Keeping talents for advancing service firms in Asia

Skill shortages worldwide have intensified the need for talent management. Few papers examine the pattern of human resource (HR) and talent management practices that help retain competent employees among service multinational companies (MNCs) in Asia. The purpose of this paper is to map out a number of HR practices used by service companies and to examine the effect of talent retention as perceived by MNC managers on service delivery capacity and business growth.

A survey data of 281 service MNCs in six Asian countries (namely Indonesia, Malaysia, Philippines, Singapore, Taiwan, and Thailand) are used to compare country and sectoral differences. Standard multiple regression analysis is conducted to test the link between HR practices, employee retention, and service firm performance.

The results confirm that there are statistically significant linkages between HR practices, talent retention and firm performance. In particular, various skill training and development programs are seen to be significantly associated with capacity to deliver quality service and on firm growth as perceived by managers surveyed. Informal recruitment methods that are used more by Asian‐bred firms have contributed to better retention rates. Not all formalised HR practices lead to talent retention; and the degree to which HR is perceived to have impacted on firm performance varies.

The paper focuses on examining the perceptual impacts of human resource management (HRM) practices on firm performance, rather than actual HRM impacts. The interpretation of results should be taken with caution.

Talent management is influenced by country specific variables. This paper shows how important it is for service firms to focus on strategic selection of both formal and informal HR practices in order to deliver high quality service and to drive service firm growth.