Transport
- in each business - HR international sector, Power sector, Grid)
Fields of responsibilities
division in Asia, recruitment within the country.
between regional HRM
there is an HR Director at a corporate level Optimizing HR manage-
and country HRM
- China : « HR shared - HR international talent ment between countries.
in Asia
service » in charge development Reports to the Country
of recruitment, learning, at the corporate level President operationally,
resources development and to the DRH
Asia-Pacific hierarchically.
- HR Director Asia-Pacific
Reports to President
of Region operationally,
and to the International
HRM Director
in France hierarchically.
Active policy of contacts
with universities
Development
Develop
Leadership program
Target of the Talent Attract, develop Compensation
Assign talent to Position
Management program and retain Asian talent Promotion
of greater influence.
Acculturation
to the company
and its business.
Talent management
HR Asia International HR Director HR Asia
decision-making
BO Le GOAL
TRUST FIT International mobility
Campus of Universities Campus of Universities Project leader
Brand image ‘Serious game’ Challenging
Talent management
Coaching Worldwide training Emotional competency
program and tools
Mentoring Assessment center assessment
Local task force Challenging Cross-cultural projects
Empowerment Mentoring Breaking the glass ceiling
Roadmap Talent review form
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The shift in talent management for French MNCs in Asia
– Creating a specific talent management leave a firm: 1) after 1.5 years; 2) after 3 years;
model for Asia 3) after 5 years. To retain talent, some compa-
A new model of international HR is appear- nies had the bright idea of putting these employ-
ing in emerging markets and more specifically ees into a training program (leadership
in Asia for MNCs. This model needs to align the workshop, MBA program, and executive MBA)
young Asian’s aspirations that are different from at these critical points and to make the talent
those of the young Westerner. sign a letter in order to keep them for two or
more years.
Attracting, developing and retaining young
Asian talent could therefore focus on targeted
actions such as:
3.2 Learning from the cases
– Focus on young, potential graduates
while they are still at university First, these three major French MNCs have
To draw upon a deep pool of young talented obviously adopted the concept of talent manage-
employees, firms develop tight relationships ment. They all label their initiatives with this
with selected universities. They try to identify wording that is supposed to be a disruption in
graduates in the same field as their activities and their HR policies in Asia. Although it may be too
create a process of integration (internship pro- soon to tell whether this constitutes a genuine
gram, workshop, sponsorship, student ambassa- breakthrough, it is at least related to a perception
dor, business case study, award and reward). of a dramatic change in the context of their tra-
ditional HR policies.
– Communicate about international Second, companies consider talent manage-
mobility ment in the same priority as issues of attraction
The possibility of an international assign- and retention. That concurs with what the major
ment may appear to be a great advantage in the academic books (Boudreau, 2010; Cappelli,
job proposal made to Asian talent. Even if some 2008a) or practical handbooks (Berger &
studies (Schmidt, 2011) emphasize that nowa- Berger, 2010) argue as another order of priority
days, the trend is for Chinese men to prefer to in HR topics in the context of what could be tal-
be re-located within their own country. ent management.
– Target a long-term career without Third, these three case studies demonstrate
the glass ceiling that a large variety of policies and practices may
be found under the umbrella of the same so-
If Western firms wish to win the talent battle
called TM approach. Across the companies,
in emerging markets, their HR approach should
these policies may cover training programs as
be reshuffled to take into account cultural speci-
well as a compensation and career-management
ficities and local requirements. Removing the
policy.
perceived glass ceiling seems relevant. How-
ever, this is not a new way of managing. Indeed, Fourth, this variety of policies could be pre-
many American MNCs active in Europe have sented as an escalation of policies from the de-
pushed a European CEO to the head of their velopmental approach (with a training program)
business unit. This must be an ongoing, logical of ALSTOM, to the broader scope of
process, though. DANONE’s policy (attraction, retention and de-
velopment) and L’OREAL’s more consistent HR
– Increase the salary policy that encompasses development, career-
In Asia (and more particularly in China), the management and compensation. This difference
level of salary increases regularly and reaches in the scope of TM policy has to be related to
the Western level for skilled personnel. The the differences in their respective businesses.
