AltoPartners: Executive Search in Emerging Markets - Adapting Strategies to Address the Challenges

As the world becomes ever-smaller and more connected due to the rapidly changing business landscape, clients need creative, adaptable and decisive executives that can lead fast changing and dynamic organisations. Companies are becoming very creative and aggressive in their retention strategies, particularly when top talent is limited and companies know that it is more efficient in terms of business continuity to retain an executive than to replace them. The war for talent in emerging markets amplifies the complexities of multinational companies doing business, and succeeding, in these markets. AltoPartners explores the role of Executive Search and Leadership Consulting in emerging markets with unique insights into specific market factors from across our global alliance.

The dynamics of the hiring process are not all that different in emerging markets than in the rest of the world. However, there are a number of challenges that underscore the nuances of hiring in these markets. An understanding of the unique complexities of the market are vital and too often, established multinational companies enter an emerging market with the view that ‘what worked in developed economies will work in emerging markets’. But, this is not the case and many multinational companies have experienced failures due to a fundamental lack of understanding of the market they are entering.

Local Market Expertise vs. Shallow Talent Pool Reality

From India to across the African continent to Colombia and Chile, there is agreement that the overarching challenge for multinationals hiring in an emerging market is a lack of understanding of the local language, culture, context and environment. Additionally, the war for top talent is even more intense in emerging markets because the specific skills needed may not be available in the market. The markets in India and across the African continent have a shallow pool of experienced international level talent across industries, particularly with prior multinational company experience. In a country like Chile, which is a small country of approximately 17 million people where one third of the country’s population is concentrated in the capital city of Santiago, companies specifically look for local market expertise in their management teams; bringing someone from abroad is usually not an option.

Local markets want local employees and leaders and there is a move away from having expats in leadership positions. When multinational companies first set up in emerging markets, they often send expat teams in on a short-term basis to help with transition and to build up the local team, but the emphasis remains on locals in leadership positions. In this context, candidate retention is growing ever stronger. For executive search consultants, enhanced focus on the ‘research and identification’ part of the search process, and importantly, the ‘negotiating and closing’ stages are crucial for success. This is where the true value of executive search consultants is evident.

But, at times, finding the right talent calls for a search process that goes ‘out of category’ to find people who may not traditionally be from the sector they are recruiting for but who possess the right set of complimentary skills and the specific market knowledge needed. Family-owned businesses and entrepreneurial mind-sets are very common in emerging markets and form a source of viable, younger and interesting candidates. Often, the local talent that is needed and required isn’t currently in that country, so companies need to make compelling offers to attract the talent back to the country. And increasingly, it is not just about the financial incentives that bring the talent back. This is when using an executive search firm that has a global footprint with access to a global talent pool is so crucial.

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