ECJ EUROPEAN Cleaning Journal

Europe’s got talent, and has the plaudits to prove it. But the region will need to up its game still further if it is to remain a global skills magnate at a time of fast-paced demographic change, writes Hartley Milner.

THE SWISS have found themselves the butt of more than their fair share of lampooning around national stereotypes down the years, much of it of eye-rolling banality.

In the film The Third Man, for instance, Orson Welles’ character Harry Lime says: “In Switzerland, they had brotherly love, they had 500 years of democracy and peace … and what did that produce? The cuckoo clock!” Much the same can be said of jibes decrying the Alpine state as a nation of wooden bear whittlers or yodeling goat-herders.

Switzerland has long laid such dated tropes to rest by showing the world it has a great deal to yodel about. Today, the small landlocked country punches well above its weight internationally, having one of the highest levels of per capita GDP, driven largely by the services sector. Along with a thriving economy, its citizens enjoy some of the highest standards of healthcare and well-being, housing, education, public transport, environmental stewardship and societal security. Life expectancy is also high, around 84 years.

So it is no surprise Switzerland has become a seductive destination for expats seeking a new life and job opportunities. In fact, it ended 2023 as the best country for attracting and nurturing skilled workers in the Global Talent Competitiveness Index (GTCI) for the 10th successive year.

High earning potential

Key to the country’s consistent chart-topping success is the high earning potential it offers, coupled to one of the lowest tax rates. The average salary for a single person is €81,818 a year. Zero income tax is paid on the first €13,600 to a maximum of 13.20 per cent on earnings of €166,200 and above. While living costs are notoriously high, inflation remains among the lowest in the world, at 1.70 per cent in December.

European countries dominated the talent table, taking 17 of the top 25 places behind Switzerland, Singapore and the United States. Also prominent in the rankings were Denmark, the Netherlands, Finland, Norway, Sweden, the United Kingdom, Luxembourg and Ireland. Germany, Iceland, Belgium, Austria, France, Estonia, Malta and the Czech Republic also made the cut.

Looking back at the past decade, the GTCI report highlights that the top positions have remained remarkably stable over the years. Eight of the highest placed countries in the top 10 in 2023 were also among the top 10 in 2013 when French not-for-profit business school INSEAD first started publishing the index.

Titled ‘What a Difference Ten Years Make and What to Expect for the Next Decade’, the report flags that all these nations have built reputations as attractive places to build careers and raise families. In this, it says they are showing the way for other countries to sustainably boost their economies during a period of worldwide skills shortages.

However, Europe’s continuing dominance of the standings is far from assured, according to Doris Sohmen-Pao, chief executive officer of the Human Capital Leadership Institute and knowledge partner of the GTCI. She said: “While there has been minimal movement in the rankings over the past 10 years, there have been rapid changes in talent management across industries. This is especially so within companies as they respond to technological transformations and the Covid pandemic, as well as the drive for sustainability. We imagine the next decade will see more visible changes in the rankings with countries in Asia advancing in competitiveness, mirroring growth across their industries.”

Cracks are already beginning to appear in the status quo. Emerging economies among the 134 countries that comprise the GTCI are showing themselves to be especially tenacious. The United Arab Emirates (UAE), South Korea and Israel have all joined the top 25, while China and Russia climbed to 40th and 52nd place respectively. Indonesia leads developing states as the most prolific climber over the past 10 years while Mexico and Brazil are also advancing strongly. At the same time, some European countries slipped in the rankings, including the UK, Luxembourg and Iceland.

But why the disruption now after such a long period of stability? “Changes are brewing beneath the surface,” explained Felipe Monteiro, INSEAD senior affiliate professor of strategy and co-author of the report. “If we take the combined GDP of the E7, meaning the seven top emerging economies, they are comparable to the G7. Actually, if we take in the PPP (purchasing power parity) terms, they could be even higher.”

World of work transformation

Stressing the advances made by China, Indonesia, Mexico and Brazil, Monteiro added: “All four countries have improved in their ability to retain talent. Since 2020, the share of countries from Latin America, western Asia and the Middle East which have become talent champions has also increased.”

The GTCI authors set out how they see the next 10 years unfolding:
• Talent will gain even more importance as an element of competitiveness, innovation and geopolitical soft power for nations, cities and organisations.
• As uncertainties and international tensions continue to proliferate – in trade, investment, politics and diplomacy – so will ‘talent wars’.
• The world of work will further transform, driven by evolving expectations from younger generations, new economic models and emerging technologies like artificial intelligence (AI).
• Cities and regions will pioneer new talent strategies and innovation. Quality of life and sustainability will be critical for those aiming to become talent hubs.
• Global talent-focused policies will be crucial to prevent tensions and harness human and technological potential for a better, more sustainable and equal world.
• Skills and education will remain vital tools to empower workers to make meaningful contributions to their economies and societies.

The report cites a number of trends over the decade. One of the most recurrent themes shows the global talent competitiveness landscape is “fraught with inequalities”. Poorer countries do not perform as well as richer economies in attracting skills, and despite progress in reducing gender gaps women continue to be held back in terms of pay and career growth. The post-Covid recovery may deepen these disparities further, it suggests.

AI and new work practices that emerged following the pandemic are also changing the jobs landscape, affecting both unskilled and highly skilled workers. In the new world of work, quality of life is becoming increasingly important. This is especially so for younger, higher educated jobseekers who may pass over high-demand skilled positions for more meaningful employment where they can contribute to society or which offer a healthier work-life balance. Gig work (temporary employment) and short-term contracts are also becoming the new norm for a growing number of people.

The European Union as an economic alliance is no less exposed to such impacts. Labour force shortages persist across business sectors and skill levels, starving employers of the workers they need, especially small and medium-sized enterprises. Unemployment across the region was at a record low of six per cent in October 2023, and during the previous year job vacancies rose to 2.9 per cent … more than double the level in 2012.

Demographic shifts will only exacerbate the situation. The EU’s working age population is expected to decline from 265 million in 2022 to 258 million in 2030, due in part to a tumbling birth rate and people leaving the jobs market. Europeans are living longer and healthier lives than ever before. In coming decades, the share and number of older people will increase radically, posing challenges for the staffing and financing of civic amenities such as pension systems, health and social care sectors.

Skills at a premium

“With skills at a premium worldwide, the EU’s future competitiveness will be determined by our capacity to staff our industries,” said Margaritis Schinas, vice-president for the promotion of the European way of life at the European Commission. “Our drive to fill labour market gaps has to start at home, with robust measures to support the domestic workforce. But labour migration can be an important complementary means of filling persistent gaps.”

To stay up in the global skills league, the European Commission is proposing a ‘talent mobility package’ comprising three actions:
• Making recruitment from outside the EU easier.
• Faster recognition of professional qualifications and skills gained in
third countries.
• Fostering learning mobility, providing opportunities for students of all ages to develop valuable skills by going abroad to study or undertake training.

The Commission has further plans to create a talent pool of skilled jobseekers from beyond its borders. The aim will be to more quickly match skilled third country nationals with employers while helping both negotiate EU recruitment processes, living and working conditions. It is hoped the measure will also give imported workers greater protection from exploitation.Plus talent partnerships will be struck up with key donor countries to promote mobility for work or training,
so increasing opportunities for legal migration while making unregulated passage less appealing.

“The new EU talent pool will be a game-changer … the first EU-wide platform matching employers in the EU directly with jobseekers of all skills levels, all around the world,” Schinas added.