The 2018 Total Workforce Index™ suggests that there is increased investment by employers hiring in low cost markets as they continue to seek expanded candidate pools for certain skill sets. Regardless of whether markets are seeing an insurgence of admin/clerical hiring or manufacturing, or technical skills, the Total Workforce Index™ indicates which markets are increasing in workforce engagement and contractor utilization. Over time, observed trends within the index suggest that increased hiring activity ultimately leads to tighter regulation and higher cost, but this year as in past years, we have identified several emerging markets that still offer low cost labor with higher availability.
As workforce markets enter the top rankings for their region or category for the first time, they demonstrate a short-term workforce opportunity to capitalize on low cost and competition that allows for organizations to shift their geographic strategies. This year, the index also suggests that while base wages remain the largest component of total labor costs, they are no longer the majority of those expenditures. Globally, we are seeing increased payrolling taxes, insurance costs, and other statutory burdens that, when coupled with the cost of turnover and training, often exceed base wages themselves. Individual factors, such as the average wages are critical to monitor, but should not be taken out of context within their category – more and more, we are seeing markets whose costs are increasing relative to another country based on their regulations as opposed to the wages themselves.
Global workforce engagement and productivity remains on the rise, despite increasing retirement of aging workforce. At a market level, the index tracks the rate at which workers are aging out and entering the workforce in various skilled categories to enable organizations to better balance the sustainability of their global operations. While there is much speculation on how employers should adjust strategies to accommodate generational trends within their workforce, the index focuses on the quantitative impact that these demographics have on a business at a market level.
While the index is intended to support all organizations in their workforce planning, it is important to note that how an employer prioritizes the factors tracked by the index, is of critical importance to which countries represent the greatest opportunity for their hiring initiatives. How an organization prioritizes cost or availability compared to the individual considerations related to regulation and productivity can substantially impact which markets are most opportune at any given time. As with any index, it is the trending quarter-over-quarter and year-over-year of the factors monitored by the Total Workforce Index™ that provides the greatest insight into future opportunity.
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