Global firms hire locally to be more competitive

The rising profile of emerging markets as key to the success of retail and consumer multinationals especially in the wake of the global financial crisis has triggered a new hiring trend.

Multinationals are increasingly employing managers who understand the local culture and giving preference to qualified natives of the countries in which they do business, according to a report by PricewaterhouseCoopers (PwC) and the Economist Intelligence Unit titled 'Building to win: How multinationals are structuring to compete in emerging markets.'

This new trend is in a bid to ‘act local’ in the market, although, according to executives polled in the study, the same rule does not apply for managers operating at regional head offices.

Executives think that “it is more important to staff the regional headquarters with executive talent of the right level of seniority and with a global, rather than local, outlook, ”says the report.

A further finding is that although retail and consumer products companies have created strong employment brands in emerging markets and are highly sought after by job seekers, talent retention and leadership issues are among the biggest challenges for they face.

False assumption
“There is a perception, mostly false, that staff in emerging markets will jump company for a small pay increase,” says the report.

In reality, it appears that “money talks, but not as much as development opportunities and career advancement.”

According to the report, multinationals are increasingly opting for restructuring as a strategy to grow their businesses in the face of the financial crisis.

“As developed markets enter what appears to be a protracted period of uncertain economic times, the importance of emerging markets for multinationals will only increase, ” says Nancy Onyango, consumer and industrial products and services leader at PwC.

“Many are already reorganising themselves to take their emerging market penetration to the next level.”

“Regional offices are established to provide strategic direction and planning support, develop talent for the region and evaluate new opportunities for property acquisitions or new market entry.”