HR in Cambodia and Australia: Same Same or Different?

Episode 27: HR in Cambodia and Australia: Same Same or Different?

Welcome to Reimagining HR with Trina Sunday, the rule breaking podcast

Trina Sunday: If you’ve been following along, you’ll know that I’ve been in Cambodia recently and while I was there I took the opportunity to dig into HR and people practises in the kingdom of wonder, how they compare to what we do in Australia, the challenges HR professionals face and what we can learn from each other. It’s same same, but way different. Welcome to Reimagining HR with Trina Sunday, the rule breaking podcast where we challenge our thinking and our current people practise. This podcast is for time poor HR teams and business leaders who are feeling the burn, lacking laughs and not feeling the love. I’m Trina, your host and I’m here to cut through the bs, explore different ways of thinking and create high impact HR functions because happier, healthier organisations are better for our people and our bottom line. So if you are keen to flip traditional HR on its head, hit the follow or subscribe button so you’re the first to know when new episodes drop. I’m, here to help and also to shake things up. So let’s get started.

Today I dive into the realities of HR in Cambodia versus Australia

So, HR in Cambodia versus Australia. What makes great HR anyway? And are we even solving the right problems? As I said, if you’ve been following along, you’ll know that I’ve recently been in Cambodia. I’ve been leading a leadership experience with a group of powerhouse women from Australia. And while I was there, I did. I took the time to dig into HR and people practises in Cambodia, how they compare to what we do in Australia, the challenges that we’ve got and where we can learn from each other. And let me tell you, some of what I discovered really hit home. HR in Cambodia is raw, real and evolving fast. There are stark differences in how businesses approach people management, but there’s also some surprising commonalities. Same, same, but different. So today I’m diving into the realities of HR in Cambodia versus Australia, where we’re similar and where we’re worlds apart. Our research into the biggest HR challenges that transcend our, borders. Whether we’re actually solving the right problems or just treating the symptoms. And later in the episode, I look at design thinking, a tool that can radically transform how HR tackles its biggest challenges.

The HR landscape in Cambodia is evolving rapidly, but challenges remain significant

So I guess it’s best to start with the HR landscape in Cambodia, right? It’s essentially a growing but undervalued function. Sound familiar? Cambodia, as we know, is a country of 17 million people and more than 65% of the population is under 30. And that’s because the Khmer Rouge genocide in the late 70s wiped out nearly a quarter of the population, including much of its professional workforce and its at the time infant and emerging HR profession. As a result, Cambodia’s business sector has had to build from the ground up. The HR profession as we know it is still developing. While global companies with a presence in Cambodia, like banks, multinational non government organisations, NGOs and hospitality groups, they have adopted structured HR models. But there’s many local businesses Cambodian operated that don’t have formal HR functions at all. So what do we see instead? There’s hiring, which is often done through networks and relationships, not always formal recruitment processes. There’s HR being mostly administrative in some areas. You know, contracts, payroll, compliance, retention being a major challenge. The difference being employees move frequently for even small pay increases and there’s limited investment in leadership development. The training’s been focused a lot on technical skills. But despite those challenges, HR leaders in Cambodia are pushing for change. And there are many that I know who’d be leading the way among our Australian cohort, just quietly. And a former HR manager for the Royal Group’s Phnom Penh, kind of sez, what is it? Special Economic Zone. They talked to me about the fact that in Cambodia the HR landscape is evolving rapidly. You know, Cambodia is moving beyond the traditional administrative roles to become really strategic partners in business development. Not just in business, but in developing the business. But challenges like retention and skill development remain significant, right? Sapir Peng shared with me that employee engagement is crucial in the Cambodian context. With a young workforce, they want to focus on creating learning opportunities and really clear career paths to retain top talent. This emphasis on career growth and development as a retention strategy is something Australian HR should pay more attention to, to be honest. And in Australia we’re focusing a lot on flexibility and some of what I would call the perks. But we’re neglecting the simple fact that people stay when they can see a future. Give them a future and they’ll want to stay.

