By Lindsay Gellman, the Wall Street Journal on Business Day Live. Photo: Thinkstock
Global companies are having tough time finding leaders to run operations as continent’s dearth of high-quality business schools drives talent shortage
AFRICA is hailed as a major growth market for global businesses, but as global companies expand there, they are having a tough time finding leaders to run their operations.
That is the conclusion of a new report on executive talent by Russell Reynolds Associates, which surveyed 230 senior leaders and recruiters in Africa. Recruiters say companies are eager to recruit good hires in the region, but find that candidates with traditional management skills — such as the ability to drive change or build teams — are in short supply.
The report focused on the talent markets of Kenya and Nigeria, whose economies are growing rapidly, and SA, the continent’s most developed economy, yet the issues are common to many nations in sub-Saharan Africa, the authors note.
The issues will become more acute as more businesses expand in Africa, where gross domestic product growth is projected to strengthen to 4.5% this year and 5% next year, according to the African Economic Outlook 2015 report.
Driving the talent shortage is Africa’s dearth of high-quality business schools, according to Simon Kingston, who leads the global development practice at Russell Reynolds. In countries such as Kenya and Nigeria, many with management aspirations tend to leave for school or work abroad, and persuading them to return home for their career is a challenge, recruiters said.
In the absence of traditional management training ground, companies such as Coca-Cola, Diageo and Heineken have developed their own programmes to nurture Africa-based leaders.
McKinsey & Co trains promising young Kenyan professionals in critical thinking and quantitative analysis, as well as people skills such as co-operation and consensus-building, with an eye on developing talent for the firm, said Mutsa Chironga, a McKinsey partner based in Johannesburg.
The management-consulting firm turns away many local hires in Kenya and Nigeria who attended top local schools, Mr Chironga said, because those schools often fail to adequately prepare young people for work in global corporations. Local candidates also lack the internship or work experience and global exposure of some of their counterparts hailing from other regions, he added.
So far, global firms have relied on imported talent to fill local roles but relocating people is costly and doesn’t strengthen the local talent pipeline, said James Newlands, who leads the Americas-Africa business centre at EY.
"It’s not a sustainable solution to run your business on expat management," Mr Newlands said.
Retaining managers in the region is difficult because compensation tends to be lower than in other global areas, the study found. In Kenya and SA, some professionals are forgoing global companies’ management-development programmes in favour of local firms, which often provide a faster path to senior ranks, according to the survey.
To provide emerging leaders with international experience and training, more multinationals are trying rotation programmes that send Africa-based talent abroad with the plan that they will return later, said Mr Newlands.
Eulicia Govender, a South African national and second-year MBA student at the University of the Witwatersrand Business School, said she plans to work abroad for a few years in financial services before ultimately returning to SA to found a for-profit enterprise with a social mission.
"I want to bring back knowledge to SA with me, and see how I can make these ideas work in the South African context," she said.
Businesses are hoping that young Africans such as Ms Govender stick with their plan.
Some 39% of Kenyan executives, 39% of Nigerian executives and 41% of South African executives surveyed see the diaspora as a key source of leadership talent over the next five to 10 years, yet only 32%, 29% and 13% of them felt local talent would be willing to return home.