Switzerland leads the 5th consecutive edition of the IMD World Talent Ranking
- IMD’s fifth edition of the World Talent Ranking 2018 assesses the extent to which countries develop, attract and retain talent to sustain the pool that enterprises employ to create long-term value
- Canada is the only non-European nation in top-10
- The full ranking is available here
Lausanne, Switzerland 19 November 2018 – Switzerland in first and Denmark in second, firmly lead the IMD World Talent Ranking 2018 for the fifth year in a row, followed by Norway, Austria and the Netherlands. Norway joins the top three, advancing four places up from last year, thanks to an improvement in public expenditure on education and the readiness of its talent pool. Canada (6th), Finland (7th), Sweden (8th), Luxembourg (9th), and Germany (10th) complete the top 10.
The Slovak Republic (59th), Colombia (60th), Mexico (61st), Mongolia (62nd), and Venezuela (63rd) are the last countries in the ranking.
“Since 2014, the Talent Ranking assesses how the 63 economies we study develop, attract and retain highly-skilled professionals. Cultivating a skilled and educated workforce is crucial to strengthening competitiveness and achieving long-term prosperity, particularly in the current dynamic landscape where artificial intelligence, robotics and other new technologies constantly redefine the challenges that governments, businesses and society in general will have to face in the future,” said Arturo Bris, Director of the IMD World Competitiveness Center. “This year the most successful countries in talent competitiveness are mainly European, mid-size economies. Moreover, these countries share high levels of investment in education and quality of life,” concludes Arturo Bris.
The IMD World Talent Ranking 2018, which has just been released from the Singapore edition of IMD’s signature program Orchestrating Winning Performance (OWP), evaluates the capability of 63 countries in developing, attracting and retaining talent. The assessment is based on three factors: Investment and Development, Appeal, and Readiness. These factors include indicators that capture the resources invested in developing local talent, the extent to which a country attracts and retains talent, and the quality of skills available in the talent pool.
Hard data and responses to the IMD Executive Opinion Survey are used to produce the ranking. The latter annual survey compiles input from over six thousand executives based in 63 different economies.
Western Europe leads, Eastern Europe lags, North America gives strong performance
This year, Switzerland once again confirms its role as an important global talent hub. It ranks 4th in Investment and Development, and 1st in both the Appeal and Readiness factors. In addition, several European countries fall within the 25 most competitive with respect to talent. Belgium (11th), Cyprus (15th), Portugal (17th), Ireland (21st), United Kingdom (23rd), and France (25th) complete this list.
With the exception of Estonia (28th), Slovenia (30th), and Latvia (33rd), Eastern European countries generally place in the lower part of the ranking. For instance, Slovak Republic (59th), Bulgaria (57th), and Romania (56th) underperform in attracting highly skilled workers from abroad and they also face problems in retaining their locally-grown talent.
Canada (6th) is the only non-European country in the top ten, rising from 11th place, lifted by an improvement in the quality of its talent pool. The USA (12th) also moves up with respect to last year showing advancements in all three talent factors.
Singapore and Hong Kong SAR lead in Asia Pacific
In Asia, Singapore (13th), Hong Kong SAR (18th) and Malaysia (22nd) achieve the best placements in terms of talent competitiveness. While the two city-states continue to excel in tapping into the international talent pool, Malaysia instead focuses on investments in education to develop its homegrown skilled workforce. Taiwan (27th) prioritizes the attraction and retention of talent, Japan improves (29th) due to the availability of skilled labor and the effectiveness of its education system and South Korea advances (33rd) partly due to increased government expenditure on education and improvements in the implementation of apprenticeships programs and employee training. China (39th) places in the second half of the ranking, because of its difficulties in attracting foreign skilled workers paired with a level of public expenditure in education that remains below the average of other advanced economies. Kazakhstan (40th) and Thailand (42nd) also fall in the second half of the ranking, partly due to their performance in the readiness of domestic talent.
In the Pacific area, Australia (14th) and New Zealand (20th) confirm their role as talent-appealing hubs. Both countries show high levels of readiness in their talent pool and offer attractive quality of life for international professionals.
Latin America struggles
At the bottom of the ranking are several Latin American countries. These economies are struggling to develop and retain talent. Venezuela (63rd), Mexico (61st), Colombia (60th) and Brazil (58th) all share issues related to brain drain, matched by a relatively low level of investment in education.