In Cambodia, talent shortages have meant longer hiring cycles

So since getting back a couple of weeks ago, we’ve dug a bit deeper, into Cambodia and taken a bit of time to explore really key insights about the employee life cycle across our two countries. And as always, you start with recruitment trends and how effective we are at all that. Good stuff about finding talent because there’s lots of research out there and it’s a little bit interesting. In Cambodia, talent shortages have meant longer hiring cycles. So recent industry research in Cambodia showed that the average time to fill a vacancy was two to three months, with many candidates demanding 20 to 30% higher salaries than what they’d had in their previous role. But employers are advised to broaden the hiring criteria. Basically they’ve been told to consider cross industry candidates and get a bit creative about the talent pool and also improving the workplace amenities to attract the talent and other things in terms of making job openings more available to more qualified applicants. But these findings, which were shared by local HR practitioners over a chat, highlighted the need for some really strategic recruiting and retention plans. In Cambodia’s evolving market. It’s moving all the time. In Australia, high competition for skills and tech enabled recruiting has really changed things. So Australian surveys are indicating that like 55% of employers are having difficulty filling roles and that’s as early as 2024. So over the last year and over half of the vacancies were remaining unfilled after a month. But there’s also a lot of people looking for work. So if the vacancies are not filled and we’re finding it hard to find the people, what is this lingering effect of skill shortages that we’re experiencing in response? In Australia, companies are focusing on recruitment efficiency. They’re definitely focusing on the candidate experience and trying to get that conversion as quickly as possible. There’s been a lot of chat on LinkedIn About KPMG Australia’s efforts to cut their time to hire, which I think they did by 20% by streamlining their processes, using AI and consolidating. There’s about 20 siloed systems from what I believe into a much smoother, onboarding workflow, noting it was still 40 to 50 steps, y’all. But it does show how embracing HR technology can improve recruiting outcomes. If you are moving really fast and efficiently to get people in a market that’s really competitive for skilled labour, employee engagement and retention is always interesting.

68% of Southeast Asian workers are quiet quitting, according to Gallup

Right. So for Cambodia and Southeast Asia generally, there’s quite quitting and turnover risks like we’ve experienced in Australia. But employee engagement is remaining a real challenge. Like Gallup’s latest data had showed that seven in 10 workers in Southeast Asia, 68% were quiet quitting, meaning they’re not engaged at work. And that disengagement correlates with really high turnover intent. So 74% of Southeast Asian employees said that they were either not engaged or actively disengaged. And the region’s seen a spike in people saying that it’s a really good time to try and find a new job. And HR leaders on, LinkedIn that I’m connected with across Asia, given our work there, they’re really looking at improving the quality of jobs and the employee experience they’re looking at meaningful work, looking at the growth opportunities. And there really is a key to boosting engagement and retention in markets like Cambodia as well. In Australia, engagement levels have been a challenge, but we’re seeing an increase in people wanting to re recruit their own people. Like, duh, we should have been doing this all along. But like only 23%. So I think it was just under a quarter of Australian employees are engaged at work, according to Ari, which leaves a vast majority either indifferent or disengaged. And that reinforces a common insight, right, shared by HR thought leaders and all of us that are really following the trends of what’s happening in our profession. But organisations must re recruit their own employees if they want to be able to get the talent they need. But to do that, they’re going to need to foster motivation and loyalty. You know how you don’t get loyalty by treating people like dirt? That doesn’t get you loyalty. And studies have shown that the lack of growth is a major culprit in attrition. So in fact, three of the top five reasons people are quitting is basically because they’re not learning and they’re not growing, so they’re not feeling impactful in the job that they’re doing. So there’s really actionable takeaways there about investing in career development and recognition. But Gallup’s finding that engaged employees and they’ve proving it in terms of the conversion are, far more likely to stay. And many Australian employers are increasing their training and internal mobility programmes to combat the retention issues. And the immigration issues globally are also starting to mess with that. And so it puts that emphasis on employee engagement and re recruitment really under focus.

