Cape Town, Tuesday, 15 April 2014: Over the past decade international investors have poured billions of dollars into Africa in an attempt to leverage off the region’s above-average economic growth rate and burgeoning middle class. The result is an influx of multinational companies (MNCs) that are intent on establishing their global brands on the continent.
One of the biggest challenges that firms face when entering Africa is to secure experienced senior executives to execute their expansion plans. Local talent is in short supply because many African businesses have not operated on a multinational scale for long enough, with the result that even technically skilled and qualified people do not have the necessary international experience.
“There is only a recent corporate culture in many African economies – and relatively few MNCs – which means the skills global firms are looking for in dealing with corporate scale are not readily available,” explains Dianna Games, CEO of Africa @ Work, a consulting company focusing on African business.
She adds that skills shortages are acute not just at an executive level but across the board, partly because of the inherent weakness of the domestic private sector over past decades, the pre-eminence of governments in economies and the failure by such governments to develop skills.
The appropriate skills for MNCs are thus typically sought among the expatriate communities in developed economies. “The preference is to either put expats on-the-ground to support local skills or to fly in expats as and when needed,” says Guy Lundy, a Principal Consultant at executive search firm, Odgers Berndtson South Africa which operates in Sub-Saharan Africa.
He says that there is a growing realisation that Africa-based recruitment specialists are best positioned to handle multinational executive searches and placements whether placing expat executive skills in Africa-domiciled MNCs or at the global headquarters of firms expanding into Africa.
“In the past multinational firms were quite colonial about their executive placement partners,” he says. “Nowadays there is a preference for recruitment specialists that have a deep understanding of the environment that these firms operate in as well as an on-the-ground presence in Africa.”
Odgers Berndtson SA receives a number of requests from its international partners to help them with searches for multinational clients that want to expand into Africa and Lundy mentions a recent request to assist a firm based in the Philippines to recruit managers for its branch operations in Madagascar, Sudan and Nigeria as an example.
Who emerges victorious in the executive placement race? “Skills are primary but it is also important to consider each candidate’s understanding of the broader environment including differences in business culture, political situations and relationships within the company in question,” says Games
From an Africa perspective those who speak multiple languages have a definite edge. Many MNCs operate across regions in Africa with English and French required to operate across the francophone countries (including countries such as Côte d’Ivoire, Madagascar and Senegal) and English and Portuguese is essential in Mozambique and Angola.
Assuming you find the right mix of skills there is still the difficulty in luring the incumbent to Africa to take up the position. “You need to address high perceptions of risk as well as the relative lack of lifestyle choices including good schooling, medical facilities and affordable quality accommodation,” notes Games.
The cost of an executive placement remains a major consideration. It is not uncommon to pay upwards of $20 000 per month for family accommodation in Luanda, Angola, for example. Lundy notes that Cape Town has benefited from recent oil and gas activity in Angola because some MNCs are basing their executives’ families in the city with these executives making use of the popular CT / Luanda flight to commute to work.
Lundy says that while most MNCs cannot proceed without expats on the ground, they push hard to transfer skills to local resources as soon as possible because expats demand higher salaries to go to places that are perceived as being less desirable. One alternative is to recruit among the returning African diaspora.
“The diaspora are looking at Africa opportunities in a way they have never done before,” says Lundy.“Individuals who left Africa two decades ago are returning to very different realities.” Nigeria is a case in point. Twenty years ago it was under military rule; but has enjoyed several successful democratic elections since.
“Africa has become a place of opportunity and a place that is a lot more predictable and stable than it has been before and that is an attraction to people that left during tougher times,” he says. Another reason for MNCs to consider the diaspora is the push in most of the countries in Africa for indigenisation – a policy to use locals to fill senior positions rather than going expat.
“The rest of the world is awakening to opportunities in Africa,” concludes Lundy. “And major multinational brands are cottoning on to the need for local knowledge when entering the continent.”
“They now understand that things work differently in Africa compared to the United States and Europe and that a deep understanding of the local environment is a critical success factor when entering Africa – the colonial mind-set that was prevalent is no longer relevant.”
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