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Quality and quantity in balance
Published on Friday, 04 Nov 2011
Peter Stracar says today’s employees seek satisfaction through great employee experiences rather than solely monetary rewards.
Photo: Hilti

HOW TO TACKLE EMERGING MARKETS

Creating a powerful emerging market strategy has moved to the top of the agenda for many multinational companies such as Hilti, a European-headquartered global provider of products and services for construction professionals. In less than 10 years, 65 per cent of total global construction growth will occur in emerging markets, with half of this growth in China. This ongoing expansion has already resulted in a severe shortage of talent.

For a specialised industrial company like ours, the challenge is magnified as we don't always appeal to Generation Y, and our brand is not yet universally recognised beyond its own industry. As such, the company has had to develop a strategic approach to attracting and retaining the most talented individuals. 

Background

Most companies fall into the trap of salary wars, while competing for talent. The attempt to attract and retain talent exclusively through the use of monetary rewards is, however, shortlived, and tends to have a limited impact. Competitive remuneration and benefits are, of course, necessary but in the end, the employee experience is what counts. The ability to provide a great employee experience is a key differentiator for us. We have always believed that it is our organisational culture that has made the difference when it comes to attracting and retaining talent.

Accordingly, we highly stress the importance of our managers' ability not only to deliver business results, but also to deliver convincing progress with regards to organisational development. Both aspects paired together are crucial for future company growth.

This combination of hard and soft results is the main criteria for career advancement. For someone aspiring to be a manager at Hilti, merely achieving short-term financial results is not good enough.

Strategies

India and China are definitely not short of growth opportunities. However, the ability to adjust organisational development to match high-growth patterns is a decisive success factor. In India, for example, we experienced strong double-digit growth rates in the past 10 years which led to headcount additions of more than 30 per cent annually. Proactive manpower planning helped to master this challenge.

Using our three- to five-year business plan as a guide, we were able to forecast our people demands in terms of quantity and quality.

As part of this, it was important to carefully consider our expected organisational evolution, as well as natural market turnover rates.

For example, to reach the target of 80 per cent of our managerial staff being promoted from within, it was necessary to ensure that 20 per cent of all our employees at any level possessed the talent to be promoted one to two levels up. Such analysis helps Hilti know if it has enough internal talent to meet future needs.

Feedback

Hilti used to select and hire employees based on educational background, work experience and behavioural-based interviews. The hypothesis was that if the company could match the candidate's personality profile as closely as possible to a specified ideal, the prospects of future performance could be further enhanced, which in turn would have a positive impact on the company.

However, our experience showed that despite careful selection, only 50 per cent of hires would turn into strong performers. A subsequent internal study focusing on our sales team found that there were several distinguishing personality factors among our top performers. Based on these distinguishing criteria, Hilti now issues an online personality questionnaire, in addition to the standard recruitment process. This helps increase the probability of hiring top performers. In addition, we also regularly track their performance to confirm the correlation between personality and performance and to fine-tune the model further.

Future plans

After identifying the openings of key positions in the next three to five years, Hilti then identifies potential successors for critical positions and arranges the selected talent to take up development assignments to prepare them. The employee feels that the company is willing to invest in them with guidance, coaching and support.

Since 2005, we have begun to pay more attention to cross-cultural issues. Today, more than 75 per cent of key positions are given to local talent.

Peter Stracar, president for Asia-Pacific, Hilti Corporation


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