Realities of Working for a Multinational in Thailand in 2018

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1 Realities of Working for a Multinational in Thailand in 2018 Interviews with an expat and a local HR professional in Thai-based industrial MNCs By Yushi Nakayama April 12, 2018 Thailand is a dream destination for people all over the world. Chaophraya River Bangkok, Thailand (Photo Source: Yushi Nakayama) MSU and Coursera.org Become a Journalist: Report the News! Capstone Assignment Thailand is a dream destination for people all over the world but is possible to find a fulfilling career while enjoying your life in the tropical paradise? In 2017 Thailand welcomed a record 35 million visitors, who spent over 1.81 trillion Baht (US$50 billion), according to the Tourism Authority of Thailand. Apart from its popularity as a vacation destination, the country is a satisfying choice for many foreign nationals who join multinational companies (MNC) operating in Thailand. Thailand s global ranking in overall criteria went up two positions to reach number 22 in the HSBC s 2017 Expat Explorer Survey with over 27,000 career expat respondents giving the country high marks in the Experience category it ranks 1 st in Property and 5 th for health while in the Economics category it ranks 6 th for Disposable Income. In 2018 Thailand s export-driven economy is still growing. A January article by the Bangkok Post reports the Thai Finance Ministry spokeswoman Ms. Kulaya Tantitemit said the government raised its economic growth forecast for 2018 to 4.2% from 3.8% and its exports, a key growth driver, estimate to 6.6% from 5.7%. Decades of foreign investment, a heavy presence of MNCs and foreign experts will boost the Thai governments ambitious Thai 4.0 Policy. According to its

2 2018 statistics, the Thailand Board of Investment (BOI) approved applications for 478 foreignowned projects and 314 joint venture projects during Pursuing a Manufacturing Sector Career in Thailand: An Expat Perspective Thailand Exports Percentage of GDP ( ) (Source: World Bank Data) Thailand s economy is export-oriented with exports accounting for around 68.9 percent of the FY2016 GDP according to the World Bank. MNCs, with a large contingent of expat personnel, produce a vast quantity of electronics, vehicles, machinery and equipment and foodstuffs exported from Thailand.

3 Ms. Sara Chung, HR Recruitment Planner (Photo Source: Ms. Sara Chung) The manufacturing industry is globalized and very competitive. As Thailand is a regional management and manufacturing center for many MNCs, HR at home and in Thailand must have strategic human resources management, said Ms. Sara Chung, a HR Recruitment Planner at a top global manufacturer. She works with management and engineers from countries including Taiwan, Germany, China and India. Before moving to Thailand, Ms. Chung had completed her graduate education abroad and worked for a western MNC in her home country Taiwan. She said expats are indispensable to MNC manufacturing operations in Thailand. I got a call one day from my current employer when I was job hunting back in Taiwan. I took the opportunity and am now enjoying my new life in Thailand.

4 Working in Thailand The Thai language is the most challenging part about working here. Bangkok, Thailand (Photo Source: Yushi Nakayama) At our interview at the company headquarters, at a major industrial estate near Bangkok, Ms. Chung described the qualities her company looks for in foreign recruits. We are looking for someone who brings stability to our company. We need people who are down-to-earth and who have excellent foreign language skills. Recruited expats at large MNCs can expect to enjoy a higher living standard for a much lower cost than in developed countries. The company covers living expenses and many benefits leaving expats with large disposable incomes. Working in Thailand often brings unique challenges, The working style and methodologies of different countries may lead to some difficulties, Ms. Chung said. She acknowledges there are major differences that expats must adapt to in Thailand. The Thai language is the most challenging part about working here. It s important for foreigners to learn Thai as English can only get you so far in your communications with local colleagues. I have taken Thai classes offered at the company and have just completed the intermediate course. Although I m far from fluent, I believe just trying to speak to my workmates in their language is a big step in the right direction. Apart from the language barrier, Thailand s maze of cultural rules can be difficult for even veteran expats to navigate. She offered advice on how can expats get on well with their Thai colleagues, Respect the culture and show your willingness to learn their ways, such as trying to adapt to their working style. For example, you could try to experience the way local life is by spending time with your local colleagues to find out what affects their working style.

5 Thailand 4.0 Opportunities for Expats Thailand 4.0 Policy targets include the Automation/Robotics sector for Smart Manufacturing Chonburi, Thailand (Photo Source: Yushi Nakayama) Ms. Chung still hasn t decided how long she will work in Thailand but for expats looking to position themselves best for their future career and life after Thailand she recommends, Expand your connections while you re here and network with the locals from work and in your social circles. She shared her view on the changes for expat career and lifestyle opportunities in Thailand. In the past years, MNCs owned by North Pacific Asian industrialized nations such as Japan and Taiwan offered most of the heavy investment and job opportunities in manufacturing. The global rise of China and its expansion into ASEAN has caused fundamental shifts in the dynamics of manufacturing in Thailand. Despite the changes, she remains optimistic for the future of expats working in Thailand. Thailand is the most developed country in the Southeast Asia region and is the main country in ASEAN for investments. This will lead to the increase of the number of expats and their prominence in terms of international roles in the coming years. In its 2017 Thailand Investment Review the BOI lists 10 target industries of the Thailand 4.0 Policy including Next-Generation Automotive, Smart Electronics, High-Income Tourism/Medical Tourism, Efficient Agriculture/Biotechnology/ Food Innovation, Automation/Robotics, Aerospace, Bio-

