One of the core determinants of productivity is the quality of labor. One constituent of labor quality is human resources investment mainly in education and skills upgrading. The contribution of this factor to productivity growth can be raised by improving the educational level of new entrants to the workforce and by providing continuous training to those already employed.

But faced with market risks, companies are becoming unresponsive to the needs of their workforce, making it difficult to stimulate growth. The benefits and risks of companies are associated with fostering talent internally and recruiting talent from the outside market. Promotion opportunities, performance feedback and specific work-life policies appear to be linked with lower turnover rates and higher productivity.

Companies doing business in Asia need to understand, among others, the culture, language and local policies of the host country. They also have to deal with issues like integrating management systems of head and branch offices, retraining local employees, and improving and retaining talents.