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contents Executive summary, 2 Essays and Insights, 4 Leadership Consulting – How to attract, develop and retain talent in a shifting global landscape, 4 Consumer – I shop therefore I am, 6 Professional services – Rising temperatures, 8 Technology – A future imperative, 10 Industrial – The tale of two worlds, 12

Mapping Global Talent Essays and Insights Welcome to the Global Talent Index, a unique research study designed to identify where talent is located in the world today and where it will be located five years from now.

Life Sciences – A healthy future? 14

The wall map demonstrates talent’s distribution in 2012, while this booklet of

Financial Services – Accounting for talent, 16

short essays examines the challenges and opportunities opening up in different

Appendices, 18 Methodology, 19 Global Talent Index maps, 20

industries. The theme that recurs repeatedly is that the successful organizations of the future will be those able not just to attract the brightest global talent, but nurture, develop and retain it by offering a compelling work environment and sophisticated succession strategies.

Global Talent Index weighting, 22 Overall GTI rankings, 23

I believe it will be the provision of a learning environment that will determine

Demographics, 24

the iconic market leading companies in years to come. We already know that

Quality of compulsory education, 25 Quality of universities and business schools, 26 Quality of the environment to nurture talent, 27 Mobility and relative openness of the labor market, 28

Generation Y – those born between 1977 and 2005 – will have had an average of fourteen jobs by the time they are 38. The next generation is more demanding, fickle and sophisticated than any other. Sophisticated talent demands sophisticated talent management.

Stock and flow of foreign direct investment, 29

I hope the Global Talent Index reveals a lot more about the future we face and

Proclivity to attracting talent, 30

how we can best prepare for it. Ignorance is bliss? Not in the world of talent.

Further reading, 31 Economist Intelligence Unit, 32

L Kevin Kelly CEO, Heidrick & Struggles, September 2007

Executive summary Talent is the new oil and just like oil, demand far outstrips supply

This combination of objective data and local

In early 2007 Heidrick & Struggles, in partnership

Economist Intelligence Unit to assess the more data-

The results in the lower half of the rankings are more

with the Economist Intelligence Unit, undertook a

poor economies: allowing us to tell a talent story that

ambiguous. Not all countries in the bottom ten

study to encapsulate the current state of global talent

would otherwise have remained hidden.

are equal: they range from Greece to Iran, through

knowledge proved particularly helpful in enabling the

and its future configuration around the planet. Which countries have the strongest pipeline? Where will talent thrive over the next five years? What will change? And what impact should that have on how companies plan strategically for the medium term?

Brazil and Saudi Arabia. In part this comes down to

Money talks The findings confirm a basic suspicion – talent follows where money leads. As a consequence, perhaps unsurprisingly, talent is most likely to be found in

the number of countries selected – analysis of thirty economies cannot fully reflect the different levels of development across the world. Nevertheless, certain themes emerge, particularly from the bottom five.

The resulting research, incorporating the data analysis

developed, wealthy economies, led by the US (which

A common trend is that several of the least promising

of thirty countries, shows subtle shifts and changes

tops the table in 2007 and 2012), followed by the UK

performers do not currently boast fully-functioning

as it measures global talent in 2007 and anticipates

and Canada and the two smaller, but open economies of

democracies. This opens up an interesting avenue for

future realities in 2012. Using a unique and proprietary

Sweden and the Netherlands. The inclusion of Sweden

further research into the links between an open society

algorithm, the Heidrick & Struggles Global Talent

and the Netherlands, along with Australia, in the Top

and the development of talent.

Index (GTI) uses quantitative and qualitative data to

10 talent rankings shows that this trend is consistent

measure the economic indicators, cultural contexts,

even in countries where demographic factors are weak.

trends in education, foreign direct investment (FDI),

Specifically: it is not just the size of the potential talent

mortality, health and market fluidity that will impact

pool that matters, but how it is nurtured.

the ability of talent to thrive within these countries.

