- Cost Efficiency
The markets that rank highest in the Total Workforce Index™ are those with the highest relative performance across all four categories. The ability to perform well across two or more of the four main categories, in addition to having a minimal regulatory impact and large workforce availability, make these five markets the most generally favorable for workforce engagement.
The top overall markets, based on the rankings of the Total Workforce Index™, are led by three Asian Pacific (APAC) markets: Hong Kong, New Zealand and Singapore. Rounding out the top five are the United States and United Kingdom. The top five markets changed only slightly year-over-year. However, the biggest change is between the top two global markets, with Hong Kong rising to secure the first position from New Zealand. Until 2018, New Zealand held the first ranked position globally since 2015. The move to second position in the global rankings is due to a significant drop in score in the Cost Efficiency category and a slight decrease in the Availability score year-over-year.
Over the past five years, only one market has been featured in the top five year after year. New Zealand has consistently secured a place in the top five despite the addition of more than 50 unique factors to the index over time. Changes to the weightings of specific factors, indicating that they became a higher priority to employment organizations in a particular year, also have a strong impact on rankings, yet New Zealand managed to remain consistently in the top five each year.
Markets featured in the top five, four times over the past five years include Hong Kong, the United States, and Singapore. This trend is indicative of a mature, stable and valuable workforce market because, despite changes to the factors and weightings attributed to each market by the Total Workforce Index™, these markets continue to show that they are good investments in workforce engagement due to strong skills and positive hiring dynamics.
Worth noting is the fact that the overall rankings are influenced equally by the scores for each market in all four categories. If a global market were to perform ‘very good’ to ‘excellent’ in two or more of the four categories, the result would be that this market rises to one of the top ranked positions.
Markets with more variation in scoring and performance across all four categories typically fall in the middle of the spread and will not score as well overall when categories are evenly weighted. That said, the weighting of the Total Workforce Index™ categories is fully customizable in a consultative setting. For example, if an organization chooses to weigh cost efficiency and regulation influencers lower than availability and productivity, the top 10 would instead reveal a unique top 10 better suited for that organization’s workforce strategy.
The economic climate in Hong Kong is very strong, as indicated in part by a record 20-years low unemployment rate during a quarter of the year. Engaging talent through contracting and temporary work arrangements has continued to increase of the past few years. The reasons range from cost containment to the sourcing of more specialized skills and expertise or experience for specific projects and tasks.
While Hong Kong recognizes the aging workforce population and skills shortages related to high levels of employment, this market is also taking steps to encourage higher levels of female participation in the workforce. Programs range from incenting new mothers to return to work sooner under more flexible arrangements to increase engagement of the emerging workforce through non-wage benefits and flexibility.
Flexible work and remote work options may see an increase over the next few years as employers in this market begin to experiment with less traditional work arrangements and schedules. Long-held beliefs that physical presence equates to productivity are beginning to change as the millennial generation is aging into managerial and executive level positions within organizations.
New Zealand has taken steps to retain both the emerging and existing workforce skills and stave off migration. Higher female workforce participation has also contributed to the availability of skills in this market. In fact, the number of women in the workforce this year is the highest in more the 30 years on record with women accounting for nearly half of all employed people.
This increase in workforce participation is a positive indicator that New Zealand is able to increase productivity in a shifting labor market. Where jobs are transitioning from agricultural and manufacturing to more technology and services sector positions with organizations adopting more cloud computing services and automation of processes. Retention of skills in this market is driving the value of the workforce for future investment by organizations as more highly-skilled talent is needed for the more technical roles.
Also contributing to the favorability of this market is the ease of doing business and ease of starting a new business relative to other global markets. Sectors experiencing the most growth include the professional, scientific, technical, administrative, and support services sectors, public administration, retail and hospitality sectors.
Singapore leads the Asia Pacific with similar workforce potential to Australia. Increased levels of language proficiency and the quality of the labor along with a very favorable regulatory environment outweigh the higher costs associated with this labor market for specific types of engagements. As Singapore continues to mature it has enhanced labor laws to create a viable and strong labor market for all types of engagements. This market strikes a nice balance for both workers and employers.
While financial and business services still lead hiring activity, there is an expanded demand in the market for information technology workers with skills specifically related to the blockchain, cloud computing, and information security. E-commerce growth is boosting the need for skills in the logistics sector, increasing the demand for warehouse and delivery workers. The manufacturing sector has also experienced heavy hiring related to the high demand for semiconductor parts..
Investments in new laboratories and scholarships seek to boost candidate knowledge as they relate to data analytics, digital marketing, cybersecurity, cloud computing, the blockchain, and robotics. While employers in this market also seek candidates who possess soft-skills such as problem solving, communication and collaboration skills.
Employers are evaluating and modifying existing hiring policies and recruitment process in response to both national and local legislative changes across the nation. While some regulations impact wages or screening processes, others have a direct impact on migration and educational enrollment trends which provide employers with forward-looking indicators to support local workforce planning.
The unemployment rate in the United States is at its lowest since October 1969, and though this is, on one hand, a good thing it is also highlighting the widening skills gap in this market for entry- to mid-level positions across various industries. This pressure is driving the trend of investment in the existing workforce by organizations seeking to upskill and train already engaged talent.
There may also be more registered apprenticeships in the future which allow employers to essentially customize the skills of the emerging workforce while employing low-cost skills for entry-level positions immediately. Other organizations are reaching outside of their local candidate pools to engage the remote workforce and source the desired skills from candidates who can work remotely. These investments coupled with non-wage incentives and other benefits (such as increased parental leave) are aimed at driving workforce engagement and retention.