Traditional annual performance reviews are falling out of favour across the region

Performance management across the region is, oh, my nemesis. But the trend is about rethinking reviews. Right. There is a broad consensus, echoed in numerous LinkedIn discussions, that traditional annual performance reviews are, falling out of favour. Right. If you’ve been listening to me, I’ve been banging on about that for a while. And research highlights that 64% of employees consider yearly reviews a partial or a complete waste of time. And nearly two thirds say they’d consider quitting if they received low quality feedback. So not a low rating necessarily, but just really crappy feedback. And leaders feel the same. So 90% of managers are, hating on annual appraisals and they don’t believe that they get any accurate insights. Insert my broken record here. So why are we doing it? Why are we investing so much effort in something that’s not working? Continuous feedback and results is where it’s at, right? So in both Australia and globally, organisations are shifting towards continuous feedback and coaching focused performance management. And there’s companies like Adobe and Deloitte and Accenture and there’s case studies all over LinkedIn who have replaced annual ratings with frequent check ins, you know, which have led to notable improvements. And Deloitte have claimed that their researchers found that 90% of companies that revamped their performance management did see increases in employee engagement and 83% reported higher quality conversations between managers and staff. That’s probably because it’s a human conversation and not just filling out a form. That’s just my thoughts. The emphasis is on ongoing development, right? Like setting agile goals, providing real time feedback that people can do something with, and aligning individual contributions with the business outcomes. This trend of moving from performance reviews to performance enablement is widely championed by HR practitioners as a strategy to boost both productivity and retention. Rest in peace. Annual performance reviews. It’s been fun, not learning and development. Best practise has been a bit interesting if you look at development as a retention lever. Both Cambodia and Australian HR leaders recognise that learning and growth opportunities are critical for engagement, right? LinkedIn’s workplace learning report, which has widely been shared amongst L and D professionals, that revealed a lack of development to be fueling attrition. Employees are, outright stating that their learning stalled and it’s one of their top reasons for leaving their company. But conversely, organisations that prioritise L and D are, seeing high morale and retention. For example, one finding showed that three of the top five reasons people quit their jobs relate to not having learning advancement or being able to make that impact, right? So it’s a clear signal that investing in people’s growth pays off. But internal mobility and upskilling is absolutely kind of like a whole programme that needs specific effort right now. Like a recurring insight across Cambodia, Australia, the region is that, companies need to enable career development internally or they’re going to risk losing talent, right? Yet only 15% of employees globally say that their employer encouraged them to move into a new internal role, like in the last six months, like no one’s talking to them about it. And that indicates some pretty big room for improvement. Australian companies are responding like over a third plan to increase training investments in the next year to address skill gaps in career progression. But in practise, leading employers are launching mentorship programmes, they’re building their own skill academies, clear pathways for advancement. All the things people go outside to get. Companies are starting to build it inside and in Cambodia too, there is a massive push for upskilling. For instance, experts are recommending strengthening engineering. Yep. And ICT training programmes are growing, local talent to meet industry needs. And the best thing about Cambodia, they don’t have landlines. All this old tech that’s holding them back. They move fast in a digital landscape and there’s something we can learn from that. The takeaway for HR is actionable. Right. make continuous learning part of the culture. And that can include providing on demand learning just in time learning, encouraging role rotations and really recognised managers who are developing their teams. Like, how many managers are you assessing as being top performers because of the growth of people in their team, the positive attrition that they’ve had of people leaving their team but going on to add even greater value elsewhere inside your organisation.