Political structure influences talent growth

Heidrick & Struggles Mapping Global Talent: Essays and Insights

BRIC is IC by prior academic studies conducted by the Economist

Foreign direct investment remains a key catalyst for the development of talent

Intelligence Unit, is that the often repeated, media

Malaysia exemplifies the power of foreign direct

and 7th to 8th for Australia) is more the result of

friendly ‘BRIC’ story – the inexorable rise of Brazil,

investment (FDI) and achieves its 12th place position

China’s advance rather than any intrinsic deterioration

Russia, India and China – is more accurately expressed

(in both 2007 and 2012) largely because of the amount

of their talent pools – indeed, Germany’s overall score

as an ‘IC’ story.

of foreign investment flowing across its borders. FDI

actually improves by one point in the five year period

is at a premium within the talent index since it is

analyzed by this study. This note of caution should

normally accompanied by imports of technological

be borne in mind when examining any index as small

and managerial best practice. In addition, as foreign

changes in score can combine to result in significant

companies become established they often seek to replace

alterations in rank. A case in point is Argentina, which

expatriates with local employees, creating demand for

falls by four places on the back of a score that falls by

new jobs and new skills. Mexico is another example of

only two points.

A key finding revealed by this research, and supported

India and China sit in the top ten (10th and 6th respectively in 2012) whereas Russia occupies 18th place both now and in 2012, and Brazil falls from 23rd place now to 25th place in five years time. The fact that Russia stays stable overall masks a gradual erosion in the quality of its compulsory education system, which has been steadily falling since the collapse of the Soviet Union in 1991. In spite of the increased investment in higher education, weaknesses in primary and secondary education provision are likely to have an adverse impact on the country’s ability to develop its talent resources over the longer term – a waste of Russia’s undoubted natural potential. China and India do benefit from their large populations but China also performs relatively well in terms of its educational infrastructure and its

than they are. Two slightly weakening performers would seem to be Germany and Australia, but their fall in the rankings by one place (from 6th to 7th for Germany,

the potential power of FDI, rising two places (from 21st place to 19th place) because of a strong rise in the stock of FDI over the forecast period. Mexico’s proximity to the US and its entry into the North American Free Trade Organization (NAFTA) in 1994 has given it the edge over other Latin American countries (for example Brazil), boosting annual FDI inflows to

Today’s leading pools of talent may not be under pressure just yet but companies who want to flourish in the future must adopt a global view of recruitment. China and India are emerging as significant players and cannot be ignored. All over the world employees are

around US$20bn.

behaving as consumers, able to pick and choose the companies they wish to work for: employers

ability to attract foreign investment. Meanwhile India

Black and white and shades of grey

out-performs China on several measures related to

The GTI concentrates on seven focus areas (see

a powerful, persuasive reputation for talent

the labor force – widespread knowledge of English

Methodology on page 19). The Index is a subtle tool,

management if they are to safeguard their

throughout the general population being an

but in certain cases the brushstrokes are too broad,

long-term talent resources.

obvious example.

making changes in the rankings appear more dramatic

must to do everything they can to cultivate

Global Talent Index, developed in co-operation with the Economist Intelligence Unit

Leadership Consulting

How to attract, develop and retain talent in a shifting global landscape

The implications of the Global Talent Index

Executives are also expected to have far more cross-

(GTI) for identifying, developing and retaining

sector experience than before with a track record of

the best executive talent are four-fold:

making lateral moves during their careers. In response

• The search map – the area in which talent can be found – has changed. • New global leaders must have very specific competencies. • Development opportunities need to be much more targeted. • Retention should start on the first day of employment.

international high-fliers proactively and for the long term. For example, Heidrick & Struggles’ China initiative specifically tracks Chinese nationals with international backgrounds who want to return home. Search firms need to continue to work much more strategically with companies; the ad-hoc filling of empty posts as they arise needs to be replaced by a holistic, focused and flexible approach which incorporates the assessment, development and training of existing executives alongside the recruitment of new talent.

