Shortage in senior executives drives salaries to new highs

Compensation for top-tier candidates in Asia Pacific might have risen by 15% to 25% a year for the past five years.

The CTPartners Emerging Markets Trend Talk Report says that building and managing a talent base across multiple geographies, including mature and emerging markets, is a continuing challenge for global corporations. Emerging markets in particular present new hurdles, particularly a shortage of senior and specialized executive talent, even as regional operations are growing rapidly. Such constraints in the talent market drive salary inflation, in tandem with the upward wage pressure already present in rapidly expanding economies.

“Companies in Asia face stronger competitive pressures and uncertain demand in some sectors, and can no longer simply rely upon the rising tide to lift all boats. Increasingly, management teams are developing strategic plans and business models to differentiate themselves from increasing competition in emerging markets. To do so effectively, they will need to recruit and retain sophisticated senior leadership talent that can devise and implement their business strategies,” said Kathryn Yap, Managing Partner of CTPartners in Singapore, who boasts over 15 years of search experience in Asia Pacific.

“The ongoing demand for ever-more sophisticated and skilled executives means that compensation is being pushed ever upward. With the most desirable candidates often being pursued by multiple companies, salaries for these top-tier candidates might have risen by 15% to 25% a year for the past five years,” said Pagan Van, Managing Partner of CTPartners Hong Kong, who has more than 10 years of experience as a search professional in Asia Pacific.

"In any emerging market, the talent pool is tight. There are always more buyers for top talent then supply, which puts upward pressure on costs. In the financial services industry for example, this tends to mean that Asian bankers look quite costly versus bankers in London or New York," said Paul Aldrich, Partner of Financial Services Practice at CTPartners. Paul has 19 years of capital markets experience.

“We are also witnessing a trend towards talent localisation all across the Asia Pacific region. With almost every single new executive search mandate we oversee, the first preference will go to a local national candidate, and secondary preference to a regional executive with local language skills and cultural knowledge. The need for local expertise reigns supreme. Western talent are most commonly utilized to offer specific and highly technical functional best practices or product expertise,” says Train Luo, Managing Partner of CTPartners in China. Train has more than 15 years of executive search experience.

According to the ECA International Salary Trends Survey, salary increases across Asia Pacific in 2011 was on average 6%, with the largest increases being awarded to employees in Vietnam, India, and Indonesia, each with expected gains of 9% or more. Asia Pacific nations with the fastest growth saw the strongest salary boosts, owing to local skills shortages. Slightly slower growing and more established markets, such as Hong Kong and Taiwan, had a 3.5% average salary hikes.