The world of work is changing
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- Marilynn Hunt
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1 Talent Attraction and International Mobility What do countries and businesses need to do to attract the best talent to boost their competitiveness? The world of work is changing faster than ever. Economics, technology, demographics, sociological trends and government policies are reshaping global labour markets and determining how we will work for years to come. Considering that most people spend the bulk of their time and therefore a very significant proportion of their lives at work, such changes are seminal to us all. Five drivers underpin five key trends for the workforce of tomorrow. Mobility is becoming ever more important to employer and employee alike, while hyperconnectivity is making the location of work less relevant. The challenges around ageing populations make inclusion another salient development, with ever more emphasis on diversity in the workplace. The workers of tomorrow will also be much more autonomous in terms of attitude not just because of all those communications gadgets in their pockets. The result will be a new work-life blend, in which a job extends beyond traditional working hours and spaces with employees taking total control over their schedules and environments. Finally, with greater volatility and flexibility the norm, tomorrow s workers will have a distinctly different approach from their predecessors, most evident through an increased emphasis on purpose in job selection. Against this background, Figure 1: GTCI Model it is important to ask: What do countries and businesses need to do to attract the best talent to boost their competitiveness? The Global Talent Competitiveness Index (GTCI), produced jointly by INSEAD, Adecco and Singapore s Human Capital Leadership Institute, seeks to answer this critically-important question. Understanding the GTCI Model The GTCI is a composite index, relying on an Input-Output model composed of six pillars four on the Input side ( Enable, Attract, Grow and Retain ), and two on the Output side ( Labour and Vocational (LV) Skills and Global Knowledge (GK) Skills ), as illustrated in Figure 1. The input sub-index comprises of September 2016 CFOCONNECT 39
2 the first four pillars, which describe the policies, resources and efforts that a particular country can harness to foster its talent competitiveness. Meanwhile, the output sub-index aims to describe and measure the quality of talent in a country that results from the above policies, resources and efforts. The GTCI is computed as the simple arithmetic average of the scores registered on these six pillars. GTCI: Main Findings As in previous years, the study find high-income nations at the top of the GTCI rankings, with all of this year s top 25 falling in the rich country bracket. Regionwise, Europe, led by top-ranked Switzerland, accounts for seven of the top 10 (and 16 of the top 25), with the US, Canada and Singapore (2nd) rounding off that coveted list. New Zealand and Australia economies a long-standing tradition of immigration also figure prominently. Interestingly, aside from the UK (7th), it is the smaller European countries in particular Luxembourg (3rd) and the four Nordic countries that come out ahead of countries such as Germany (14th), France (22nd), Spain (36th) and Italy (41st). Japan comes 19th place, with the UAE, Qatar and Israel just squeaking into the top 25. Going down the income ladder, only Malaysia (30th), China (48th), Costa Rica and a handful of Eastern European states figure anywhere in the 50 most attractive countries for talent. India has actually slid 11 places in this year s score, dropping to 89th place overall, behind countries like Thailand, the Philippines, Vietnam and Sri Lanka and just ahead of Indonesia. What drives these rankings? Clearly, it is a mix of the 6 pillars listed above though interestingly, most of the differences in countrylevel scores are driven by one or two key parameters. On the input side, the dispersion of scores is much smaller on the Enable, Attract or Grow parameters than it is on Retain (Figure 2). This suggests that many countries struggle to retain talent, but they do better on everything else. On the output side, meanwhile, countries are much more dispersed in terms of LV skills which look at employable skills and worker productivity than on GK (higher-level) skills. This is perhaps not surprising. High-income countries rely more on innovation, entrepreneurship and collaborative partnerships for growth, reflected in their greater share of knowledge workers with professional, managerial and global leadership skills. Switzerland ranks first on the Enable and Retain scores (and 7th or better on everything else), while Singapore comes either first or second on Enable, Attract and GK Skills. Australia and Canada both do well mainly on the Attract side, while the US ranking is driven by its Grow score (3rd, behind the Netherlands and Denmark). More generally, the higher-income countries on average tend to outperform all other income groups on all 6 pillars (Figure 3). So high is the overall attractiveness for this group that even the lowest-ranked high-income country does better than the average (median) for any other set. Regionwise, similarly, North America and Europe come out well ahead on nearly all parameters, compared to all other regions (Figure 4). Looking Beyond the numbers While the overall GTCI scores are very revealing, there is even greater value to be found in the insights the report draws from such a large, cross-country study. Eight findings, in particular, are relevant to both countries and organisations that are looking to attract, grow and retain global talent. Mobility also means seizing opportunities to boost knowledge and expertise in ways unimaginable even recently just think of the vast numbers of students now following online courses and lectures offered by leading seats of learning. meanwhile, for employers, mobility no longer means just traditional expatriate placements, but also moving jobs to where talented people are located Alain Dehaze, Chief Executive Officer, The Adecco Group Figure 2: Dispersion of country scores for each pillar 40 CFOCONNECT September 2016
