RECRUITMENT: Glocal insights for a shrinking world

We probably didn’t need an outbreak of swine flu to remind us that we live in shrinking world – someone coughs in Mexico and the impact is felt on New Zealand’s public health system almost immediately. It’s one of the less welcome aspects of what one recent visitor to New Zealand describes as “glocalisation”.
From his home base in the Netherlands, Albert Froom chairs an international recruitment agency that has taken glocalisation as its business model. Alto Partners is network of independent search firms established in 2006 in response to changes in market conditions that have seen executive talent become much more mobile but also subjected to tighter screening. It’s mix that requires greater depth of knowledge about candidates – the local part of the equation, with broad overview of talent needs around the world – the global piece.
“We have been quite busy in the last two and half years, coming out of nothing to create something substantial on global scale – something we like to call glocal,” says Froom.
With 32 offices in 25 countries, Alto Partners has quickly become distinctive force in worldwide executive recruitment covering Europe, the Americas and Asia Pacific, but there’s no central head office or rigid administrative structure, says Froom. Responsibility is decentralised and customers are always able to talk to “head office” in their own countries.
“Because we don’t have any legacy we could create something new that used the internet far more than more established groups – what we offer is working business development system. With one hit on button you can see what your colleagues are doing in the Czech Republic together with Russia trying to provide help for Chinese company investing in Prague – it’s all online and accessible. It means we also aim to create one-company feeling through the internet with people very actively exchanging knowledge and knowhow from country to country.”
And it’s in the context of going glocal that Froom, in New Zealand as guest of local Alto partner, Sheffield, offers some insights about the increasing moves toward multiculturalism at both senior executive and board level.
“Diversity has been on the agenda for the past decade, I’d say, in most boardrooms. But, typically it has been around gender rather than multiculturalism. One of the things I try to explain to my clients is to be prepared for Chinese or Arabic directors because it is just around the corner.”
Companies are increasingly seeking presence in emerging markets and countries like China and India are increasingly investing around the world as they expand their own power and reach. Being able to operate in more than one culture is an increasingly important attribute for senior executives and boardrooms need also to reflect the growing cultural diversity of their markets – both offshore and onshore.
One of the things that impressed Froom on his arrival in New Zealand was this country’s evident multicultural base.
“For me one of the most beautiful things in Auckland is the multicultural face of the city – it made me think of Amsterdam.”
But if local companies are to take advantage of this diversity, they will have to either recruit suitable candidates from the various ethnic and cultural groups represented here, or at least set up formal consulting arrangements with them. Froom notes there is some resistance in Europe to more proactive recognition of the area’s changing demographic face.
“Take my own country as an example – we have third generation Moroccans and Turkish people coming out of university who are well educated and fluent in all the languages – this generation is marching on and I think it is enriching everything we do. And I strongly feel, it is only matter of time before we see them in executive roles and boardrooms.”
He notes that in recent roadshow of emerging markets held in London and Paris, colleague who is successful businesswoman in India started her presentation with the information that elephants no longer walk the streets of Mumbai. Financial neo-colonialists take note – moving into emerging markets with views that are not informed by the current realities of those markets is doomed to failure.
“Everyone laughs but the myths around things like this are still so strong in the old world but there is tone there you have to take note of. So right-thinking boards in my humble opinion should take that message into account and start with consulting and after that inviting those kinds of players to the board table – because they are obviously moving their businesses in that direction.”
The need for more diverse cultural experience is already becoming apparent in the education system, says Froom.
“In my part of the world, it used to be that you choose city to attend university, finish your degree there and then go working, but if you look at today’s students, they perhaps do an undergraduate degree in one country, then move to another to see the world while they further their education. I see this as glocalisation of the world and strength for the youth to come. They are in position where they move into management roles having seen much more of the world than was the case in my generation.”
In New Zealand, he sees proximity to emerging nations as both strength and opportunity.
“I think the region will benefit enormously from the free trade agreements you have with China and Korea – I think you can pull yourself into Asia. For the next decade the engine for this region undoubtedly will be China and India and I think there are chances there for New Zealand.”
Meanwhile, the economic downturn is also having an impact on the global recruitment market in both expected and unexpected ways. Unsurprisingly, there’s greater emphasis on risk management at both CEO and board level, says Froom.
“Risk is of course hot, I’d say through all markets. What you see also is more CEOs with CFO backgrounds – people who have strong financial background and that makes sense in the current climate. There are also two different reactions in that we see CEOs getting little bit more time to get things right in the crisis while in other industries, they are firing CEOs and using the crisis to restructure the company, so to speak.”
As to how the crisis is playing out across the 25 countries in which Alto Partners works, Froom says recent survey threw up some “unbelievable” results. Asked to compare the first quarter of 2009 with that of 2008, one third is dramatically below, one third more or less the same, while the final third reported an improved performance. Regionally, results were not much clearer with neighbouring countries Italy and Spain offering quite different economic pictures – the first down 30 percent, the latter up by 10 percent.
Even at industry level, the results show little consistency, says Froom. While the financial service sector is, as might be expected, in sad state fairly much across the board, the IT and retail sectors are positive in some countries and dragging in others.
“As we say in Dutch, you can’t make chocolate out of it. It doesn’t make sense.”
He says the keen media focus on CEO and director salary levels has had an impact and while the criticism over some of the bonuses being paid out is not always merited, the outcome has been general flattening of remuneration expectations.
“The net result of this is greater transparency over bonus payouts in private as well as public companies and I personally think that is is very good thing.”
The other benefit is shift in perspective from short-term gain to longer-term outlook and, hopefully, longer senior executive tenures.
“The typical lifecycle of the market was about three years, the benefit of the crisis might be, I hope, that people take longer-term perspective and longer time horizon to work towards rather than the fast buck around the corner.”
As someone who has worked lot with not-for-profit bodies, he also believes that stint of management experience i