The search map Our research shows a significant expansion in the area

The new global leaders

of the search map. Most searches for large companies

The complexity, pace and global platform of today’s

are now global, targeting executives in Asia, Europe and

business environment demands a special set of

the US for key positions in international companies

characteristics. Apart from heightened requirements

all over the world. This new class of global executive

in terms of background and experience, the leadership

has common features: they have an MBA from a top

criteria have changed dramatically over the last 10

Dr Elisabeth Marx

business school; they have several years of international

years: there is now no substitute for global leadership

Leadership Consulting

experience and are typically fluent in several languages.

experience. However, when looking at the GTI and

[email protected]

My own research revealed that in 1996, only 42% of

the concentration of talent across the globe, one key

top CEOs in the United Kingdom had international

question emerges: how can we better assess the global

experience but by 2005, this figure had nearly

leadership capabilities of the various talent pools?

doubled with 79% of chief executives boasting experience abroad.

to the ‘War for Talent’, search firms are now tracking


From a search consultant’s point of view these are

common complaint is that while there are individual

negotiating and listening. In the future, to give

the essential characteristics to look for in the new

strengths, “the team is not working together”.

executives the support they require, we would expect

global leader.

Companies are already beginning to address this issue,

the provision of such skills to be provided by business

and we are seeing much more active intervention at the

school programmes and follow-up coaching.

International literacy • Operating in different geographic regions. • Understanding the cultural differences of employees and customers. • Dealing with ambiguity – those executives who

top level as CEOs engage external help in aligning the

Retention and career management of the best

team with business strategy.

The new development program

The best are constantly offered jobs by your competitors

demand an excessive amount of certainty and rigid

Large companies are increasingly creating their own

frameworks do not generally adapt well to the

universities to train staff from around the world.

complex cultural patterns of working in foreign

There has also been a rise in the provision of in-house

countries and with different sensibilities.

and bespoke programs from international business

• Enjoying diversity in a psychological sense.

schools. Samsung, for example, has created its own

Managing paradoxes • Taking a helicopter-view and think strategically whilst keeping the focus on operational results. • Switching easily between different modes: from

productive career support and development.

nationalities from leading business schools and

prevent sensible career discussions from taking place.

universities around the world, and then putting them

Bosses often completely avoid the subject with their

through its in-house training and development center.

employees, leaving the employee feeling under-valued

saving to expansion and growth.

is also exploding, answering a growing demand for

and unfulfilled, resulting in turnover at the most senior level. Having an internal or external career development function helps executives clarify what they want and

the development of ‘softer’ skills such as teaching,

what they would like the next step of their career to be.

the key characteristic of future top executives.

The emphasis on the CEO as the ‘hero’ is waning. Business success at the top (and farther down the organization) depends on the leader pulling effective teams together. Our research shows that very few companies have highly effective teams at the top and a

of their motivational make-up so that you can offer

Employer anxiety about top executives leaving can

The coaching industry, a largely unregulated area,

The ability to build successful teams

time? The answer is a better analysis and understanding

talent pipeline by first recruiting people of different

long-term thinking to short-term, and from cost• The flexibility to handle these potential paradoxes is

– how can you retain them over longer periods of

“The answer is a better analysis and understanding of their motivational make-up …”

The company is then able to construct a scenario where this can be achieved. The companies that will grow in this new talent geography are those which coach, motivate and develop their own talent in tandem with an inclusive, global recruitment process.


Consumer

How do you cater to a fickle global

– for example, in the US, Home Depot and Sears

consumer who wants the latest and greatest

hold sway in the homeware arena, in the UK grocery

I shop therefore I am

product for half the price? That is the

store Tesco is the leader, while Carrefour dominates in

question troubling the consumer industry.

France.