3 Figure 3: Pillar score by income groups (average of all countries in the group) Lesson 1: Mobility has become a key ingredient of talent development The migration debate has moved from the 20th Century focus on brain drain versus brain gain to brain circulation. Earlier, when individuals with high skills or high potential moved to another country to study or to seize the employment and entrepreneurship opportunities that clusters offer, it was traditionally seen as brain drain for one nation and brain gain for the other. The new context of talent mobility leads to a different paradigm, by which all parties (country of origin, country of destination and the individuals themselves) stand to gain in a process best described as brain circulation. To the extent that these internationally mobile people maintain ties to their country of origin, both countries benefit because of remittances (currently bigger than global aid flows), diaspora investments, the acquisition of know-how and experience via networks, and the innovativeness and entrepreneurship qualities acquired through mobility by successful returnees. In today s world of innovation, mobility develops talent: the global mindset, the networks, the innovative capabilities that characterise creative talent cannot be fully developed Figure 4: Country dispersion of GTCI scores by income group (left panel) and by region (right panel) September 2016 CFOCONNECT 41
4 if such international mobility and brain circulation is not encouraged. Lesson 2: The migration debate needs to move from emotions to solutions Migration is emerging as a source of conflict, but a talent perspective can help change the way in which governments, business and public opinion considers it. Emotional reactions to sudden events are always dangerous, whether they are positive or negative. A main reason for this is that emotions can be reversed as quickly as they have risen. Sustainable solutions to international migration flows will need the identification and pursuit of positive sum games, by which countries of origin, countries of destination, and countries of transit will find it advantageous to address such flows with a positive attitude. History can help here, as it shows how much benefit has been generated from the circulation of talent across borders. With growing inequalities, one tension that needs attention is between mobility for the privileged and lack of opportunity for those lower in the social pyramid. As globalisation deepens, talent mobility becomes an important element of dynamism, innovativeness and competitiveness. This is a matter that national governments, and also regional and municipal leadership, need to address in practical ways, focusing on both the immediate concerns of their constituencies (creating and attracting jobs, alleviating poverty and income disparities, improving quality of lives) as well as what should be the longerterm interests of their citizens Bruno Lanvin, Executive director for Global indices, Insead Those who are not part of the talent pool or creative class may not be willing to support immigration of high-skilled professionals and students, despite the clear rationale, unless their own children have the opportunity to get ahead, regardless of socio-economic background. Lesson 3: Management practices make a difference in attracting talent More and more countries want to position themselves as desirable destinations for talent as historically has been the case for the US, the UK, Switzerland, and more recently Singapore. What makes a destination attractive? High pay, tax incentives and good quality of life are well-known factors. But GTCI data also shows that one of the important differentiators in talent attraction is the quality of management practices (Figure 5). Analysis shows that two critical elements need to be considered under that heading, the first being whether or not management is professional, attributing positions on merit rather than kinship or friendship; and the second is the attention paid to employee development. Research shows that, among the needs and expectations of the millennial generation (across the world but notably in Asian emerging markets), the thirst for professional and personal development is prominent. Government and local business leaders who have benefitted from an education abroad may play an important role here, to improve national productivity through more professional management as well as the attractiveness of the country. So do multinational corporations who can often set the tone in terms of governance, professionalism and attention to employee development. The resulting benefits may be more difficult to obtain in closed economies than in open ones. Lesson 4: People continue to move to jobs and opportunities, but jobs are now also moving to where the talent is The Global Knowledge (GK) capabilities of some emerging countries have reached impressive levels: China, ranked 48th overall, is 26th on innovative/creative GK skills. Other Asian countries that show a similar pattern a higher GK Skills ranking than the overall rank include South Korea (18th on GK vs 37th overall), Philippines Figure 5 42 CFOCONNECT September 2016
