Mapping Global Talent: Essays and Insights - Heidrick & Struggles

1
Industrial
The tale of
two worlds
Dale Visokey
Industry practice
dvisokey@heidrick.com
Heidrick & Struggles Mapping Global Talent: Essays and Insights
Top-flight graduates will be harder to lure
into the industrial manufacturing sector
over the next five years. Recruiters who
understand this fact will be at an advantage.
The reasons are simple – the global manufacturing
sector will grow at a relatively slow pace over the next
few years, led by strength in emerging markets. Global
passenger car sales, for example, will rise by an average
of only 3.5% per year until 2012 and the increase will
be driven by demand in China and India. Sales in the
developed world will remain disappointing; with the US
market set to stagnate and those in western Europe and
Japan expected to grow by a modest 2 to 4%.
The energy sector will exhibit similarly low-key
growth with global energy demand per head expected
to average 2.4% per year over the next few years.
Slower demand will be the result of high prices and
an increased move toward energy conservation in the
developed world. There will be a similar story in other
major industrial sectors.
Given this trend, traditional manufacturing industries
and energy companies will need to tackle their less
than sparkling growth profile head on and wring as
much talent as possible out of emerging markets. One
tactic will be the establishment of local training units
in the fast growing markets. In China, for example, the
logistics firm DHL has already set up its own
Logistics Management University, which teaches
new recruits everything from courier business to
supply chain management.
The downside, however, will be losing staff almost as
quickly as they are trained. “Multinational operations
in China must contend with a 20 to 30% annual
staff turnover rate and recruit 1,000 plus employees
annually,” says Indranil Sen, a Vice President for
strategic intelligence at DHL. “With two years’
experience in logistics, many employees will job-hop
and start work for another firm, the incentive being a
50% pay increase.”
In the developed world, manufacturing companies
can retain trained staff if they are willing to give
international opportunities to their top performers. And
this trend will be seen all the way up the management
structure. In a recent survey of US and European CEOs
by the Economist Intelligence Unit, 60% of respondents
said their senior management teams will become more
international over the next three years. Opportunities
for senior management in the emerging markets look
set to grow – Chinese automakers, for example, will be
keen to hire Western managers over the next five years
as they begin to expand into foreign markets.