Asian Business Families Focused On Talent Recruitment And Development To Secure Their Future

A new report by United Overseas Bank and the Singapore Management University’s Business Families Institute revealed that three in five Asian business families view talent recruitment and development as the main challenge to securing the long-term sustainability of their companies.

The report titled Riding on Asia’s economic transformation – Growth strategies of Asian business families found that Asian business families are countering this challenge by hiring professional managers from outside their families. These managers possess specialist skills in financial management, technology implementation and human resources to set up professional talent development structures.

Of all the markets surveyed, China held the strongest views on the need to establish professional recruitment and management systems. More than half of the Chinese business families polled indicated that they were investing in training, developing and retaining their talent pool. Asian business families also cited the importance of trusting their managers and treating them fairly as the top two ways to attract and to retain external professional managers. Remuneration was ranked third.

In Singapore, giving autonomy to external managers was deemed most essential for attracting and retaining them. Mr Eric Tham, Managing Director and Head of Commercial Banking, UOB, said, “Many Asian business families are at various stages of preparing for the next generation to succeed them and they recognise the need to have professional help to ensure that their business grows and remains competitive.” “These professionals hold the specialist skills that business families require for a more resilient and sustainable business in these uncertain times. They also help to nurture the next generation of family members through knowledge transfer, coaching and mentoring.”

“These professionals hold the specialist skills that business families require for a more resilient and sustainable business in these uncertain times. They also help to nurture the next generation of family members through knowledge transfer, coaching and mentoring.”

The report also found that more than 80 per cent of Asian business families place great emphasis on values such as commitment, integrity and trust which they have observed in their own families and which they believe underpin the long-term financial and strategic decisions made by their leaders. They therefore expect that professional managers working with them uphold a similar set of values. Singaporean business families most focused on maintaining stability and business continuity Four out of five Singaporean business families place the most emphasis on balancing growth with stability and continuity as opposed to short-term gains.

When it comes to taking risks on high return investments, Singaporean business families were found to be the most risk-averse in Asia with only 29 per cent of respondents using high-risk investments as a growth strategy compared with 37 per cent and 41 per cent of their peers in China and Southeast Asia respectively.

Professor Annie Koh, SMU’s Vice President for Business Development and Academic Director of BFI@SMU, said, “Our study shows that while Asian business families have big ambitions, they have conservative risk appetites. This reveals that Asian business families tend to favour stable returns over riskier growth and expansion options. Instead, Asian business families are using innovation to improve product quality and drive cost reductions in order to achieve sustainable profits in the world’s most economically dynamic region.”

The study revealed that Asian business families innovate to reduce the consumption of raw materials (82 per cent), to lower the cost of production (82 per cent) and to improve the quality of their products (80 per cent).

Conducted by BFI@SMU between November 2014 and July 2015, the research report shares insights into how Asian family businesses perceive, build and grow entrepreneurship in family businesses. It also offers a comparative analysis of entrepreneurial activities as well as succession planning involving professional managers in Asian business families across different countries.

A total of 192 respondents from seven Asian countries, namely, China, Indonesia, Malaysia, Myanmar, Philippines, Singapore and Thailand participated in the survey.

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