Higher levels of discretionary income

These giants expect the very latest in product

with the rise of the middle classes in India

development, durability, design and price and

and China, combined with ever more

small scale suppliers – finding it hard to keep up

sophisticated consumer tastes, have created

– are increasingly being incorporated into larger

a world where the customer is king (but

conglomerates with only the Nestlés, the PepsiCos and

always on the look out for a bigger, better

the Krafts able to square up to the big retail firms.

value crown!)

In talent terms this never-ending drive for innovation

The growing spending power of the developing world is startling. Today in China the middle class numbers over 300 million people – that is the same figure as the

Torrey Foster

current population of the USA. Meanwhile, assuming

Consumer practice

steady growth over two decades, India is poised to

[email protected]

overtake Germany as the world’s fifth-biggest consumer market by 2025.


will see an exponential increase in the value of R&D expertise. The pipeline must be primed to produce a constant stream of new products that will impress the consumer. Throwing money at innovation isn’t the solution – many large companies have been tripped up by this in the past and have in turn been outsmarted by smaller, more nimble competitors. Outsourcing will become an important pressure valve, as some companies

The developed world cannot match this aggressive

are already finding to their advantage. At Proctor &

consumerism, but the next five years will see a rise in

Gamble, 35% of all its new products have elements that

tempo as key retail giants fight over a population that is

originate from outside the company, up from about 15%

developing ever more precise ideas of what they want to

in 2000. They say this kind of collaboration has seen

spend their money on. The pressures this consumerism

R&D productivity increase by nearly 60%, while R&D

puts on product development, supply chain and price

investment as a percentage of sales has fallen from 4.8%

has resulted in strong retail concentration

in 2000 to 3.4% today.

The case of Proctor & Gamble highlights the fact that

consequence of heightened visa restrictions is that

also introduced a new pilot program through which

survival in the consumer industry will come to rely

the United States registers a low score for mobility of

employees can alert the company of their talents and

not just on investment of resources but also on good

labor and relative openness of its labor market. This

ambitions and, once assessed, managers recommend

management. Their R&D operation is working because

measure records the language skills of the population,

ways for them to pursue their skills, through

it is being well-directed with a clear strategy. This has

the number of international students studying in the

secondments, evening classes, language lessons etc.

important implications for managerial talent in the

country and the number of nationals studying in

This idea of temporary foreign work placements recalls

sector. Those individuals who will perform best in 2012

foreign universities. The USA scores 9th place in 2007,

that key talent trend – to be fully successful in the

and beyond will be those who are able to manage the

and falls to 10th place in 2012, overtaken by India.

world of tomorrow, international experience will

R&D function in a global context. These managers will

This is not the case in Canada, the UK or Germany,

be indispensable.

be skilled at forecasting customer and supplier behavior

which score 1st, 2nd and 3rd place respectively in this

and trends, and they will have an extremely detailed

particular ranking, both today and in 2012. This would

understanding of supply chain vagaries and imperatives.

suggest that, if it is to realize its full educational and

They will also need to be media-savvy. The single biggest challenge in the consumer sector over the next five years will be the increasing difficulty of communicating to consumers and potential employees. An astonishing range of media channels compete for the consumer’s

demographic potential, the US must encourage greater immigration and emigration, helping future American managers gain the international experience which will allow them to compete in (and fully understand) the global consumer market. American companies in the consumer sector have not

ensure their brand message – be it about online stores,

traditionally had a reputation for nurturing their own

green policies or the latest new products, is actually

talent, innovation being the key concern. However,

seen by their customers (before they see what the

there is evidence that the giants in the industry are

competition has on offer).

realizing the value of managing and developing the

ranking of the Global Talent Index indicates that unsurprisingly, over the next five years the US, Canada and Europe will be the predominant suppliers of top quality graduates. What is surprising and perhaps the

US must encourage greater helping future American managers gain the international experience which will allow

talent they have – Wal-Mart for example, has ongoing initiatives to develop its own talent, including a leadership-in-training program and a leader-to-leader project for managers, aiming to push decision-making power down the management ladder. They have

and demographic potential the immigration and emigration,

attention, and the industry’s dilemma will be how to

So where will this talent be found? The educational

“to realize its full educational

them to compete in (and fully understand) the global consumer market”


