Bizcuits | Localisation

Leanda Lee

Coming at different angles on the term localisation, there appear two conflicting meanings. The expatriate package for high-flying executives with full relocation and repatriation costs, accommodation and hardship allowances, club memberships, and school fees at elite schools has made way for localised packages which have brought expatriate workers on par with local employees. Transferring foreign managers to local packages has clear cost benefits. It also sends messages of value to local employees, and it provides expatriates with a way to stay in the country if they wish to remain. Becoming localised, or ‘local’, can even accord a special feel-good status to the expatriate who wants to be accepted as an insider, a full card-carrying member of their new community. One day, hopefully it will become politically acceptable for initiatives such as ‘Macau Loves Locals’ to also embrace these people.
Such programmes, however, are underpinned by Macau’s pursuit towards the other form of localisation: replacement of expatriate managers by competent local staff.
Macau’s peculiar context has its own set of drivers, barriers and facilitators of localisation.  Businesses are driven to localise for a discernible set of internal as well as external reasons. Cutting costs in a competitive environment encourages the development of a strong local management team, but when knowledge transfer is the priority, and there’s lots of cash around as there has been in Macau, that pressure is not as great. Over the years we’ve seen the ebbs and flows of foreign managers but since the opening of the gaming industry, the economic pressure to localise has not been a major force. That may be changing, or be made to change, as profit margins are squeezed by the increasingly controlled flow of customers and capital.
Foreign companies are also known to move towards local management teams if an understanding of the local culture and environment is crucial to business performance; often to ply influence with external stakeholders. As a case in point, Sands China’s appointment of Wilfred Wong – although not strictly a local, but close enough – as the company’s president and COO is commonly believed to be for his lobbying capacity with Beijing and key government influencers. Macau’s colonial legacy means that overall, however, the local community and key government personnel are used to interaction with foreigners and have rather remarkable socio-linguistic skills, so the social and cultural motivation for companies to localise is yet another driver that is not particularly strong here.
The willingness of expatriate managers to come to Macau does not create a natural incentive for businesses to support localisation. It’s not a hardship posting, and although there are aspects of this lifestyle that take some getting used – the traffic, the narrow spaces, the pollution, different values, some nonsensical bureaucratic processes – with good social support, it can be a friendly place to be and a meaningful place to work and contribute to.
A big barrier towards localisation and which the Macau government recognised very early is the trust by the corporations in local staff to manage the businesses competently. This is the major reason behind the requirement for in-house training of local talent and the SAR’s development of education infrastructure. As there aren’t many internal operational issues that naturally propel companies towards localisation (especially as local labour costs increase), external pressures on companies to ‘do the right thing’ have been applied: foreign labour quotas, more stringent criteria on the importation of labour [MDT Mar 16: “Local association says non-Chinese media face hiring challenges”], requirements for HR policies of local resident promotion, and – the doozy of them all for those in the gaming industry – the unspoken threat of concessions not being renewed. We have also seen, and continue to see, subtler forms of pressure being applied through community dialogue, complaints by legitimate community groups [see MDT Mar 14 “Gaming association pledges to protect local workers”], and overt signals of compliance with the government line [Air Macau’s Local Cadet Pilot Program, and in a similar vein the Macau Loves Locals campaign (MDT February 24)]. In the absence of the business case to localise, we can expect external pressures to continue.