Differentiating and diversifying workforce strategies to access the right combination of skills, workforce mix, and labor markets has never been more important and challenging. The previous article, Total Workforce Index Addresses Organizational Challenges Most Impacted by Lack of Growth Talent, examines the business challenges most impact by growth talent and how to leverage market intelligence tools like the Total Workforce Index (TWI) to stay competitive.
This article takes a look at three key opportunities uncovered in the latest 2021 TWI analysis and how organizations should respond.
Whether an organization’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 labor 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 labor with cost competitiveness.
Emerging markets: These are 31 markets with a rising Gen Z/millennial workforce (50% or greater share of total labor pool) but a shortage of skilled talent due to low rates of tertiary education and they require long-term investments.
TWI data and insights reveal three key opportunities amidst today's labor market realities, which are impacted differently by market type.
Opportunity #1: Elevate Learning as a Core Benefit in all Labor Markets
RecentManpowerGroup research shows workers want learning and reskilling opportunities—meaning companies looking to hire or retain workers should make learning 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 organization 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 as 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 ($2,314) 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 Labor as an Essential Strategic Sourcing Channel
Contingent labor 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 year , continuing a trend visible in TWI data since 2013. Within that, highly skilled contingent work is especially being utilized 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 labor 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 Index (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.
Organizations can also conduct customized analyses with the weightings for data adjusted to factors that drive growth uniquely within a specific industry and market(s). The opportunities for customization are extensive.
Download the 2021 summary reportor visit the TWI website to explore the data and rankings. Reach out to the Talent Solutions Consulting team to learn more about customizing the TWI for your organization.