In annex: detailed region and country-specific information
Switzerland tops the talent ranking for the fifth consecutive year confirming its role as an important global talent hub. It ranks 4th in Investment and Development, and 1st in both the Appeal and Readiness factors.
The country ranks 1st in apprenticeships, health infrastructure, highly-skilled foreign personnel, remuneration in the services professions, remuneration of management, the education system, university education and management education. Other strengths include international experience (2nd), retaining human capital (2nd), and quality of life (3rd). The latter, however, shows a slight decline this year.
Switzerland’s lowest rankings at the indicator level are in cost-of-living (59th), labor force growth (38th), pupil-teacher ratio in primary education (30th) and female labor force (26th). There has been an increase in negative perceptions of the prioritization that the private sector gives to attracting and retaining talent which drops to 12th (from 4th).
Denmark ranks 2nd in the overall ranking. Norway takes 3rd place, Finland and Sweden come in at 7th and 8th respectively. Iceland, the only Nordic country ranked outside the top 10, is 16th.
For the third consecutive year, Denmark ranks 1st in the Investment and Development Factor. The country improves three places in the Appeal factor in which it ranks 7th. However, it drops 4 places in the Readiness factor to 8th. Norway improves its performance in all factors, ranking 3rd, 12th and 10th in Investment and Development, Appeal and Readiness, respectively. Finland rises in the Appeal factor (21st) and decreases two positions in both the Investment and Development (7th), and Readiness (7th) factors. Conversely, Sweden remains 9th in Investment and Development, and improves to 9th in Appeal and 15th in Readiness (from 12th and 19th, respectively).
At the factor level, Nordic countries all have their best performance in Investment and Development. Here they are all highly ranked in total public expenditure. Norway, Finland and Denmark rank 2nd, 6th and 7th (respectively) in health infrastructure. In the employee training indicator, Denmark is 1st and Norway reaches 5th place.
In the Appeal factor, most Nordic countries are perceived to have high quality of life and be successful in attracting and retaining talent. Nevertheless, high cost of living and high personal income tax rates may constrain the Nordics from further strengthening their talent pools.
In Readiness, the region ranks high in the availability of finance and language skills. Denmark, Norway and Finland perform well in the effectiveness of their education systems in general, and specifically in management education as well as science in schools. Notably, the indicator capturing the availability of senior managers with international experience is one of the weakest points in the performance of Norway (34th) and Iceland (51st).
Spain is positioned (31st) in the top half of the annual IMD World Talent Ranking.
Among Western-European countries, it ranks ahead of only Italy (32nd) and Greece (44th). However, Spain performs better than almost all Eastern European countries with the exception of Estonia (28th) and Slovenia (30th).
In the Investment and Development factor, Spain drops from 30th to 36th. While in the Appeal factor Spain remains in the 25th spot. In the Readiness factor it improves slightly from 41st to 40th.
The Investment and Development factor includes one of Spain’s key strengths; in the health infrastructure indicator, it ranks 9th. However, this factor also shows some of its main weaknesses. The country ranks 58th in employee training and 55th in the implementation of apprenticeships. This may explain Spain’s relatively poor performance in Investment and Development.
Key strengths lie in Spain’s Appeal factor. In both, the remuneration of management and the quality of life indicators, Spain ranks 19th. Although this factor highlights the need to prioritize attracting and retaining talent (58th position).
Within the Readiness factor, Spain’s performance in indicators assessing the effectiveness of university and management education and the availability of competent senior managers, shows steady improvement since 2016. Yet, there are some weaknesses in this factor. For example, in labor force growth, Spain ranks 53rd and in language skills, it comes in at 52nd.
With the exception of Estonia (28th) and Slovenia (30th), Eastern European countries generally place in the lower part of the ranking.
Estonia improves slightly this year. It ranks 16th in Investment and Development, 33rd in Appeal, and 31st in Readiness. It progresses five ranks in the Appeal factor mainly due to improvements in worker motivation, the impact of brain drain, and the country’s attractiveness for highly-skilled foreign personnel. In the Readiness factor, Estonia also moves up four ranks as a result of an upturn in positive perceptions of the availability of finance skills, executives with international experience, competent senior managers, language skills, and the effectiveness of the education system.
Slovenia moves from 37th to 30th place. It ranks 27th in Investment and Development, 42nd in Appeal and 29th in Readiness. The country’s ranking improvements arise from more positive executive opinions about the private sector’s prioritization of attracting and retaining talent, quality of life, and availability of senior managers with international experience and language skills. There are some worrying signs for the future development of the country’s talent pool. It ranks 59th in the implementation of apprenticeships and 56th in the country’s attractiveness for highly-skilled overseas staff.