Unemployment levels are at their lowest rate since 1975 presently in the United Kingdom. Despite growing uncertainty wages have remained consistent. While some employers have shifted their local workforce investments, the strength of the candidate pool and workforce performance remains steady.
The need for technology skills, specifically those relative to digital, data, mobile, cyber and information security is increasing. While competition for candidates remains high, the use of flexible remote work options has broadened hiring market potential and enabled many employers to mitigate the impact of talent shortages. In addition to information technology skills, employers are seeking engineers, nurses and care staff throughout this market, reinforcing the need for continued focus on emerging skills development.
The skills gap is expected to be compounded as the demand for more highly skilled workers increases. Nearly 80% of businesses expect to increase the number of higher-skilled roles within their organizations over the coming years, based on recent surveys. Employers are beginning to evaluate job requirements and qualifications in order to more effectively align with available candidate pools.
The Professional, scientific and technical services sector is one of the fastest growing in Canada, seeing the largest rate of growth since 2008. Programs designed to allow high-growth firms to bring in highly-skilled immigrant talent within two weeks have only bolstered this growth driving a favorable market environment for the immigration of a more skilled workforce.
Changes to provincial law are also driving increased parity and consistency across the labor categories. Each Canadian province has its own diverse workforce ecosystem which is important to bear in mind as English proficiency, industry hubs and skills vary widely across this market. The west is more focused on industrial industries such as oil and gas and mining. While the eastern provinces are more services driven, there are burgeoning professional skills in each province as well as a spike in language proficiency as bilingual skills requirements shift to meet market demands.
International organizations are increasingly trying to replicate the success of remote workforce strategies however this practice has been more difficult to implement in Canada as candidates in this market are less likely to apply for remote work opportunities. Most favor onsite amenities and benefits along with flexible work schedules.
It is expected that some employers based in the United Kingdom are likely to move part of their business to Ireland to maintain a presence in Europe, however, there is still uncertainty regarding a lot of the changes that would be as a result of the United Kingdom leaving the European Union. That said, some companies are already investing in Ireland to ensure they can participate in EU-funded work programs.
It’s anticipated that Ireland will experience its second largest economic growth in the European Union over the next year. Investment in this market is sure to follow however location strategy will be of high importance for organizations as the quality of infrastructure and technological capabilities vary widely from one location to the next within this market.
Some of the key skills seeing burgeoning growth in the last couple years include: call center roles, customer service, financial services, and tech support. While this is not the lowest cost market for these and similar skills the quality of the workforce regarding English proficiency, skill level, and education have continued to remain strong benefits to workforce engagements in this market.
Estonia has invested in the attraction of more technical skills to this market. Recent legislation is designed to offset the cost and complications associated with the recruitment of foreign talent for the benefit of Estonian employers. Not only is this workforce experiencing a boost in skills due to immigration but an increase in female participation in the workforce is also driving skills availability. Increased language proficiency and financial benefits are boosting international investment into this market as the moderate regulatory environment is in line with regional standards.
Skilled trades, information technology, and engineering are the most highly sought-after skills. With unemployment in Tallinn specifically being one of the lowest rates in the European Union at 3% the government is shifting focus to upskilling of the emerging workforce and education. Campaigns that encourage females to study information technology as well as incentivizing those in the labor pool to apply for IT related jobs have become more common as competition for technology skilled talent increases.
Opportunities for contracted and informal engagements are in demand locally, while most employees continue to focus on full time hiring despite candidate interest. Estonia is an example of a market that is rising consistently in the Total Workforce Index™ rankings year-over-year as this market both matures and continues to invest in the skills of its emerging workforce.
Officials in the United Arab Emirates anticipate that 40% of jobs present in the workplace today will disappear in the next 10 years. With this in mind, plans to narrow the skills gap in the United Arab Emirates require careful workforce planning and reforms to education. A rise in business confidence is due to the United Arab Emirates’ economic diversification agenda the growing adoption of digital technologies in the region. With increased investments into artificial intelligence and robotics, there will be an increase in the need for skills in these areas.
The introduction of VAT will also bolster hiring in the accounting and finance professions. Other future in-demand skills based on local recruitment trends include sales, banking and financial services, E-commerce, digital transformation, and information security professionals. Because of United Arab Emirates market maturity, coupled with its location and proximity to the Middle East, this market is used as a regional hub for many organizations and local workforce efforts in the region particularly because of strong language and technology skills
The growing popularity of cloud services and the technology ecosystem in this market is expected to create more than 55,000 jobs in the United Arab Emirates by the end of 2022, according to recent research. The implementation of nationwide initiatives such as UAE Vision 2021 and Smart Dubai, along with similar initiatives in other sectors such as tourism, transportation, education and healthcare, has led to a boost in IT investment across many sectors as well as increased hiring.
Growing demand for technical and professional services candidates is driving core workforce development from low-skilled talent to more highly skilled talent to meet the needs of the current labor market. The number of support and customer service roles is growing as more organizations seek to place more technology sector roles into low-cost markets.
The additional competition in this market over the past several years has increased the cost of doing business in the Philippines, however, it remains among the most cost-effective in the region to leverage local resources. As regulations have shifted and employer investments increased, more skilled workers have remained in the Philippines rather than migrating, further strengthening local hiring potential.
Business processing management is a sector that continues to grow at a high rate. The anticipated growth in the sector is driving the need for higher levels of STEM-educated candidates and forcing the Philippines to design education of the emerging workforce to accommodate the need for these skills. Overall this market is rising in global competitiveness despite small minimum wage increases and a lower ranking in the ease of doing business. This is due to the quality of the skills availability improving while costs still remain very low compared to other markets offering similar skills.
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