The job-recruitment process varies somewhat depending on the company. Western MNCs tend to hire employees with international experience from other MNCs and established firms. They as well as Asian companies make use of headhunters, especially those that specialize in Asia. Asian MNCs and biotech companies frequently rely on their Asian network of contacts and on scientists at U.S. academic institutions.
The recruitment process is difficult and far from smooth. My interviews indicate that there is often a lack of due diligence. Western corporate executives often do not understand the differences between the business cultures of Asia and the West, nor are they able to evaluate the experience and relationships of Asian expatriates in their home countries. The expertise of an Asian in a Boston biotech company cannot be readily translated into the tasks of setting up a pharmaceutical joint venture in Chengdu, China, for instance. Individuals who can simultaneously function in two different cultures are rare and identifying and recruiting them is a major challenge.
Retention issues are, if anything, more daunting than those of recruitment. On the one hand, you have the growth of the life science industry and the resultant demand for experienced managers while, on the other hand, corporate structures do not encourage permanence or the creation of cohesive management teams in Asia. The result is rapid turnover. It’s estimated that at middle and upper management levels, average retention in Shanghai is only 1.8 years.
A number of factors play a key role in the retention/turnover issue:
1) Compensation packages. These have been rising rapidly. In India, for example, they could be up to 50%–70% compared to those in Western firms. However, Asian firms are less likely to provide such benefits as profit sharing, stock options, and perks like housing and educational allowances.
2) External income. Changes in compensation packages are an obvious way to promote retention. Close links to the local business community provide opportunities for additional income usually involving financial deals. Even when such situations might not involve a direct conflict of interest, they can detract from a focus on corporate objectives.
3) Promotion. Promotions represent one way to respond to competition, but they also carry the risk of raising individuals beyond their level of competence. Both Western and Asian MNCs have been active in participating in executive level training programs in collaboration with business schools.
4) Quality of life. This is a major issue for both Western and Asian expatriates. Most spouses/partners have careers that may be disrupted by a move to an Asian location. In many cases, the family may prefer the lifestyle of Western localities and wish the children to have the benefits of a U.S. education. It is not uncommon for one spouse to move to Asia while the family remains in the U.S. MNCs have had more experience with such situations and use flexibility in job assignments to resolve them. Turnover and rapid growth have made it much more difficult for Asian companies to deal with such issues.