The talent level gap between global economies widened as a result of circumstances stemming from the Covid-19 pandemic, but this chasm can be narrowed with proper decision-making by government and company leadership, a report from the Institute of Management Development says.
The IMD's World Talent Ranking 2021 report, which ranked 64 economies based on investment and development, appeal and readiness, said that to sustain productivity under unprecedented crises it was essential to maintain a high level of motivation.
These attributes were most displayed by Switzerland, which was ranked number one for the fifth year running. The European country ranked first in both investment and development and appeal, and third in readiness – the result of public expenditure on education, implementation of apprenticeships, prioritisation of employee training and the overall effectiveness of its health system.
The wider gap “has consequences for leadership responsibilities, as it’s clear that talent attraction and retention is no longer just a policy issue”, Arturo Bris, director of the IMD World Competitiveness Centre, said in a statement.
“It’s also the responsibility of senior executives who need to realise their role in boosting worker motivation, which is not just driven by external factors such as salary, safety or quality of life, but also by the opportunities leaders can provide for workers to reskill, to work flexibly and to have the use of the best tech at their fingertips.”
The coronavirus pandemic caught the world by surprise, bringing economic activity nearly to a standstill. Job losses or reduced working hours due to its impact cost the world the equivalent of 255 million jobs in 2020, the UN International Labour Organisation said in January, nearly four times the number lost during the 2008/09 global financial crisis.
However, the World Economic Forum cautions against overstating the ill-effects of the pandemic, as it would vary by stakeholder: monetary policymakers have the most to lose from unrealistic expectations and investors stand to lose if unrealistic expectations of productivity growth lead them to pay unjustified valuations across asset classes.
Business leaders, on the other hand, should be exuberant because their instinct is to make the most from crisis learning and to innovate, the WEF said.
The top 10 countries on the IMD's index were all in Europe, with those from the continent's western region having dominated the rankings in the last five years. Switzerland, Sweden, Luxembourg, Norway, Denmark, Austria, Iceland, Finland, the Netherlands and Germany displayed the prevailing strength that these economies enjoy in all the factors under consideration.
With the exception of Luxembourg's score of 23 in readiness, none of those in the top 10 registered lower than 18th in any factor.
The study noted that during the 2017-2021 period, Western Europe's dominance reflects a significant difference from Eastern Asian economies, with the latter posting a slight increase, exchanging second place with North America, which experienced a decline.
Conversely, the ex-CIS and Central Europe, and South America regions have room for improvement.
Eastern Asian economies followed in investment and development, and readiness, as they lay importance on education and the development of local talent. They also benefited from a robust alignment between the graduates from all levels of education and the needs of a competitive market.
North America was second in the appeal factor, showing the attractiveness that the US and Canada have in the international talent pool of skilled workers.
“Clearly, mobility issues throughout the pandemic have meant there is less brain drain – well-educated and skilled people leaving their country – everywhere since 2020. But there is not such a marked drop in talent-rich economies than predicted because there has been an increase in motivation,” Mr Bris said.
“Talent-weak economies, on the other hand, are suffering even more from brain drain than is consistent with the blows of the pandemic and the need to find a job anywhere.”
Ukraine was the biggest riser, climbing 13 spots to 46th, on significant improvements in investment and development, and readiness. Jordan was the best improver from the Middle East, rising nine places to 40th.
The UAE improved one spot to 23rd, scoring highest in readiness. Skilled labour, international experience and competent senior managers were among the Emirates' top strengths.
The labour market was one of the worst-hit sectors during the pandemic, forcing concepts like teleworking and home-office to be ingrained in workforces all over the world. In addition, a general shift in preferences of workers towards a more flexible work-life balance have become key documented trends in many of the largest economies in the world, the report said.
In this hybrid environment of working from home for some employees, while others, because of the nature of their tasks, need to be on-site, the decline of organisational and operational culture has been noted, the IMD said. Therefore, since the aftermath of the first pandemic wave, workers’ motivation has become increasingly important for companies to assess and consider to attract and retain talent.
“The separation of individuals teleworking from their workplace has brought not only a degree of deterioration to the organisational culture but also has increased the distance among staff. In turn, such limited interaction with colleagues has negatively affected the employees’ support network,” the report added.
The US, the world's largest economy, improved one place to 14th, with weaknesses lying in the areas of cost of living and collected personal income. China, the second-largest, climbed four places to 36th, improving from 32nd to 22nd in readiness since 2018.
The UK rose two places to 21st, making substantial gains in the readiness factor this year. Singapore dropped out of the top 10, sliding three places to 12th, but improved by six in appeal. Japan fell another spot, being on an overall decline since it was ranked 29th in 2018, but improved its readiness by six places.