IMD World Talent Report 2023

Talent attraction and new work models

José Caballero Senior Economist IMD World Competitiveness Center

Marco Pistis Research Specialist IMD World Competitiveness Center

1. Introduction The results of the 10th edition of the World Talent Ranking (WTR) highlight Switzerland’s continuous domi nance of the ranking. The country has remained in the top position since the inception of the WTR in 2014. Such a success is the result of a talent competitiveness strategy that strives to reach a balance between the develop ment of local talent, the attraction of overseas talent, and their retention. This year, Luxembourg moves up to second place, returning to the top three of the ranking (it ranked three in 2021). Iceland remains in third place, continuing to thrive, particularly in the development of its local talent pipe and its appeal to foreign staff. It is important to note that this year’s survey results show a sharp shift in business confidence in some economies. For example, Belgium experiences a positive shift in several of the survey-based indicators, while Sweden displays a negative trend. At the regional level, Western Europe continues to lead the talent ranking, followed by North America and Eastern Asia. The results show, however, a long-lasting effect of the pandemic. Most of the regions we study have not been able to return to the pre-pandemic levels of talent competitiveness. Such an effect has led to greater talent competitiveness parity between certain regions (e.g., Southern Asia and the Pacific, and Eastern Europe), while increasing the disparities experienced by other regions (e.g., South America). The key determiner has been how well countries in these regions have remained attractive for enticing and retaining talent.

As referred to above, a key component of talent compet itiveness is the capacity to attract and retain talent. At the core of such a capacity is the incentive that career advancement and development provide to potential recruits. In terms of the work structure, the COVID-19 pandemic resulted in a shift toward remote work or a hybrid model which, we find, may be detrimental for the career progression of individuals who opt to adapt to the new model in search of a greater work-life balance. These concerns arise, for example, from the possibility of a proximity bias among managers which can favor those individuals who follow the traditional in-office work model. If new work models lead to the curtailment of the opportunities that organizations offer to their staff, the organizations’ capacity to attract and retain talent may be limited. Such a trend can restrict talent development, and ultimately talent competitiveness, by negatively affecting some of the core elements of competitiveness. With this in mind, we asked partici pants of our Executive Survey about the importance of the relationship between remote work and career development. Based on the results, we identify possible effects of that relationship on talent competitiveness. In what follows, we explore the different talent competi tiveness trends at the regional and country level. We also present our findings about the relationships between new work models and talent attraction and retention. We are delighted to include Kuwait for the first time in the WTR. As with last year’s edition, Russia and Ukraine are not included in the 2023 ranking, due to the limited reliability of the data collected.

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