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Southeast Asia- A Prime target for HR globalisation

About 80% of the global organizations are evaluating how to do more HR functions from Global locations.  Interesting trends are emerging to see how South East Locations are being leveraged by MNCs for HR localization.

Several multinational corporations that aspire to expand their business practices to various parts of the world are faced with the challenge of striking a balance between global and local human resource management practices. As a counter development, about 80% of global organizations are evaluating their options in expanding their HR functions to accommodate local employee expectations, as well as retain home-country standards.

The recent developments on this front reveal that many organisations are targeting cities in Southeast Asia for localizing their HR functions. Optimizing local HR functions from these cities have been reaping greater benefits such as linear and upward mobility, greater learning and development, better engagement and reduced attrition rates.

Vietnam is one of the prime targets for US MNCs to localize their HR functions as they offer low labour costs, government incentives and help to evade the US-China spat over trade tariffs. Shell PLC, on the other hand, has created global mega business operations centres based in Kuala Lumpur (KL) and Manila, integrating some of its HR functions. Around 10% of Shell’s global HR function is based out of Manila and KL operation centres.

Southeast Asia sports a highly diverse talent pool in terms of skills, culture, ethnicity, race and other workforce characteristics. Thus, the counter developmental approach to localize HR functions is an initiative to meet the new-age demands. Competent organizations are championing this novel trend of generic HR practices to ensure greater levels of talent acquisition, engagement and retention.