struggle with the public sector and with expatri- ALSTOM is settling in Asia according to the
ates has raised standards. To compete, firms projects it has to gain there and to implement if
need to be aligned with the local companies and successful in bidding. DANONE has a strategy
to propose a significant increase. in Asia that is very different according to its
product divisions and countries. Therefore, the
– Build a tactical training policy BO Le program is clearly associated to the com-
Studies have indicated that there are three pany’s business strategies in China and Indone-
dangerous points when young employees may sia. In the case of L’OREAL, its presence in Asia
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The shift in talent management for French MNCs in Asia
goes back quite a while. They are operating with
Conclusion
famous brands in a market of consumer and lux-
ury products with a genuine effort of a regional By addressing a brand new issue that French
policy. MNCs face and by trying to decipher the emerg-
ing policies and HR approaches, this article
opens up several perspectives that are of the ut-
3.3 Discussion most importance for human resource manage-
ment.
Interestingly, the presentation of talent man-
agement for these three French MNCs makes it First, the study provides a good illustration
clear that the emergence of talent management of how companies adjust their policies to their
cannot be considered outside of a local and busi- context by breaking or changing the traditional
ness context that varies from a company to the rules of HR policies that would be directly man-
other. Although it may have been considered a aged from the top within the framework of a
fad by some authors (Pigeyre, Dietrich, Gilbert, global unique strategy. That raises one of the key
Aubret, 2010), talent management in our exam- questions of international human resource man-
ples is a way of putting a name on practices and agement: the organizational issue of who should
policies that are pretty new for these companies, do what and where.
either in Asia or in the mother country. Second, the rising problems encountered by
It will be interesting to follow up on these French MNCs in the Asian region exemplify the
companies in the future. This is truly the situa- new type of dilemma that companies must con-
tion of a region where MNCs see their growth front when their reputation is not sufficient to
potential but may face greater difficulties in con- generate enough applicants and to find employ-
fronting local competition. All in all, we are ees who will be more ready to espouse the poli-
cies and culture of the company. Clearly it is
probably seeing a signal of what the economic
easier to manage HR when you have a positive
and HRM situation of these companies will be.
and powerful reputation, like that which these
We can then imagine that, in a kind of rebal- companies have traditionally enjoyed so far.
ancing of the regional activities of these compa- Having new perspectives is thus important when
nies, the challenge of staffing and motivating a corporation seeks to develop its brand as an
Asian staff may help companies to change their employer.
HR policies worldwide. What is happening to
Third, another perspective opens here and re-
these companies in Asia is totally new and will
lates to the issue surveyed; i.e., the risk of not
generate a kind of cultural revolution in how HR
succeeding in their new approach to local talent.
is considered, just as the difficulties of the busi-
What happens if these policies do not succeed?
ness challenge could trigger the more strategic
What can be done, then, in terms of HR policies
approach in HR that has been proclaimed by
to sustain business growth in this part of the
scholars for so long.
world? With respect to Asian talent, there are a
This survey has presented three limits that few ideas to explore. First, firms could adopt a
further research will necessarily compensate. targeted approach for women, who represent a
First of all, it would be interesting to increase highly skilled group. For example, Google
the sample size in order to be more specific launched the India Women in Engineering
about the connections between these HR poli- Award in 2008 with an award of US$ 2,000.
cies and the general strategy of the companies. Second, MNCs explain to young candidates that
Second, given that this research has been con- they can build a strong network with a first job
ducted in real time with the implementation of in their company. This target is reached through
these policies, we are unable to evaluate in the coaching, mentoring approaches and business-
mid-term the real effectiveness of what has been centered projects realized in a cross-division
implemented. Third, it was helpful to compare team (for example in General Electric with “my-
French multinationals; however, it would have Connections”, a talent-spotting and mentoring
been significant and enriching to compare their program in the United Arab Emirates). Third,
policies to those of other multinationals in the companies could try to adjust to the cultural val-
same region or even in other emerging regions ues and current way of life. This might mean
around the globe. proposing a package that allows an employee to
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