SINGAPORE has a vital edge over rival financial centres in the battle to address a critical shortage of senior executives, according to a top American headhunter.
The Republic is looking increasingly attractive to Western executives whose home economies might be slowing, Mr Brian Sullivan, the chief executive (CEO) of New York executive search firm CTPartners, said.
He was referring specifically to 'C-suite executives': CEOs, chief financial officers (CFOs) and chief operating officers.
In recent months, a shortage of talent in this segment, especially at banks, has forced employers to look abroad - and to offer big pay packets.
Mr Sullivan said Singapore has a strong advantage.
'The sophistication level of businesses in Singapore is very high. This tends to be the hub of regions, so it's not just the local market you're dealing with,' he told The Straits Times last week.
He added: 'As things are slowing in the West, more people will absolutely think about moving over to Asia.'
He said Singapore offers an added benefit: a high quality of life.
This makes it a more attractive destination than other financial centres such as Hong Kong, where executives are concerned about lifestyle factors such as air quality and accessibility to schools.
He said the calibre of the talent from abroad is very high, but 'so is the shortage of talent'.
Companies that fail to make succession plans for key senior roles will be hard-hit by this problem. If a company's top brass leaves without a replacement, then it will not have a senior management team capable of continuing its business strategy.
'If there's no methodology in place to invest in the next tier of people and cross-train them, then you're in the compensation-chasing, external recruitment game, which can really have a negative impact on your profit and loss statement,' said Mr Sullivan.
Take the plight faced by United States financial giant Merrill Lynch, which lost two top executives - CEO Stan O'Neal and CFO Jeffrey Edwards - between October and December last year in the subprime mortgage fallout.
Mr Sullivan advised organisations in Asia to take succession planning seriously so as to avoid such a scenario in their own boardrooms.
'Succession planning is something that's underdeveloped around the world but especially in Asia, because of the rapid growth and rapid sophistication of Asian organisations or Asian divisions of multinationals,' said Mr Sullivan.
He added that it is now time to prioritise succession planning 'because of this exacerbated talent shortage'.
He also believes that compensation packages are key in retaining talent, and that C-suite executives 'should be able to make as much money as humanly possible'.
However, the amount should be linked to the success that they achieve in driving an organisation and to the long-term profitability of the organisation.
'Two-thirds of their basic salary base should be variable and computed based on how well they do. This ensures the interests of the executives are aligned with those of the shareholders,' Mr Sullivan said.
He said Asia is a 'developed region that still has hyper growth attached to it'.
To take advantage of that growth, he noted: 'The board of any organisation needs to have on it Asians who are running businesses in Asia and understand the Asian way of business.'
He said: 'You're not interested in just the heritage of Asians - you're interested in what business conditions are in the region and how to do business here.'
This article was first published in The Straits Times on May 12, 2008
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