6 Energy/Bio-Chemicals, Digital and Medical/ Healthcare. With government policy fueling demand for managers and skilled experts from abroad, expats look to continue finding excellent career opportunities in Thailand. Working in a Multinational with Expats: A Thai perspective Mr. Big Phongakson, HR Recruitment Specialist (Photo Source: Mr. Whatthanapon Phongakson) MNCs operating in Thailand attract many talented young Thais looking for an alternative to stateowned enterprises or companies controlled by powerful local families. I prefer working in an international company because I enjoy a more open work environment, Mr. Big Phongakson HR Recruitment Specialist at a major global manufacturer said in our Bangkok interview. Mr. Phongakson enjoys working with senior engineers, managers and executives from Hong Kong the USA and Europe. At a Thai company I can t be free to give suggestions to my superiors or higher ranking employees, but here even executives will seek my opinion on how to work with Thai staff, he said. He said many Thai employers only offer salary and benefits required by national labor laws and employees endure a snail-paced career track with no incentive for performance. In contrast, MNCs offer higher salaries, performance-based advancement and incentives for skills.

7 Expat Recruitment Cultural adaptability is the most important quality we are looking for in a foreign candidate. Chinatown, Bangkok, Thailand (Photo Source: Yushi Nakayama) Mr. Phongakson described a common expat interview path at MNCs in Thailand. The advertised position s direct superior and management gives the first-round interview. Interviewers gauge the candidate s suitability, Candidates must satisfy the interviewers he/she matches the required business, job description and position, he said. Successful candidates go on to a second interview by HR to assess their personality and suitability for long-term employment in Thailand. He said HR is looking for candidates with demonstrable skills, original ideas and concepts in their interview. Cultural adaptability is the most important quality we are looking for in a foreign candidate. I give the candidates a hypothetical scenario to see if they can work with and manage Thai staff, he said. He gave an example of an Indian candidate who suggested a gentle approach with senior Thai staff to get to the root cause of problems and cooperation to find solutions. In contrast, many western candidates suggested a more direct approach and personal job ownership. Thais need plenty of explanations and hand holding. If you give out individual tasks and targets to Thais, they may find get uncomfortable, he said. Expat candidates who pass both interviews receive an offer and enter negotiations with the company over details. Successful applicants send in official documents and credentials as evidence for visa sponsorship and a work document application before their relocation arrangements.

8 Working with Thais Learning Thai culture is the most important way expats can work best with their Thai colleagues. Bangkok, Thailand (Photo Source: Yushi Nakayama) Mr. Phongakson thinks high-level Thai language skills are unnecessary for new arrivals, as Thai staff at an MNC must speak English. Although your work and life will be easier if you learn simple Thai, adapting your communication style is more important, he said. He gave an example of a European production manager who asked him to help solve an issue with his team on the line. He found that the Thai technicians and machinists had problems understanding the manager s commands. Most of our production staff are technical school graduates and cannot understand advanced technical terms in Thai, much less in English. I got the manager s team to first help him clarify every term, then translate them into Thai and simplify them to layman terms for the operators. He believes expats brings many unique benefits to MNCs, Expats bring ideas and new concepts to every department in the company. The education, processes and programs used in Europe, India and the US differ totally from those used in Thailand. Our foreign engineers and management contribute technical knowledge they apply in a way that even Thai counterparts educated abroad cannot. Learning Thai culture is the most important way expats can work best with their Thai colleagues, he said. In Thailand, culture at work and everyday life is not the same because we don t bring our work home. I suggest expats spend time with Thai colleagues after work hours to get to know them on a more personal level. Expats with little interaction with locals can refer to briefings by global firms such as Living & Working in Bangkok by PwC or Thai government courses produced by the nation s top university professors.

9 Long-term Expat Life in Thailand Expats considering retirement in Thailand are recommended to put their roots down Ayutthaya, Thailand (Photo Source: Yushi Nakayama) The family is central to Thai culture, and Mr. Phongakson recommends expats who are considering retirement in Thailand to put their roots down, A Thai wife is a huge plus for male expats planning to live in Thailand after retirement. By law, only Thai nationals can own land and most businesses must have a 50% Thai owner. While it s not impossible for a foreign woman to marry a Thai man, I don t see it often. I think most Thai families cannot accept a foreign daughterin-law because they fear the wife will not follow the Thai custom of supporting aged parents, he said. Besides a local wife, he suggests having ample savings and a small business to support yourself after retirement. A small business, like a bar or a shop, would guarantee you always have cash. While rent is a good source of income, it not as secure or stable as a business with steady cashflow, he said. He thinks conditions are better these days for expats at his company. In the past, we only offered expats basic packages with pay and benefits for themselves. Now we include support for relocation, annual home trips, travel allowances and comprehensive medical coverage for both the expat and their family in a standard expat package. However, he said the high overhead means companies can now only recruit expats that will be a return on investment.

10 Future for Expats in Thailand No matter where you come from, once you get your legal status worked out you can build your future in our country. Asok, Bangkok, Thailand (Photo Source: Yushi Nakayama) Mr. Phongakson sees an exciting future for expats and Thais working together in Thailand. I think more expats will come to Thailand for work, including those seeking different work arrangements. Freelancers, consultants or business partners from abroad will do dynamic work outside a traditional office setting. Expat newcomers will bring fresh ideas to drive innovation and technology. He thinks compensation and benefits for expats in the short-term will not grow at the same speed as Thai incomes so the pay gap will narrow more. As citizens of this country, Thais enjoy many advantages in Thailand. Our social networks and land rights that provides a safety net and balances out the income disparity with our foreign counterparts. He advises expats looking to work as freelancers to get work permits and correct visas to avoid unnecessary stress. No matter where you come from, once you get your legal status worked out you can build your future in our country, he said.