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Primary Talent Challenges Facing Asian Startups

HR Tech Outlook | Friday, May 05, 2023

A varied, talented and enthusiastic group of founders is emerging throughout the region. And with record venture money pouring into the area, these entrepreneurs have an unrivalled opportunity to obtain the assistance they need to grow.

Despite global economic challenges, nearly six out of ten startup executives anticipate stable or rapid growth for their companies.

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Startup optimism in Asia, however, is tempered by personnel issues, with 54 per cent of respondents stating that they will struggle to fulfil demand with current talent models because of high staff turnover, an increase in silent resignations, and trouble swiftly finding the right people at the right price.

To address the talent challenge, HR leaders in Asia are looking to improve workforce planning which accounted for 53 per cent, improve the employee experience for key talent by 58 per cent, and 54 per cent are rethinking compensation philosophy and implementing new practices.

Around 50 per cent of Asian startups claim to provide flexible work schedules for all employees, which is lower than the global average of 56 per cent and nearly 30 per cent of employers do not anticipate providing flexibility to all employees in the future. A disconnect between what companies give and what employees demand is at the heart of the talent difficulties organisations face today. An excellent example is remote working, which is now an expectation. When it comes to flexible work arrangements, there is no magical cure. In addition to assessing the advantages and disadvantages, organisations must properly explain the rationale for their return-to-work policies.

Many of Asia's top startups are having an impact on the world, whether it be by influencing new business models or by taking on global issues which aim to help prevent dementia at a young age. Meanwhile, COVID-19's effects have increased demand for fresh digital services, which startups are well-positioned to develop. Since the start of the pandemic, 60 million people in Southeast Asia have become digital consumers, using at least one internet service.

Asian entrepreneurs are investigating what is possible with the upcoming wave of technological advancements to address the evolving needs of the region's internet population. Many individuals desire to contribute to resolving persistent social, economic, and environmental problems. They frequently concentrate on areas where technology hasn't advanced as quickly as it has in the more developed sectors of the digital economy.

The region's pioneers are developing a wide range of potent applications in artificial intelligence. While India's startups are developing new tools to assist researchers and physicians in better understanding the human brain, Indonesia's Ai startups have developed a conversational AI that helps businesses create better experiences for their customers.

Decentralised Finance is another area of expansion. In 2021, Southeast Asian DeFi entrepreneurs raised $1 billion in equity capital, a six-fold increase from the previous year. Entrepreneurs behind startups are making it simpler for people in the region to invest and access other financial services while keeping an eye on the move away from traditional finance and trading.

E-commerce and financial technology (fintech) are rapidly expanding across Asia. Making banking more accessible and e-commerce a better experience are two common motivations for fintech founders. The Philippines’ Advance makes it easier for Filipino workers to access zero-interest credit through responsible partnerships with their employers. Through chatbots and customised emails, Shopinks helps Singaporean retailers contact their customers more effectively.

Following the pandemic, multiple health technology startups offering 24/7, personalised care through a smartphone app, and also exchanging information on senior care facilities, have gained a lot of traction. Given Asia's sensitivity to the climate problem, other founders are placing more and more emphasis on sustainability. Startups contributing to the response include Indonesia, which manages 2,000 waste management sites across Indonesia, and Taiwan’s startup's shared transportation platform that helps improve air quality by reducing car use.

While there’s considerable capital available for Asian entrepreneurs, the region’s founders require a far wider breadth of help beyond investment. Common challenges faced by startups in the region include keeping up with regulations (which differ at country, state and provincial levels), getting access to infrastructure or technologies, and increasing the current low rate of women’s entrepreneurship.

In order to move this entire ecosystem forward, startup accelerator programs are being conducted in Southeast Asia, India, Korea, and Japan, providing support and mentorship for growth-stage startups. The new startup academy program launched in Indonesia will coach early-stage startups.

Apart from the aforementioned domains, Asia leads the pack when it comes to gaming.   By 2025, gaming in Asia will bring in over $41 billion, with Vietnam, Indonesia, and Thailand experiencing the strongest growth. Globally, China, which is home to industry behemoths generates the majority of income.

According to Microsoft Asia, the region, particularly in markets like South Korea, China, and Japan, is seeing tremendous growth in the field of cloud gaming. The allure is that users can play on any device, anywhere, anytime. The gaming market in Asia continues to lead the world and is expanding across many devices. With nearly three billion video gamers worldwide, Asia Pacific accounts for more than half of that population.

Furthermore, the pandemic caused more individuals to stay at home, which greatly increased e-commerce sales globally. This year, Southeast Asia is expected to see an acceleration of that trend. An additional 70 million people from Indonesia, Malaysia, the Philippines, Singapore, Thailand, and Vietnam are thought to have purchased online since the pandemic started. The region's e-commerce is at the forefront of social marketing and customer satisfaction. The best selection, a range of price points, digital payments, and logistics that guarantee quick delivery are all provided by the retail ecosystems they have established with the customer at the centre.

E-commerce has also produced an entire payment and fintech ecosystem that is convenient and enables users to perform more actions with a single click. While Asian startups have enjoyed considerable success in their own nations, their influence may be felt globally.

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