Not so diverse?

A recent WSJ article brought my attention to the old gripe of foreigners being kept at all the top positions in MNCs in Asia. The article discusses the fact that most MNCs still rely on expatriates to fill their top jobs despite being in the region for many years and despite having an abundance of talented local workers to choose from.

The author notes that while multinationals should be relying on local talent for on-the-ground skills and unparalleled knowledge of local market and consumer trends, 40% more Westerners are still clinching the CEO-type roles in the region compared to other roles.

For instance, only 3 out of 10 global banks have Asian-Pacific or Asian CEOs, and the figure dips down to 2 for the top 20 global asset management firms!

This is a particularly sensitive subject that many HR professionals and executives avoid discussing, but I really feel it should be addressed to set the record straight.

As studies have shown, less diversity at the top can be bad for business. Plus, this syndrome of “foreign workers are better than local workers” goes against the very principles of equality and meritocracy we work so hard to instil in our communities!

I mean, come on, when Westerners are being hired to wear suits and create a sense of security in Chinese businessmen, you know something is definitely wrong!

After all, why work and prove yourself when you can just be Westerner, right?

So why are Westerners still perceived as more capable or competent than their local counterparts? Is this “tradition” due to cultural differences, talent shortage, or just pure and simple discrimination?

One possible explanation could be our inherited colonial system of foreign administration.

When the British ruled Singapore and their other Asian territories, they practiced what historians and anthropologists call “indirect rule”. As Wikipedia notes, this form of colonial administration worked in a fairly simple way: “the laws were typically made by a British Governor and legislative council, but in the protectorates and princely states local rulers retained their traditional administrative authority and ability to legislate, subject to British control of certain areas.”

Clever, right? Basically the colonial powers retained all control over their claimed or conquered territories by creating a class of ruling local elite.

This local elite was usually controlled not by force or threats, but by a vested interest in the colonial power’s enrichment; in exchange for their loyal services, local administrators received property, privileges, status, honorific titles, foreign education, access to forbidden products, etc.

Following this logic, what happened when Singapore and other former colonies got their independence was that foreign and powerful MNCs took over and perpetuated the system of a capable foreigner (CEO, CFO, etc.) coming here to make the rules while the local elite (executives, employees) follow the guidelines.

But if the preference for Western top executives was only the product of this antiquated system, wouldn’t it all crumble as soon as local talent proved to be just as competent, capable, and productive than foreigners?

Which brings us to a second possible explanation: maybe there’s an Asian talent shortage, and no matter how hard you look, you just can’t find any really talented local executives.

Are we really less skilled and less experienced than foreign-born and foreign-educated people?

It could be argued that Westerners have a different education system, one that focuses not only on passing exams and beating others to the finish line, but on discussing ideas, creating solutions, and questioning the rules.

True, in that sense, there’s definitely a lot more we could be doing to foster risk-taking and creativity, two very important characteristics of successful businessmen.

Another key factor is the fact that Westerners are encouraged to be autonomous both in their personal upbringing and in their school work; whether it’s travelling, taking on new assignments, working in groups, or just simply taking the time to find their true calling, Westerners have many more opportunities to develop new and edgy approaches to problem-solving, whereas we are constantly told to not make trouble and not stand out from the crowd.

But then why aren’t foreign-educated Asians making the headlines as big shot executives in foreign companies?

Well, actually they are! Or rather, some of them are.

In 2009, it was pointed out in Forbes that there were 8 Indian CEOs at Big U.S. Companies. Among the 8 corporate giants, PepsiCo, Citigroup, Harman International, and Adobe Systems are common household names.

So what does that mean? Why are Indians capable of taking over foreign MNCs while we Singaporeans, Indonesians, Malaysians, and other nationals are kept at bay?

According to the Forbes article, the two important factors are the fact that they arrive in the US already speaking English (no language barrier) and the fact that their education is recognised as top-notch no matter where they go.

But hey! English is also our official language! And our schools are also recognised the world over! So what gives?

To be perfectly honest, I think the issue lies more with our capability to adapt and not with our capability to shine.

Many of us love the comforts of Singapore. The food, the weather, the infrastructure, the security, etc. Many of us wouldn’t dare move abroad unless we were guaranteed to have some or most of these elements in our new home country.

That’s why many of us go to Australia to live and study; it’s not too far from family, it’s sunny, it’s secure, it’s fun, and it’s just exotic enough to seem like a challenge but not too exotic that we feel threatened.

Westerners and Indians, on the other hand, don’t mind taking a risk if the pay-off is potentially more interesting than staying home and doing the same-old same-old.

Move to a small little island-country where gum is banned and the sun burns your sensitive skin? Sure, why not, let’s see what happens! Take your spouse and family to a remote location you didn’t even know about to try a new job? Sure, I’ll give it a shot!

Admit it, how many of you would take such decisions if they could potentially impact your family life, career, or sense of security?

Of course that’s just my analysis, I may be wrong!

So how do we make sure none of our local talent goes unnoticed if we can’t change people’s priorities or aversion to risk?

Perhaps the new Singaporean-first HR policy mentioned by Finance Minister Shanmugaratnam during the Budget announcement could be applied to help serve Singaporeans first?

Daniel Yap wrote a thoughtful piece called “Minimally Invasive Labour Market Testing” about the matter. His guess is that the new measures to ensure fair hiring practices here could take some form of labour market testing that requires companies to prove they have made reasonable effort to place a resident in the job before considering foreigners.

That could work!

At the heart of it, Singapore Management University (SMU) economist Augustine Tan says, the issue of controlling skilled foreign labour is “one of balancing the needs of companies against the interests of Singaporeans”.

It’s a delicate balance, and whatever resulting legislation or policies would need to consider the needs of multinationals while ensuring the protection of local PMEs.

 

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Najib A.

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1 Comment

  • From what I see, the only way out is for local startups to rise to MNC. Let’s face it. Companies are no different from human beings. They will hire someone familiar. Talent is never a problem cause capable people are everywhere, regardless of skin colour

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