Professional Services

The professional services sector is

annual growth rates of more than 15%. By contrast the

developing a split personality. On the one

traditional professional services sector, will grow at

Rising temperatures

hand, it is made up of internationally-

around half that rate.

known US and European firms with

Given this, both sides of the sector will need to make

thousands of employees and years of experience, ready to perform almost any

years. Both will depend on similar methods for finding

task for a corporate client. On the other, it

their new hires – vigorous recruiting at the university

incorporates a myriad of young firms, from

level and strong networking skills for identifying

call-centers in Croatia to large, fast-growing

managers from other professions who might be

Indian outfits, all of which are low-cost and,

persuaded to change careers. Both sides of the business

in most cases, highly competitive in terms of basic skills and business processes. Historically, the two sides have co-existed fairly peacefully: increasingly over the next five years, the

Krishnan Rajagopalan

competition will start to heighten. With the outlook

Business & Professional Services practice

for global economic growth slightly less buoyant, the

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traditional professional services industry will find quick wins harder to come by. Clients will increasingly pick and choose services by price and value, as opposed to reputation, depth of experience and international reach. At the same time, the young offshoring companies will continue to migrate into higher-end services, encroaching on more of the core activities of their wellestablished competitors. As a result, offshoring – “hiring” another company’s talent to cut costs – is expected to show compound


the procurement of talent a top priority in the next five

will also need to develop strong internal recruiters who know how to promote the firm and who are adept at building networks of qualified candidates in the communities where their companies operate. The first stop will be universities. Both at home and abroad, the reputation and quality of a country’s universities will be a key measurement for recruiters. The Global Talent Index’s ranking of the quality of universities and business schools – which assesses the number of universities ranked globally among the top five-hundred, the number of business schools ranking in the world’s top one-hundred and the spending per student on higher education as a percentage of GDP per capita – shows a number of important developments in this regard. In 2012, for example, the GTI score shows that the top five countries measured by the quality of their

Think creatively on channels for talent acquisition

universities and business schools will be unchanged

As the developing world continues to pile into the

from 2007 with the US, the UK, Sweden, South Korea

offshoring business, the range of industries “hiring”

and Australia scoring 78, 44, 38, 37, and 36 in 2012

capital will continue to grow over the next five years.

respectively (out of a possible 100 points). However,

Even the most conservative, security-conscious sectors

there will be significant movement below these top-

will be seeking to reduce costs by moving their more

ranked countries, with Germany, France, Russia, Japan

routine businesses to offshore facilities. In the legal

and Poland all moving up two places to 6th, 7th, 11th

profession, for example, more highly skilled work

12th and 16th respectively (out of the ranking of thirty

such as litigation research, traditionally carried out by

countries). Russia’s advance stands in stark contrast to

paralegals in-house, and intellectual property work

the lower quality of its compulsory education, where it

involving patent research, analysis, and drafting

ranks 22nd in the 2012 ranking, down two places from

of patent applications, is expected to move to

20th in 2007. The two measurements underline Russia’s

offshoring facilities.

growing commitment to higher education, with junior and high-school facilities receiving a lower priority. Given the advances of both Germany and France,

universities and business schools. Lower down the ranking, China will hold steady at 21st place with India moving up one level to 25th; these figures are naturally distorted due to the size of the population and the method of assessment, which is spread per capita. While both of these countries will continue to support highquality higher education over the next five years and will have tremendous talent pools, the sheer number

the industry’s own employees. In particular, employee referral programs will become more popular. These generally offer cash rewards and prizes to employees for successfully referred candidates. For KPMG, nearly 39% of the firm’s experienced hires came through employee referrals. For smaller firms the percentage will be less but just as valuable, particularly considering the low cost of acquiring talent in this manner.

