The COVID-19 pandemic continues to have a debilitating impact on our economies. Often discussed is the effect of the lockdowns on global demand, output and trade, but one of the other areas of the economy that is potentially going to witness a seismic shift is the hiring of global talent.
Restrictions on movement and international travel, coupled with many companies starting to see the benefits of remote working, are calling into question the efficacy of moving talent across borders. Much of education is shifting online too. What does all of this mean for talent hubs?
European countries take up eight of the top 10 slots in the ranking, owing to their quality of education and the mobility of talent. But what about the others?
We speak with Christos Cabolis, chief economist of the World Competitiveness Center at IMD Business School, about the IMD World Talent Ranking 2020, where Asian economies trail their European peers, the impacts of the pandemic on talent mobility, and more.
Unravel: What are some areas in which Asian economies do well?
Christos Cabolis: Keeping in mind that relevant differences are present between countries, on average, Eastern Asian economies (for example, China, Hong Kong, Japan and South Korea) tend to excel in the Investment & Development pillar of the World Talent Ranking, which measures the level of educational investments and the development of a local highly-skilled workforce to address the needs of the private sector. Meanwhile, Southeast Asian economies (such as Singapore, Malaysia, Thailand and Indonesia) tend to perform very well in the Appeal factor which assesses the extent to which an economy retains homegrown talent along with attracting highly-skilled workforce from abroad.
Unravel: What are the key areas in which they lag?
Mr Cabolis: In general, Southeast Asian economies tend to underperform in the Investment & Development pillar compared to other regions of the world. Conversely, Eastern Asian economies, on average, lag behind in attracting international talent from abroad (Appeal factor).
Unravel: The index evaluates the development, attraction and retention of human capital in 63 economies. Do we see a correlation between the three factors? Why or why not?
Mr Cabolis: These three dimensions are indeed related. The Investment and Development factor measures how an economy develops domestic talent; this naturally has a direct link with the Readiness factor, which measures the quality of the skills and competencies that are available in the country. At the same time, the Readiness factor is also related with the Appeal factor, which assesses the extent to which an economy retains homegrown talent along with drawing from the international talent pool.
Unravel: In the context of international travel coming to a standstill, how difficult is it for companies to hire the best talent from around the world?
Mr Cabolis: At a macro level, we cannot yet see any impact of reduced mobility on the hiring capacity of firms. Also, relevant differences exist among sectors (for example, software company vs construction company) and firm size (small vs multinational company). What we observe is that, in general, firms are adapting to this new situation and in many instances, this has meant a stall in the number of job vacancies available on the market.
Unravel: Will the effects of COVID-19 have some permanent implications on the mobility of talent?
Mr Cabolis: It is still very early to contemplate on permanent implications. A lot depends on when a vaccine will be available and how it will be distributed. Having said that, the following are areas that companies are integrating into their organisational behaviour:
- Sustaining the workforce’s motivation under uncertainty will be fundamental for maintaining the levels of productivity necessary for a smooth transition to a post-COVID environment
- Enabling employees to acquire new or redeploy existing skills, for example, to transition to working from home. This is essential to sustain the effectiveness of the talent pool in the near future so as to tackle the new challenges that may arise after the crisis
- Facilitating the adoption of flexible new technologies that can be redeployed to a continuous changing context.
- Remaining attractive for overseas staff while minimising brain drain
- Related to the previous point, prioritising talent retention
Unravel: The future of work and of workplaces is undergoing rapid changes due to the pandemic. Are countries that are placed higher in the ranking better equipped to deal with the ‘new normal’ of work? How so?
Mr Cabolis: Current reduced mobility due to COVID-19 has no relevant impact on the macro trends related to the retention of local talent and attraction of foreign highly-skilled professionals. However, in the medium/long term working from home and a general reduced work mobility might become more diffused. From a macro perspective, countries that rank high in the IMD World Talent Ranking are well equipped to retain and attract highly-skilled professionals for their companies as they will still be able to provide the conditions that talent seek such as superior quality of life, fulfilling professional opportunities, a safe environment with low criminality rates, good environmental conditions (such as low level of pollution) and attractive salaries.
Christos Cabolis is the chief economist and head of operations at the IMD World Competitiveness Center. He joined IMD from ALBA Graduate Business School at The American College of Greece where he was an Associate Professor of Economics and Finance. Prior to ALBA he was the Executive Director of the International Center for Finance at Yale School of Management. His teaching focuses on courses related to business economics, macroeconomics, corporate finance, financial management and industrial organisation.