Adoption of HR tech always going to be a conversation when we’re looking at

Adoption of HR tech always going to be a conversation when we’re looking at what’s happening in HR in different regional areas. But the rising use of HR tech and its adoption is a hot topic. Right. LinkedIn all over our news sources, but thought leaders are noting that digital tools are now really integral across the employee life cycle. And a recent Asia Pacific survey of like a thousand, I think it was a thousand HR leaders found that the average large company uses nine. Like more than nine. It was so nine plus core HR applications, you know, from recruiting platforms to learning systems, and that’s up from seven just a few years ago. However, half of those HR leaders are not happy with their current HR tech stack, often due to poor integration, poor user experience. Everyone hates those systems. And that spurred discussions on selecting the right solutions right and driving adoption in the right areas. Whether that’s cloud based hris, AI driven analytics, you know, employee self service tools are increasingly common in Australia’s HR landscape where, you know, nearly 95% of organisations use or plan to use tech to manage remote or hybrid work. And PwC talks a lot about that in terms of remote work arrangements and the impact in Cambodia. Well, in emerging markets like Cambodia, HR tech is starting to get traction in a smaller scale in some areas, but at a rapid pace in others. Like, it’s really inconsistent. So one notable trend is basically the embracing of professional networking platforms for talent acquisition. So for example, young professionals in Cambodia are now reporting starting to use LinkedIn to find jobs where it wasn’t always the case and to proactively connect with employers and build relationships before they need them. And some are even directly approaching recruiters on the platform where that never used to be a thing. So it’s really shifting away from traditional job hunting methods in the Kingdom, but so is finding your job and doing business over telegram, just quietly. So, having just been doing business for a month in Cambodia, it’s been really interesting evolution for me. Just when I was consolidating my own app stack, I’m having to add more in terms of messenger apps. But HR leaders on LinkedIn have highlighted stories that illustrate how tech can expand talent pools in developing markets and all that good stuff. But additionally, as more Cambodian companies invest in modern HR systems for payroll, applicant tracking systems, et cetera, there’s a parallel need for upskilling HR staff to leverage those tools effectively. And the consensus advice of the HR colleagues that I spoke to when I was in Phnom Penh recently is that adopting HR tech has to go hand in hand with process simplification and training, otherwise the return on investment on technology is going to fall short. Right. There’s no point building a system and implementing or automating a really bad process. It’s not going to get you a better outcome.

Research shows workplace culture and leadership driving engagement across employee lifecycle

But workplace culture and leadership impact is getting a really big spotlight in Cambodia and it was really interesting being on the ground for such a long time and partnering with some awesome organisations while we were there, which you’ll hear more about another time. But leadership has kind of outsized its influence. What do I mean by that? It’s kind of, you know, research is showing us that consistently, you know, workplace culture and the quality of leadership is driving engagement right at every stage of the employee lifecycle. And Gallup famously attributes, you know, 70% of the variance in team engagement is the manager. So essentially people leave bad managers, not just companies, and we know this, but the cultural context in Cambodia and the hierarchical nature of leadership, it really does compound the challenges for those who are desperate for a more constructive and collaborative leadership style, you know, those who have seen it done differently. And so this statistic, which is cited often on LinkedIn, it underscores a really actionable point that investing in leader development, especially frontline leaders, not your exec teams, it can dramatically improve team morale. Right, performance retention. And in Australia, organisations with high engagement cultures often credit strong people focused leadership as the differentiator. The impact team that travelled to Cambodia with me saw this emerging leadership in spades during the one day conference that we did with Khmer women leaders who had done their Master’s studies in Australia. Wow, what an inspiring group of women. I’m so excited to see where Cambodia goes under that kind of leadership. And we know that culture is the retention factor, right? A healthy, inclusive culture. It’s not just nice to have, it’s measurable, it’s impactful. And data from MIT Sloan shows that toxic corporate culture is 10 times more predictive of employee attrition than compensation. And Daniel Pink talks about that culture over compensation and what’s really motivating people. In other words, employees are far more likely to quit due to a negative work environment, you know, feeling disrespected or excluded than they are for a pay bump elsewhere. And this insight’s been heavily discussed, you know, following the wave of the pandemic resignations. But conversely, companies known for positive cultures are reaping the benefits in retention and employer brand. For instance, the HR Asia kind of Best Companies to Work for Asia Cambodia 2023 report or others. It was based on about 12,000 employees and there were 12 companies that were honoured for championing inclusive workforces. And what they’ve done to really shift culture in what is a really traditional region in terms of expectation, hierarchy, societal expectation, gender norming. Quite different to the context that we lead in in Australia. And those employers really distinguish themselves through trust, right? Trust in leadership, diversity and inclusion and caring workplace practises, traits that HR professionals strive to emulate and often struggle to generate I across our peers or other leaders in our organisations. But by building trust and recognising employees and living their values, organisations in Cambodia, Australia and beyond can create a magnet for talent and a workforce that’s engaged and resilient. But I still look at the fact that this research shows a wealth of insight, right? All the reading we’ve done, the conversations that I’ve had with HR colleagues in Cambodia, testing it with some of our partners, testing their organisational models while we’ve been with them. But HR is evolving in both Cambodia and Australia. But one key takeaway keeps surfacing. Are we solving the right problems? And this is kind of exactly the theme that we explored in a design thinking workshop that I ran with the IMPACT team and programme leaders from Cambodian Children’s Fund. Now, the focus was on youth, not on staff. It was on the students. And at first, leaders were thinking that their biggest leadership challenge was low motivation among youth. You know, they were considering things like incentives or punishments, you know, additional studies or consequences for not engaging in community activities. But when we apply design thinking, you start to uncover things a bit differently, right? We start with empathise. Instead of assuming we listen, we consider, you know, the youth weren’t necessarily disengaged in helping the community, but they definitely were feeling disconnected from the decisions and from the leadership that was happening around them. So to define that issue, the real issue was likely, probably not motivation. Like our staff, the youth often didn’t feel heard in decision making. They didn’t feel like they were in control or if they had any time. So then when the group was ideating, you know, brainstorming different things that could be done to help shift it, instead of throwing discipline at the problem, the group started to explore solutions to bring youth into leadership programming conversations. And they came up with a prototype, you know, like different ideas. This was just a workshop to test design thinking, right, but prototype it. What if we had a simple youth advisory board that we could prototype, giving our youth leaders a voice in the strategy, in community strategy, and then we test it. The programme team will go on, I’m sure, to test this, refine the idea and the activities to ensure that there is greater engagement in the planning, decision making and ultimately the community programmes by youth. The result, when we do that with staff, engagement improves without increasing pay.