5 (33rd vs 56th) and Vietnam (52nd vs 82nd). Corporations are beginning to move strategically important product development and R&D activities to these countries, attracted by quality talent at low cost and facilitated by efficient international communications and technology diffusion. Lesson 5: New talent magnets are emerging While the US, Switzerland, Singapore and other countries in the developed world have long been attractive destinations for talent, there are other countries that show strong potential as talent magnets. Compared to its total population, Indonesia has a low stock of migrants, but business leaders perceive it as being attractive to high-skilled people. China will soon be part of this group, particularly if it manages to lure back former emigrants with science and engineering skills, and competition will become fierce among emerging talent hubs, and those who aspire to join the group of attractive talent destinations. Lesson 6: Low-skilled workers continue to be replaced by robots, while knowledge workers are displaced by algorithms Mobility continues to be redefined in new ways, notably through technology. As technological innovation continues to increase the number and array of activities and professions that can be automated, it is now affecting knowledge workers as much as technicians and manual workers. This tectonic shift, by which technology opens the doors to new business models, means that some people may work virtually for different employers from their homes, while others have to retrain and move far to obtain jobs. Entire sectors of activity may be displaced as a result. The so-called Uberisation of the economy is an example of such shifts, whereby technology offers new ways to consolidate individual demands typically for transportation or temporary lodgings as well as matching scattered offers for specific skills such as for driving, hosting, training or tutoring with demand. Lesson 7: In a world of talent circulation, cities and regions are becoming critical players in the competition for global talent An increasing number of large cities are becoming global talent hubs, which attract skilled and creative workers from all parts of the world. Talent continues to be attracted by the usual enablers: (1) high-quality infrastructure; (2) competitive market conditions and business environment (including clusters); (3) an existing critical mass of talents, with excellent networking and cooperation possibilities; and (4) superior living conditions (including factors as diverse as climatic conditions, cultural environment, safety and easy access to key services such as health or education). Cities today are increasingly adopting proactive strategies, including imaginative policies, to attract global talent. The role of cities is increasing for two main reasons. First, large countries are heterogeneous, with diverse internal socioeconomic contexts across regions. Therefore, cities and regions are often better positioned than countries to develop and brand features (e.g., quality of life ) that are attractive to both internal and international migrants. Second, cities can differentiate themselves through local capabilities, including agile responses to market opportunities for innovation. Agility and branding hence seem to be more critical differentiators than size, when it comes to identifying why and how cities and regions compete for talents. Lesson 8: Scarce vocational skills continue to handicap emerging countries. Many emerging countries that have invested in higher education Although Asian countries are traditionally known to be exporters of talent, there has been a shift in talent flow in the recent years. Increasingly, talent who have left their country of origin are returning home to Asia, bringing with them valuable global experience, knowledge, skills, expertise, and networks. This look east phenomenon is not limited to Asian returnees. Highly mobile global talent are also looking towards Asia for their next career break Wong Su-Yen, Chief Executive Officer, Human Capital Leadership Institute have neglected vocational education. In both China and India, the skill shortage in vocational talent shows up clearly in the GTCI scores, as it also does in South Africa. This last year has seen a cooling-off in the growth of emerging markets, and indeed, there has been a relative decline in the talent competitiveness of all BRICS countries except Russia. This is particularly the case in Brazil, where talent capabilities show signs of weakening on all fronts. Despite relatively low scores in vocational skills, China continues to strengthen in growing talent. In India, there are scant signs, if any, of an improved regulatory and market landscape to enable the Make in India campaign. This gap in terms of vocational skills, however, is not limited to BRICs and emerging economies: GTCI data shows that it extends to a number of high-income countries, such as Ireland, Belgium or Spain. n This article is based on The Global Talent Competitiveness Index : Talent Attraction and International Mobility, a study by INSEAD, the Adecco Group and the Human Capital Leadership Institute. September 2016 CFOCONNECT 43
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