Elsewhere in the region, other countries improve to different degrees: the Czech Republic ranks 37th, Ukraine 48th, Hungary 49th and Croatia 54th. Ukraine’s strong performance in moving out of the bottom five originates mainly in gains in the implementation of apprenticeships, emphasis on employee training and the effectiveness of its health infrastructure. In addition, Ukraine improves in the prioritization of attracting and retaining talent, availability of a skilled labor force, financial skills and competent senior managers.
Conversely, Lithuania (33rd to 36th), Poland (34th to 38th), and Russia (43rd to 46th) all decline.
At the lower end of the ranking, Romania (56th), Bulgaria (57th), and the Slovak Republic (59th) all decline in the Investment and Development factor. In the Appeal factor, the Slovak Republic and Bulgaria drop, and Romania rises. While Bulgaria and Romania slightly improve in the Readiness factor, the Slovak Republic drops several ranks because of a deterioration across all components of the factor.
In Asia, Singapore (13th), Hong Kong SAR (18th), and Malaysia (22nd) achieve the best placements in terms of talent competitiveness. Compared to last year, Singapore keeps the same position in the ranking, Hong Kong SAR declines by six places and Malaysia moves up by the same number. The two city-states continue to excel in appealing professionals from abroad to sustain their top-tier talent pool, but lag behind in terms of public investment in education. Conversely, Malaysia’s progress in the ranking is rooted in investments in education to develop its homegrown skilled workforce, in addition to improved perceptions of the quality of the talent pool available in the country.
China (39th) places in the second half of the ranking because of its difficulties in attracting foreign skilled workers paired with a level of public expenditure in education that is below the average of other advanced economies.
Indonesia (45th) and the Philippines (55th) show the opposite trend between 2017 and 2018. Indonesia advances by two places, following improvements in several indicators related to investment in education. On the other hand, the Philippines experiences a ten-position decline from last year, due to a sharp drop in the Readiness factor (37th, from 11th in 2017). This change is driven by a marked deterioration in every criterion related to the business community’s perceptions of the quality of education as well as a decline in labor force quality.
In the Pacific, Australia and New Zealand reaffirm their role of talent-appealing hubs, showing high levels of readiness in their talent pool and offering attractive quality of life for international professionals. Both countries moved by five positions compared to last year. However, Australia advances from 19th to 14th while New Zealand declines from 15th to 20th.
In the Middle-East, Israel (19th), Qatar(24th), and the UAE (26th) stay in the first half of the ranking. Israel moves up one position with respect to last year, thanks to improvements in its attractiveness for highly-skilled international professionals and in perceptions of the quality of managers available in the country. On the other hand, compared to 2017, the UAE and Qatar lose one and two positions respectively. In the former case, the decline is mainly driven by a worsening of indicators related to investment in education, while in the latter it is led by a slowdown in labor force growth.
Saudi Arabia (34th), Jordan (41st) and Turkey (51st) perform below average compared to the countries included in the overall analysis. Saudi Arabia experiences a drop of eight places from last year, mostly due to a sharp decline in the Readiness factor (38th from 26th in 2017). This result is explained by rising concerns about the education system and the quality of the available talent pool, in addition to the partial decrease in labor force growth. Conversely, Jordan moves up by eight positions compared to 2017, thanks to the increase of investment in talent development and the enhancement of the business community’s perceptions of the quality of the education system. Turkey also shows a two-position improvement from last year, supported by progress in both the Appeal (50th) and Readiness (48th) factors.
Among the BRICS countries, South Africa remains in the middle position (50th) performing better than India (53rd) and Brazil (58th) but lagging behind China (39th) and Russia (46th).
At the factor level, South Africa ranks 56th in Investment and Development (up from 57th), 37th in Appeal (slight decrease from 35th) and 51st in Readiness (an increase from 52nd).
The improvement in Investment and Development can be primarily understood by the country’s performance in the female labor force indicator (up 13 places to 23rd). The decline in Appeal is mainly the result of a negative turn in the perceptions of the private sector’s prioritization of attracting highly-skilled foreign personnel (38th from 31st). Readiness improves principally on the back of increases in the perceptions of the effectiveness of the education system (52nd from 60th) and university education (41st from 48th) as well as the prioritization of science in schools (53rd from 60th).