The future of HR in Cambodia is about growth, it’s about leadership

Now imagine applying this to Australian hr. And I know that Sam at, Canva, the talent acquisition lead at Canva, she had raised a great point around diversity and inclusion are at the forefront of their HR strategy, right? And they believe that a diverse workforce fosters innovation and it reflects their global customer base. And the Wajia data has come out this week in Australia at the time of recording this, it’s this week and it shows that that is a priority for Canva. They are walking the talk that they’re putting out there. But if diversity is a priority across their profession, across all of our organisations, why are we still using outdated hiring processes instead of launching another biassed training programme? What if we redesigned how we recruit? What if we remove the barriers that excluded our, diverse candidates? Because that’s the only way we can look at the future of HR and what needs to change, right? The future of HR in Cambodia is, is about growth, it’s about building a leadership pipeline, developing structured HR functions and creating really long term career opportunities. And I’m really excited to be a part of that mentorship of that next generation of HR leaders in Cambodia. The future of HR in Australia really needs to be about us breaking out of our stagnation, you know, moving beyond the compliance and the admin and taking more of an innovative strategic approach to people practises. Youthful leaders in Cambodia have got the benefit of not being wedded to decades of the way we’ve always done things around here. And from my experience working and volunteering and living in Cambodia, that can be so liberating when you don’t have the shackles of having always done it that way. Being sighted back at you. The ideas, the ideation. When it comes to solving problems, it just opens up into a whole new world. So for both countries, we’ve got some pretty key lessons, right? We need to stop solving surface level problems and start digging a bit deeper. we need to stop focusing only on processes and policies and we need to start designing work for humans. And we need to stop assuming we know the answers and start asking better questions. Imagine that.

Reimagining HR is all about people, purpose and impact

So here’s your challenge. Think about a major HR issue in your workplace. Right, got one. Now ask yourself, are you solving the real problem or are we just managing the symptoms? I’m really keen to know your thoughts and also how you’ve seen HR show up in other countries that we can learn from as global HR citizens. That’s global citizens Trump. Just in case you missed it, we’ll better wrap it that until next time. Keep questioning, keep challenging and keep reimagining what HR can be and share it because we are stronger together. Thanks for tuning in and leaning in to this week’s episode. As we look to reimagine how we show up for our people, organisations and community, reach out to us via our website at reimaginehr.com.au with your HR horror stories or suggestions of people you’d love to hear from or topics you want to explore.

It’s all about people, purpose and impact and we are here for all of it.

Until next time, take care team.