Given the continued need for versatile, talented staff for both sides of the professional services sector – offshore and onshore – firms will need to do the following:

Innovate the HR function With talent in short supply, organizations should elevate HR to the highest levels, acknowledging that talent is

Canada and Saudi Arabia will both drop two places to 8th and 9th on the 2012 ranking of the quality of

One of the key resources in the years ahead will be

the only competitive advantage. Leading companies

Think globally regarding talent pools and talent competition

need to customize their HR processes to align with business objectives and create a results-oriented,

They will need to source globally for roles that they

performance culture. Be ready – the global talent war in

have previously looked to fill locally and they will need

professional services is just beginning to heat up.

to keep in mind that the talent competition is leveling out with the traditional competitor and the offshore company looking for exactly the same talent but with a different value proposition.

of their populations pulls down their ranking in the expenditure per student measurement.


Technology

After years of hype, the technological future

of web-based telephony and converged networks,

is almost here. The networked home, the

providing their customers with much more than plain

A future imperative

truly portable office, easy-to-use video

vanilla voice services.

conferencing and collaborative, online

Given these trends, a flexible, collaborative, global

project management all promise to become realities over the next five years. This will

multinationals in the IT and telecoms sectors. In order

have one effect – the search for talent in

to retain top-flight people around the world, companies

the IT and telecoms sectors will intensify as

are already developing techniques for plugging their

corporate and consumer spending outpaces

people into closed system internal corporate recruiting

global economic growth.

networks using the latest technology. For example,

Even the most traditional non-technical companies

system called Professional Marketplace, which provides

will need to upgrade to Web 2.0 online environments

rapid online access to the HR profiles of over 70,000

and the latest hi-tech equipment in order to maintain

employees. These profiles are updated regularly in

productivity and competitiveness. At the same time,

order to reflect work experiences and skills. Using this

Daniel Cheng

consumers will continue to demand the latest electronic

system, managers can quickly identify suitably-skilled

Technology practice

gadgets complete with internet access, such as designer

employees from around the world to meet the needs of

[email protected]

smartphones, portable gaming consoles, and networked

each project. Microsoft uses something similar, called

appliances for the home.

distributed engineering, where engineers around the

In the telecoms sector, sales of the ubiquitous mobile

10

workforce will be a top priority for virtually all


IBM now manages its workforce globally using a

world can collaborate online.

phone will continue to grow, even as world penetration

With the best IT and telecom companies experiencing

levels rise to over 50%. In addition to buoyant sales

turnover rates as high as 15%, retaining talent will

in emerging markets, demand will be sustained by

become an even greater concern in the years ahead.

upgrades to web-enabled handsets, which will be used

As a result, non-compensation based benefits – such

to pay for purchases, to check e-mails, download music,

as childcare and flexible working hours – will rise in

watch TV and make and receive texts and calls. Fixed-

importance. SAS Institute, the world’s largest privately

line telecom companies will need to meet the challenge

held software and related services provider, has a 4%

employee turnover, which it attributes in part to its on-

The ten countries with the greatest proclivity for

site day care center. The company also has around five

attracting talent (assessing the technical skills of the

employees who focus full-time on helping employees

work force, personal disposable income, employment

deal with the needs of their ageing parents.

growth and GDP data) will remain largely unchanged

The Global Talent Index reveals that the tech sector will continue to recruit primarily from the US over the next several years as it retains its dominance in terms of the quality of universities and business schools – the key factor in developing new talent in these fields. The US will be followed by the UK and Sweden in Europe. Saudi Arabia will hold a similar position in the Middle East. The countries to watch in terms of an improving overall quality for nurturing talent are Australia and South Korea, as well as China, which will leap eight places to rank 14th by 2012. A declining country in this category is Russia, which is predicted to sink from 6th place to 11th over the next five years primarily due to the gradual erosion of its education system since the collapse of the Soviet Union in 1991. This trend will not be countered significantly by the rising investment the Russian government is putting into higher education as it will take more than five years for these improvements

