Switzerland is the best country at developing and attracting talent, according to the 2020 World Talent Ranking from the Institute for Management Development (IMD). The European country ranks first in two of the study’s three subcategories: ‘investment and development’, which measures how an economy encourages domestic talent; and ‘appeal’, which assesses how an economy retains local talent while appealing to the international workforce. In addition, the country is commended for its robust apprenticeship system and ability to attract highly skilled foreign workers.
Denmark holds onto second place and is praised for its prioritisation of employee training, its level of worker motivation and its fair administration of justice. Luxembourg takes third, up from fifth place in the 2019 study. It is praised for its high-quality primary school education, with a pupil-teacher ratio of 9.05. Luxembourg also has the highest level of public expenditure on education per student ($29,052) out of all 63 economies analysed.
Western European countries dominate the overall ranking, taking up eight of the top ten spots. The two exceptions, Canada and Singapore, rank eighth and ninth, respectively. Singapore also places first in the ‘readiness’ subcategory, which evaluates an economy’s quality of skills and competences.
How talent links to FDI
As illustrated in the table below, there is a clear connection between an economy’s talent competitiveness and foreign direct investment (FDI) performance. In IMD’s 2020 ranking, western European countries performed the best out of all eight regions included, with an average ranking of 15.47 out of the 63 positions. According to data from the UN Conference on Trade and Development, the region also attracted the largest number of greenfield FDI projects in 2019, with the announcement of more than 5,700 projects. North America (defined as the US, Canada and Mexico by IMD) was ranked second best in terms of average talent (26.33) and recorded the second-highest number of FDI projects (more than 3000).
Unsurprisingly, the regions that ranked lowest for talent were also less successful in attracting FDI projects. The least talent competitive region in IMD’s 2020 study is ex-CIS and Central Asia, with an average rank of 53.67. It also attracted the lowest number of greenfield FDI projects of the eight regions in 2019, with just over 350 projects. Russia has experienced the largest downturn of the 63 economies included in the ranking, falling seven places from 47th in 2019 to 54th in 2020. It scores low in indicators across all three subcategories including levels of employee training, worker motivation and labour force growth. Kazakhstan has also dropped significantly, down six places from 38th to 44th, ranking poorly for quality of both university and management education.
IMD’s 2020 ranking, which uses a combination of quantitative data from 2019 and survey responses from January to April 2020, does not reflect the full impact of the Covid-19 pandemic on talent competitiveness. However, the accompanying report does note that companies that embrace flexibility in their work practices and are adaptable when employing available talent are better equipped to cope with the current crisis. Sustaining motivation within the workforce is also essential to maintain productivity post-Covid-19. In addition, the report warns against countries turning inwards post-crisis to revitalise their economies, reiterating the importance of openness to foster and attract talent, and in turn the significance of talent competitiveness in economic recovery.