Growth in emerging markets might become stagnant if corporations don’t provide the appropriate training for employees, according to new research.

The Stevens Institute of Technology, a technological university dedicated to research and learning, found just that when it surveyed 15 Fortune 500 companies that operate in Brazil, Russia, India and China (BRIC). The conclusions of the study were based specifically on technical personnel but can be extrapolated to represent what’s happening on the corporate level in these countries, according to the organization.

One unique challenge that companies face in BRIC countries is that there aren’t many employees who are qualified to take on managerial and high-level positions and responsibilities.

“Using China as an example, you have a lack of potential managers in terms of their background, skill level and training,” said Richard Reilly, a Stevens’ professor who worked on the study. “Because of the Cultural Revolution and the fact that they were a Communist country, China really didn’t get into free enterprise and business. People in the age range where they would typically be middle to senior managers are just nonexistent, so you don’t have the local leadership that you would have in some other countries.”

Additionally, companies with offices in these emerging economies are losing new hires at an exponential rate, and one reason is because employees aren’t finding enough training or motivation to stay in their jobs. As a result, job hopping is a popular practice, which is increasing salaries drastically.

In the Stevens’ survey, most companies stated that a long-term employee was one who had been with the company for more than 15 months.

“What you have is short-term and long-term sets of issues,” Reilly said. “In the short term, they’re struggling to keep up with the demand and, in many cases, sacrificing long-term growth and stability. These organizations have to start thinking strategically, and they have to start building infrastructure, training and mentoring programs that will allow them to build a pipeline for leadership and develop the kinds of executives they’re going to need in the future.”

In developing training, which can lower turnover and help groom future leaders, corporations should first define a clear growth path, so employees can see where they are going and what they need to do to get there.

“There also should be an opportunity for the employee to experience and be trained in multiple domains or multiple dimensions of the business to build their business acumen,” said Michael Ryan, principal investigator for the study. “One of the other factors that came up repeatedly was that mentoring and coaching was an extremely strong tool, even though most of the companies we talked to did not have a formalized process.”

Additionally, training initiatives should be consistent, and there should be some measure of accountability.

“What happens in a lot of cases is that there is a new initiative introduced every year, and so nobody really knows what’s going to happen next year,” Reilly said. “Put in place programs where people can see where they’re going and how they’re going to develop and follow those consistently. Second, there has to be some accountability for development on the part of senior managers. As part of their performance evaluation, they should be evaluated based on how well they’re developing people, so that becomes part of the culture and norms of the organizations. Over the long-term, there has to be a commitment to development if these companies are going to continue to survive and thrive in these economies.”


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