South Africa’s strengths are in total expenditure on education, in which it increases one spot to 3rd, the cost-of-living index (1st), the personal income tax rate (3rd), and labor force growth (22nd).
Its main weaknesses are in the pupil-teacher ratio in both primary (62nd) and secondary education (61st), implementation of apprenticeships (61st), worker motivation (60th), remuneration of managers (58th), and the availability of skilled labor (58th).
Beyond the above weaknesses, other indicators that may also help us understand the country’s low ranks are health infrastructure (50th), brain drain (55th), personal security and private property rights (52nd), availability of senior managers with significant international experience (56th), and availability of competent senior managers (53rd).
Several Latin American countries rank at the bottom of the 2018 World Talent Ranking. These economies struggle in developing and retaining talent. Brazil (58th), Colombia (60th), Mexico (61st), and Venezuela (63rd) all share issues related to brain drain, matched with a relatively low level of investment in education.
There are improvements elsewhere in the region: Argentina moves to 47th (from 50th), Chile to 43rd (from 44th) and Peru to 52nd (from 57th).
Argentina shows performance gains in all three factors; progressing in Investment and Development from 55th to 53rd, in Appeal from 53rd to 48th, and in Readiness from 46th to 44th.
Despite a slowdown in Investment and Development (from 53rd to 55th) and Appeal (from 27th to 30th), a strong performance in Readiness (from 43rd to 35th) drives Chile’s slight improvement in the overall ranking (from 44th to 43rd). The decline in Appeal results primarily from an increase in cost of living and the impact of brain drain in the economy.
Peru performs well in the overall talent ranking mainly as a result of improvements in government expenditure on education (per student), the reduction of the impact of brain drain, labor force growth, the availability of executives with significant international experience, and competent senior managers.
Colombia’s decline in the ranking is due to an increasing cost-of-living, the deterioration of labor force growth, and student mobility (inbound). In addition, there is an increase in negative perceptions of the implementation of apprenticeships, prioritization of employee training, the impact of brain drain, the emphasis given to science in schools, and the effectiveness of management education.
Brazil’s drop from 52nd to 58th is mainly due to its performance in the Investment and Development, and Appeal factors in which it drops from 45th to 49th and from 47th to 53rd, respectively. The country’s performance in the Readiness factor remains at 61st place.
The country’s decline in Investment and Development results from an overall decline in most of the components of this factor. Public expenditure on education, the quality of primary and secondary education (measured by a pupil/teacher ratio), implementation of apprenticeships and prioritization of employee training all drop, albeit to different degrees. The health infrastructure remains at 62nd.
Similarly, Brazil’s ranking in the Appeal factor has been negatively affected by a decline in attracting and retaining talent (48th), worker motivation (50th), quality of life (58th), and by personal security and private property rights (59th).
The Readiness factor includes some of Brazil’s main weaknesses; the education system (62nd), science in schools (63rd), and language skills (63rd).
Across all factors, Brazil’s main strengths are the indicators on total public expenditure on education (10th), government expenditure on education per student (30th), its female labor force (39th), an effective personal income tax rate (11th), and labor force growth (16th).
Mexico’s drop to the bottom five of the ranking originates in an across-the-board decline. It came in at 61st in Investment and Development, 43rd in Appeal, and 54th in Readiness.
Investment and Development show some worsening signs. The total public expenditure in education declines to 54th (from 49th). Also, business executives’ negative perceptions of the implementation of apprenticeships and the private sector’s prioritization of employee training severely heighten, dropping from 31st to 45th and from 36th to 54th, respectively.
The drop in the Appeal factor (from 33rd to 43rd) is mainly due to an increase in negative perceptions of the level of worker motivation (41st), brain drain (44th), and the country’s quality of life (49th). This factor also includes some of Mexico’s main weaknesses: the prioritization of attracting and retaining talent (60th), and the protection of personal security and private property rights (60th).
There is also a negative turn in executives’ perception of several elements of Readiness. There are declines in the availability of skilled labor (41st from 36th), finance skills (56th from 46th), and language skills (55th from 49th). Perceptions of the effectiveness of university education (50th from 43rd) and management education (51st from 45th) also drop. Similarly, but to a lesser degree, perceptions of the prioritization of science in schools decline (from 55th to 57th).
Mexico’s main strengths are in cost-of-living (5th), remuneration of management (22nd), an effective personal income tax rate (24th), and labor force growth (24th). The level of the country’s attractiveness to highly-skilled foreign personnel remains a strength despite slightly dropping to 31st (from 29th).