Total Workforce Index Finds Opportunities Exist… If You Know Where to Look
Differentiating and diversifying workforce strategies to access the right combination of skills, workforce mix, and labour markets has never been more important and challenging. In our previous article, Total Workforce Index Addresses Organisational Challenges Most Impacted by Lack of Growth Talent, we examined the business challenges most impacted by growth talent and how to leverage market intelligence tools like the Total Workforce IndexTM (TWI) to stay competitive.
This article takes a look at three key opportunities uncovered in the latest 2021 TWI analysis and how organisations should respond.
Whether an organisation’s strategy shapes retention and development of existing talent or plots optimal pathways to new sources of talent, data from the Total Workforce Index can de-risk workforces across more than 200 key factors that relate to the Workforce Supply, Cost Efficiency, Regulation and Productivity in 75 markets around the world.
Analysis of the TWI categories reveals three types of labour markets, each with strengths and weaknesses.
Mature markets: These 20 markets are home to the largest contingents of growth talent (average 40% skilled workers) and have infrastructures to support upskilling and reskilling; exposed to wage inflation.
Incubator markets: There are 16 high-potential markets for Digital Services, Advanced Manufacturing and Clean Energy technologies and they provide an opportunity to balance skilled labour with cost competitiveness.
Emerging markets: These are 31 markets with a rising Gen Z/millennial workforce. They represent 50% or greater share of the total labour pool but have a shortage of skilled talent due to low rates of tertiary education. They also require long-term investments.
TWI data and insights reveal three key opportunities amidst today’s labour market realities, which are impacted differently by market type.
Opportunity #1: Elevate Learning as a Core Benefit in all Labour Markets
Recent ManpowerGroup research shows workers want learning and reskilling opportunities—meaning companies looking to hire or retain workers should make this part of their benefits package. The ability to secure talent needed for growth, especially in Emerging markets, is likely to depend increasingly on compensation strategies and skills development offerings.
For employers willing to step into the role of educator in Emerging markets, the long-term payoff could surpass Mature markets. If it takes money to make money, investing in your talent could be the greatest investment an organisation can make.
Emerging markets have half the number (20%) of highly skilled workers as Mature markets (40%) with only 19% of workers aged 25+ having a tertiary education, compared to 39% in Mature markets.
Opportunity #2: Segment Incubator Markets to Hedge Wage Inflation in Mature Markets
Incubator markets hold the potential to supply highly skilled growth talent to specific fast-growing industries at cost-competitive rates while contributing to longer-term talent sustainability.
Opportunities have been identified in three industries: Digital Services, Advanced Manufacturing and Clean Energy. R&D inflows for Incubator countries suggest governments are co-investing to build growth capabilities in these sectors. At the same time, the generational mix indicates a long-term payoff for companies choosing to invest in Incubator markets.
Advanced Manufacturing Incubator Markets have a young (39% Gen Z/millennials), highly skilled workforce (33%) with an average monthly wage nearly half that of Mature markets.
Targeted investments in Incubator markets will meet the defining talent challenges of the post-pandemic age – namely, accessing industry-specific growth talent in high-potential markets at competitive rates. These are possible medium-term investments that have the potential to bring access to new markets and skills that can boost growth in existing markets.
Opportunity #3: Integrate Contingent Labour as an Essential Strategic Sourcing Channel
Contingent labour is now an essential sourcing option for companies looking to diversify their skills mix and power their digital shift with growth talent.
Demand for contingent work has increased by 9% in the past year1, continuing a trend we’ve seen in in TWI data since 2013. Within that, highly skilled contingent work is especially being utilised in Mature markets.
In Mature markets, 40% of contingent work is among highly skilled.
In fact, rather than undermining permanent work (as previously feared), contingent labour now augments permanent work and offers access to highly skilled workers who are increasingly moving to contingent work in their search for increased flexibility and autonomy post-pandemic.
How to Seize the Opportunities
Market intelligence tools such as the Total Workforce IndexTM (TWI) have become a go-to intelligence source that has proven to be a difference-maker in a company’s ability to execute growth strategies.
Organisations can also conduct customised analyses with the weightings for data adjusted to factors that drive growth uniquely within a specific industry and market(s). The opportunities for customisation are extensive.