John Chen

THERE is a shortage of highly qualified local human capital, especially for many top-level management positions, despite the fact that Malaysia has been consistently producing many talented people, according to Foster Partners South East Asia managing director, John Chen.

Chen, who is in charge of the region's operations for the executive search services firm, said that there were gluts where skilled workers were lacking, but that was also dependent on the business cycle.

"Shared services in the financial sector has grown largely in the past two years, so there is still a great need for executives there.Information technology is the same.A lot of the growth in the positions needed stem from the fact that players in the financial and medical sectors want to expand to South-East Asia," he told StarBiz in an interview.

"However, construction is not going anywhere, and fast-moving consumer goods (FMCG) is not growing that much either.Engineering and consumer goods have slowed down as well, though certain manufacturing sectors have picked up slightly," he said, describing the current state of human capital needs.

Foster Partners in Malaysia has also found that while a number of their searches are for retainment positions (i.e a position that replaces an existing vacancy), there has been growth in the need for fresh positions.

"This shows that companies are expanding and there are a lot more job opportunities, as people want to hire executives of quality," Chen said.

John Chen

That being said, the shortage of local talent in the country may also indicate that more lucrative, and attractive positions, are available outside of the country.

"Malaysia is already exporting employees.And there is a sharp fall in the number of expatriates here as well," Chen added.

While the brain drain is characterised by workers going to Singapore and the US, China has been a major cause in the demand growth for Malaysians, as well as other foreign talent.

"Hong Kong's time (as an expatriate hub) has passed, and the hunger for foreign talent has moved northwards to Shanghai," he said.

"To illustrate the point, out of the 22 million people who are Taiwanese, one million are working in China."

Part of the problem is the relative pay scale - working overseas is simply more lucrative.

"Attracting them back to Malaysia is an uphill task," Chen said.

"Malaysian companies cannot match the pay of those earning overseas.The biggest problem still boils down to compensation.We have found that executives in their 30s and 40s are still not keen to return, but those in their 50s, after travelling around the world, would be more willing to come back to work here".

To counter that, Chen believes that there must be some form of compensation offered by the companies, citing profit sharing or equity interest.

John Chen: What I saw in China is happening in Vietnam today.
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In the human resources business, Foster Partners South East Asia managing director John Chen says what he saw in China is happening in Vietnam today.
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Nothing happens overnight," says Chen whose company opened an office in Ho Chi Minh City in June last year.

When one talks about Vietnam, inevitably the Intel example crops up.The US chip maker upgraded its initial US$300mil plant to a US$1bil assembly-and-test facility, putting its Vietnam commitment on par with Santa Clara, California and its other investments in China, Malaysia and the Philippines.It also reflects its confidence that problems can be overcome.

Says Chen: "There is no shortage of unskilled labour supply.
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They want to improve themselves," Chen says.

While hopes are high, Chen also sees the other side of Vietnam's booming economy - the scarcity and need for basic infrastructures like road, power and utilities, accommodation and office space and transportation among others.

"Vietnam needs to get its infrastructure ready.Heavy manufacturing is not ready yet because infrastructure is not there.Power and utilities, road and transport systems and a host of other basic business and commercial needs must be improved."

Chen says there is an overall demand for Grade A offices and better accommodation.There are 10 major office places in Ho Chi Minh City, of which four to five are Grade A. There is also a great demand for quality offices and accommodation.

He says the Japanese and South Koreans were among the first to put up condominium townships because they anticipated the demand.
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That's why our boys are eager to explore that market," says Chen who also worked in China in the 1990s.