How Can Multinationals Find Talented Candidates? Go Where Firms Don't Hire Many Women

Suppose you are a multinational company searching for highly talented candidates.  You are finding it difficult in certain markets to attract the best people.  Where might you have an easier time finding top notch talent?   HBS Professor Jordan Siegel, MIT's Lynn Pyun, and Hanshin University's B.Y. Cheon have conducted a fascinating study titled, "Multinational firms, labor market discrimination, and the capture of competitive advantage by exploiting the social divide."   These scholars find that global firms can enhance profitability by recruiting and hiring women in countries that traditionally do not have ample opportunities for females to achieve leadership positions in business.  

Siegel and his co-authors focused their research first on South Korea.   According to this article on HBS Working Knowledge, South Korea makes a great setting for this research because, "Universities in South Korea are highly meritocratic about accepting and educating women. Hence, the country sports a large number of highly education, highly qualified women with advanced degrees in business, engineering, economics, and foreign languages - all useful in corporate management."   Unfortunately, the opportunities for these talented women are limited in many traditional Korean companies.   

This research focused on multinationals who were taking advantage of this talented pool of candidates that were not being given sufficient opportunities by domestic firms.  "Even after accounting for unrelated variables, the researchers found that a 10 percent nominal increase in the percentage of female managers (at the level of the then-prevailing glass ceiling) was associated with a  1 percent nominal increase in ROA."  

The researchers are focusing on Japan next, a country that also does not provide wide opportunities for women to assume senior leadership positions in business.  (I just read yesterday that only 1% of Japanese chief executives are women, though 1/2 of university graduates in the country are women).  Interestingly, Siegel's research in Korea suggests that Japanese multinationals might be providing more opportunities for women abroad than they are at home.  His work looked at 37 Japanese firms hiring in Korea, and he found that many of them were hiring female mangers there, but not at home in Japan.