Executive Recruitment in Thailand

As economic difficulties begin to squeeze businesses the need for top grade executives becomes more acute. The 1997 crash saw a shift in the way executive positions were filled in the Kingdom and saw more Thais filling senior positions. With the fallout of the US sub - prime crisis one of many economic factors still to hit Thailand in earnest, the next year could see a similar pattern develop, so what is the market for executive and middle management recruitment in Thailand and are locals ready and prepared to fill the top jobs. Voralak Suwanvanichkij investigates.

“Ten, fifteen years ago, the job landscape in Thailand was very different,” says Tidarat Kanchanawat, Thailand Country Manager for Adecco, a global human resources and recruitment agency.

She explains, “For multinational corporations, it was common to have Western expatriates come in to fill entire executive and middle management teams due to lack of expertise and proficient English speakers in the local labour pool.”

Today, mid - level managerial jobs are filled by local hires. Thais are also assuming top executive positions, defined as C - level officers such as chief executives and chief financial officers as well as technical directors.

Tidarat herself exemplifies the latter; she is the first Thai to assume the senior spot in Adecco’s 19 years of operations in Thailand.

Yet how broad is this change? Have Thais shattered the glass ceiling? And what can we expect of executive hiring trends in the next ten years?

Shifting Market Dynamics

When asked about noticeable changes in top - level recruitment in Thailand during the last decade, industry insiders mention several factors that shifted market dynamics.

Ian Webb, an Executive Recruiter for Baker Tilly Differentiate comments, “Many international companies cut down on the Western compensation packages, including the housing allowance, annual trip home, school fees for children, and so forth after the crisis in 1997.”

Al Lock of t + b Solutions, a corporate training consultancy, agrees, “Many of the corporations I worked with actively reduced expatriate remuneration and perks during the financial crisis.”

“So high - level opportunities for Thais opened up because of economics. Subsequent successes came from those who had education, mentoring, and training and thus, were prepared to step up. It’s an ongoing upward cycle,” he says.

Tom Sorensen, Partner of Executive Recruitment firm Grant Thornton, offers a less sweeping view, “I do not see a clear trend in terms of Thais replacing expat executives. Yes, it’s happening, but on a case-by-case basis.”

He comments on another trend: namely, the surge in the number of local expats looking for jobs in Thailand. Tom explains, “These are not the contract expats who are sent here by their employers. The local expats are already here and want to stay, whether their contracts have expired or for whatever reason. Covering a wide range of industries, their numbers outweigh demand.”

Unfilled Demand

On the flip side, the demand for talented Thais is outstripping supply.

Tidarat explains that as the market matures, so too does the pool of local talent, but “it takes a long time to see the results of the education system, and while there are more Thais in managerial positions, the numbers are still insufficient to fill C - level demand.”

Tom pinpoints poor language skills as the largest single factor contributing to this discrepancy. He says, “Thailand has poor English training in the school system compared to neighbouring countries. It’s a major issue, and my biggest challenge is finding candidates with the appropriate level of English for an executive position.”

Also, the World Bank ranks Thailand 78th out of 99 nations in terms of percentage of the labour pool with at least a tertiary education. In comparison, Singapore is ranked 9th and Hong Kong is 60th.

Recent figures published by Thailand’s National Statistical Office also suggest that the country lags in terms of higher education levels, and therefore the number of qualified management candidates. Out of a population of 65 million, 37 million Thais comprise the labour force. Of this figure, 5 million, or 13.5%, have completed a university degree.

Greater Expectations

Meanwhile, head offices are becoming more stringent on performance, often defining skills and qualities they desire in a candidate.

Tidarat comments, “Multinationals are more achievement oriented, reflected in tight succession planning. Expat contracts often have a mandate to groom a local replacement in three to five years.”

“First and foremost, firms want managers who understand their work culture and can communicate effectively with the mother company, subsequently moving up the corporate ladder,” she continues.

Tom adds, “For this reason, many international companies rotate their executives all over the world; with their own pool of talent in-house, these companies do not require executive search assistance for their expat positions. However, they do come to us when hiring executives for
positions that can be held by Thais. ”

Cost appears to be a secondary consideration, and local candidates with the “right” credentials often possess equal bargaining power with their Western counterparts.

Are there specific industries where there is increasing demand for contract expats?

“In highly technical fields,” answers Tidarat. “Especially the oil and gas industry, where specialised knowledge and skills are required. This is true all over the world.”

The nature of certain industries also sustains a preference for expatriate executives. Upscale international chain hotels, for example, favour expat general managers who are familiar with hotel operations, and are able to integrate Western management skills with the local cultural ethos.

Also, “the hotel industry has their own global system that rotates executives around very quickly, and headhunters are not a part of this,” says Tom.

Looking Ahead

In a recent survey conducted by the Association of Executive Search Consultants (AESC), a global association of top-level headhunting firms in 70 countries, many respondents from emerging markets, excluding Thailand, believe that within 10 years, international expatriates will largely be superseded by locals, returning nationals and regional expats in filling senior executive roles.

“For Thailand, we are increasingly turning to local talent, but the results will probably not be as drastic as to say that, in a decade, there will be no international expats here,” comments Tidarat.

In that time frame, the increasing proportion of local talent may still be less than the growth of new posts.

Ian agrees, “There are more well-educated, qualified Thais at all levels now but without a boost in the education system, the bulk of talent will never be realised.”

“For that to happen, we would require governmental action to change the educational infrastructure. There’s great potential in Thailand, but it takes a long time, a generation at least, for significant changes to develop,” says Tom.

“In the big picture, what’s happening now is still a drop in the bucket,” he states.