· 2 min read · Features

The growth and demands from emerging markets make HR leaders more vital than ever in global companies


In the past, the HR director has often not been a full member of the executive team, has not sat on the board of his or her company, and his or her biggest interaction at board level has involved compensation and employee relations issues

There is clear evidence that HR leaders are now being taken more seriously at board level. The role of HR is escalating in importance. This change is in no small part due to the leadership and talent challenges presented by growth in fast-maturing emerging markets, which is simultaneously creating complexities that are giving HR heads the strategic experience and compelling them to respond to challenges that are vital at the highest level of business.

Western businesses have been in emerging markets for decades but rapid economic growth in recent years has led to a significant change in the the prevailing people challenges faced.

Business growth in emerging markets has produced excellent young local talent which is now replacing expatriates and, not surprisingly, has some fundamentally different career expectations. The dynamics of attracting and retaining talent are shifting so fast, companies need to be incredibly creative and flexible to keep up. This is reflected in areas such as compensation and benefits, which cannot be "one size fits all". In Asia, for example, long-term benefits have limited appeal in a society where "cash is king", but are much more highly valued in Latin America.

What is common, however, is the drive for career development. Rapid business growth means career development cycles are different in emerging markets, with employees often taking less than half the 'normal' time period to be exposed to complex business issues. The pace gives young emerging talent the opportunity to gain exposure to a broad array of issues. Companies that take their talent issues seriously are responding to this by investing in practices that support the pace of this development.

In the past, western multinationals were often competing against each other, with little competition from the local national companies. However, the 'war for talent' has now expanded to include local multinational companies that are learning fast and are developing sophisticated HR strategies themselves, so global companies need to be more innovative in the way they attract, integrate, retain and develop their human capital. HR needs to be conversant with different markets and able to adapt policies to take account of local cultures and expectations, while still being able to instil global thinking.

In order to do so, global HR leaders need to differentiate their companies based on what's important locally. Many organisations are doing things like setting up virtual universities or leadership development programs in the emerging markets. Another response is to ensure the HR team on the ground has the ability to promote talent from emerging markets to the more mature markets.

For example, in Asia, many multinationals have sought to hire a local as a number two as part of a succession planning approach. However, experience has demonstrated that these candidates would more than likely have moved on to a new position elsewhere before their opportunity arises to take the top role, so sideways international moves are being deployed as both a development and retention tactic with the expectation of moving the candidate back to their own country in the top job later.

Western multinationals have made HR a more integral function to the strategic imperatives of the organisation in recent years. As growth stalls in traditional markets, ensuring they can attract and retain the best talent in the emerging economies is a fundamental building block on which companies can drive growth.

These challenges have also encouraged HR practitioners to demonstrate both nimble thinking and a detailed knowledge of new, local markets. This "learning agility", the ability to adapt one's experiences and skills and apply them in new environments, is hugely sought-after and is now a critical competency of current and future HR leaders in similar way that it is for all leaders of the future.

It is this combination of learning agility, international experience and involvement in key strategic issues that has helped HR make an increasingly measurable impact on business, and that will make more global HR heads integral members of any management board in the coming years.

Ellie Filler, managing partner chief HR Practice EMEA, Korn/Ferry International