The Expat Conundrum

By Andrew Wood, Senior Consultant, Asia Talent

With so much talk about the Eurozone Crisis and the threat of a double dip recession in the US, the global research industry is looking more to Asia for growth and for new investment opportunities.  As seen in the last two recessions, Asia has rebounded much stronger and much faster than other regions.  Singapore recently reported growth of 19% in the second quarter year-on-year, the fastest in Asia.  China is also back to its ‘usual’ 10%+ growth rates.

As the research industry in Asia matures, the supply of local staff steadily improves with those graduates recruited in the early to mid 2000’s now taking the middle level positions.  In Singapore for example the recent Asia Research salary survey shows that 60% of middle managers in Singapore are now local, a rise from around 40% in 2008.

However, companies still need to rely on expatriates for more senior level positions.  In Singapore, locals currently make up 40% of senior positions although this does represent a slight rise from about 30% in 2008.  But still, 25% of senior positions today are occupied by expats from the West, 15% from India, and the remainder from other origins.

Asia is becoming more discerning in their recruitment of expats.   Ten years ago if you could speak English and stand up sober at 9am, you could get a job.  Today, those researchers seeking an escape from ‘austerity Europe’ will find a difficult route to Asia without prior experience of working in this region.  Cultural sensitivity and the ability to work long hours in challenging environments are now more strict pre-requisites for recruitment for which a proven track record in Asia will demonstrate.  Due to high levels of competition in what are still quite small markets there are far higher expectations of senior managers for salesmanship skills.  This can be a powerful ‘saving grace’ among those whose cultural sensitivity is still lacking – examples still exist!

So as a result the rate of recruitment from the West to Asia has fallen significantly and a lot of expat recruitment we see today is intra-Asia, e.g. recruiting an expat already in Singapore for a position in China, etc.   Another avenue that companies will consider is the return of expats to Asia, some of who might have held middle management positions in Asia in the 90s, went back to Europe in the 2000s, and in this decade are now looking to return to Asia in a senior position.  This can be an attractive option for those whose children have already gone through schooling and on to university, and thus giving these them more flexibility to relocate back to Asia without the burden of international school fees.

Although the full expat packages, e.g. schooling and home passage, are mostly long gone, absolute salaries for senior positions for both local and expats are still very high, usually exceeding their counterparts back in the West.  The Asia Research salary survey confirms this and even shows rising salaries in some markets such as Singapore where living costs are rising.

The so-called ‘expat solution’ is still considered a necessary evil by many companies.  Expats still lack the local language skills and the knowledge of local brands, media, and Asian consumer psyche.  Clients themselves are increasing localized, and this trend will continue with the on-going exodus of researchers from agency side to client side.  Time will tell whether there will be a sufficient supply of local staff moving on to the more senior positions in Asian agencies.