The Challenges of FM Talent Recruitment & Retention

in Asia

Victoria EvansDivisional Head, FM

James StephensonDivisional Head, CRE

by

• Ability to identify and assess current recruitment and retention issues

• Understand reasons for variations in recruitment and retention rates in FM across Asia

• Apply knowledge of variations to improve present recruitment and retention rates

• Integrate ideas at senior and middle management level as well as the general workforce, to align business and employee objectives

Profit Making Organisations

• Make Money

• Save Money

• Save Time

• Enhance Reputation

• Survive in the Marketplace

FM ChallengesEmployee expectations

o In-House v Service Providero International Brand v Local Enterprise

Talent War (China Jobs) 60% : Chinese enterprise over multinational (Manpower) 64% management offered last 18 months (MRI China)

o Focuso Reputationo Status

FM Challenges• FM skills shortage – Global / Regional / Local

Rapid expansion – demand v supply

1.33bn China, 1.15bn India : < 20% skilled workforce

• Technical

MEP, Workspace, Projects

• Soft skills

Management, client facing, ability to challenge

• Junior – localised, language, training & support required

• Mid – need for internal movement “through the ranks”, competitive

• Senior / Exec – comparatively fewer domiciles in RE within international brands, ex-pat packages costly but declining in frequency

FM Challenges

• Difference in Property Management & FM 物業管理

• Education

• Access to Facilities Management as a career choice

• Comparatively young industry; publicity of FM relative to other industries within and outside of real estate

• Changing thought process – “serve the customer” - a necessity, not just an expense

FM ChallengesEmployer expectations

International education / experience

Local language skills & cultural understanding

Bi- / Tri- Lingual

Polished, client-facing, professional, communicative

Technically strong

Stable work history

Strong people managers

and above all…

CHEAP!

FM Challenges• Business v Conversational Language skills - FM has diverse mix

of domicile employees and ex-pats (Western & Eastern)o Top international bank have a 15% uptake of language courses

• Location – 1st, 2nd & 3rd tier citieso 2011 – 60% of companies in Tier 1 cities planning to hireo 70% of companies in 2nd & 3rd Tier cities planning to hireo Expectation to employ in India & China cheaply: but living costs

rapidly rising

• $ ¥ - Rapid title promotion & pay acceleration (faster than mature markets)o Average 5 % across Asia, but up to 15% in China pao Counter offers (HK 20%, BJ 30%, SH 40% - short term fix)

• FM not fee generating – can be difficult to justify headcount

Cost to the business…Ex-pat contracts extended at high costs

Service provider penalties

Delayed projects

Higher attrition rates

Demotivated, stressed staff

Poor brand image

High recruitment & induction

costs

Unachievable workloads

So, what can we do…

• Increase productivity by realising aims & objectives of the business

• Better align employee motivations and company goals

Personally benefit from company success

4 year cycle

1. Learning

2. Become a success

3. Boredom

4. Move

Succession planning, offer variety & growth opportunity

So, what can we do…

• Salaries – in line with living costs, country averages and availability of skills

• Recruit the best – Value v Cost

• Start early – schools, colleges & universities

• Share information

• Take advantage of availability of European, US & ME talent pool whilst

economy is recovering

Employees Value…

• Skills shortage in buoyant market

• Candidate has control

Reward not linked to performance related or individual input – US direction, employees feel unstable; no loyalty

M&C salary survey 2010 reports 24% of respondents looking to move

within 12 months

In China, 40% of people born in the 80’s are considering starting their own business (China Europe Business School) – encourage entrepreneurialism culturally to retain the best

RFL ComparisonAsia UK

83%, 2010

77%, 2009

64%, 2010

67%, 2010

37%, 2010

Employee Satisfaction• Employee Surveys – invasive?

• Appraisals

• Performance Management

• Training & Development

• Motivating Employees

Management Style – No. 1 reason for joining

Reward & Recognition

Workspace : 10-15% retention difference over 5 years: investment required (Ascendas)

Workplace investment increases productivity and retention rates

Not at all, 4%(-2%)

Not very, 19%(=)

Fairly, 59%(+ 6%)

Very, 18%(-4%)

Job SatisfactionASIA

UK

ME

Regional Differences• Geography – languages, local cultural differences impact perceived “suitability”

• Quality of life, cost of living, education vary

• Competition heated between HK & Sg

o Cheaper in HK: reversal of 2010

o Shortage of quality housing

o HK Govt slow response to air pollution affecting desirability to work, live and raise family

• Candidate expectations can be much higher for less appealing locations

o Non- Tier 1 often lower budgets; greater reliance on local talent pool

 Asia Rank 2011

Asia Rank 2010

Global Rank 2011

Tokyo 1 1 1

Nagoya 2 2 3

Yokohama 3 3 5

Kobe 4 4 9

Seoul 5 5 22

Singapore 6 9 36

Hong Kong 7 6 45

Beijing 8 8 46

Shanghai 9 7 47

Busan 10 10 64

Taipei 11 12 66

Ulsan 12 11 76

Guanzhou 13 13 89

Kaohsiung 14 15 97

Jakarta 15 16 102

Shenzhen 16 14 103

Bangkok 17 23 136

Shenyang 18 18 139

Astana 19 17 143

Tianjin 20 20 144

AsianCorrespondent.com, ECA Int

Regional Differences

Average Base Salary (USD $k pa) by Region

Regional DifferencesHow important are each of the following in your job?

ASIA UK84% 2010

77% 2009

90% 2011

Retention V Recruitment:the real cost to your business

Recruitment• Advertising no guarantee but

good brand exposure• Recruiters / Head-Hunters % of

salary (One top SP spends 33% rec. budget on HH in 2010)

• Time – Line Management, recruitment not core function of their role (3-6 months to recruit)

• Inductions & time to “bring up to speed”

• Cost of not having the person in post

Retention • Training & Development• Annual pay increases (5-15%)• Satisfaction monitoring (survey)• Appraisals & performance

review• Counter Offer – short term

measure 20-40%

Integration is key…

• Top-to-bottom buy in• Employees as

ambassadors

• The caring company• People are assets

PPM for your employees!

• Salary is not a motivator, but is a de-motivator

Summary

• Recruiting & retaining FM skilled employees in Asia is tough!

• Time to develop the industry in FM

• Become an employer of choice now!

• Appreciate your employees

Macdonald & Company Salary Survey – September 2011Business card drop at the end of the session to participate and receive results summary

OPEN DISCUSSION

ReferencesECA Cost of Living Survey. Cited: Asiacorrespondent.com

Multinational companies losing the battle for local talent in China. Cited: China Jobs. http://www.linkedin.com/groupItem?view=&gid=2914122&type=news&item=583157678

Gupta, V. India's Skilled Labor Supply: Myth or Reality? Towers Watson Technical Paper No. IND8009. Towers Watson, December 01, 2007

Gilleard, J.D. PhD. Facility management in China: an emerging market. IFMA

Macdonald & Company Salary Survey (Asia, UK, Middle East). 2009, 2010, 2011.

Macdonald & Company www.macdonaldandcompany.com