over the next five years, with North America and Europe retaining their overall dominance. France will take over the number two spot currently held by Sweden, which will slip to 7th place. This leap can be attributed in part to Nicolas Sarkozy’s new government and his modernising of France’s traditional working practice restrictions. On demographics, China and India rank first and second place respectively. We can predict that these two countries will yield an increasing number of talented graduates in the hi-tech sector given their strong tradition of engineering and science at the university level. This, plus the increased presence of foreign multinationals in China, has helped boost the country up the overall ranking from 8th place in 2007 to 6th place in 2012. India holds firm at 10th overall, aided by its gradual improvement in the quality of its environment to nurture talent, the mobility of its labor and relative openness of its labor market.

“Even the most traditional nontechnical companies will need to upgrade to Web 2.0 online environments and the latest hitech equipment in order to maintain productivity and competitiveness.”

to have a significant effect on the Russian ability to nurture talent.


11

Industrial

Top-flight graduates will be harder to lure

logistics firm DHL has already set up its own

into the industrial manufacturing sector

Logistics Management University, which teaches

The tale of two worlds

over the next five years. Recruiters who

new recruits everything from courier business to

understand this fact will be at an advantage.

supply chain management.

The reasons are simple – the global manufacturing sector will grow at a relatively slow pace over the next few years, led by strength in emerging markets. Global passenger car sales, for example, will rise by an average of only 3.5% per year until 2012 and the increase will be driven by demand in China and India. Sales in the developed world will remain disappointing; with the US market set to stagnate and those in western Europe and Japan expected to grow by a modest 2 to 4%. The energy sector will exhibit similarly low-key

Dale Visokey

growth with global energy demand per head expected

Industry practice

to average 2.4% per year over the next few years.

[email protected]

Slower demand will be the result of high prices and an increased move toward energy conservation in the developed world. There will be a similar story in other major industrial sectors.

in China must contend with a 20 to 30% annual staff turnover rate and recruit 1,000 plus employees annually,” says Indranil Sen, a Vice President for strategic intelligence at DHL. “With two years’ experience in logistics, many employees will job-hop and start work for another firm, the incentive being a 50% pay increase.” In the developed world, manufacturing companies can retain trained staff if they are willing to give international opportunities to their top performers. And this trend will be seen all the way up the management structure. In a recent survey of US and European CEOs by the Economist Intelligence Unit, 60% of respondents said their senior management teams will become more international over the next three years. Opportunities for senior management in the emerging markets look

and energy companies will need to tackle their less

set to grow – Chinese automakers, for example, will be

than sparkling growth profile head on and wring as

keen to hire Western managers over the next five years

much talent as possible out of emerging markets. One

as they begin to expand into foreign markets.

in the fast growing markets. In China, for example, the


quickly as they are trained. “Multinational operations

Given this trend, traditional manufacturing industries

tactic will be the establishment of local training units

12

The downside, however, will be losing staff almost as

“In a recent survey of US and European CEOs by the Economist Intelligence Unit, 60% of respondents said their senior management teams will become more international over the next three years.” In the US and European aerospace and defense

graduates will be increasingly absorbed on their home

success of a business through a commitment to quality

industries, the major talent challenge over the next five

ground by native firms and the US and European

and productivity. Several fast growing developing

years will be a greying workforce. According to the

companies locating new manufacturing facilities in

markets – China in particular – will be an increasingly

Aerospace Industries Association, the average aerospace/

these faster growing emerging economies.

attractive source of these skills. The Global Talent

defense engineer in the US is currently nearly sixty years old. By 2008, approximately 27% of employed engineers will be eligible for retirement, and during the next decade, the number of employees with science and engineering degrees reaching traditional retirement age will triple.

Index’s ‘flow of foreign direct investment’ (FDI)

Given this imbalance, the aerospace and engineering

measurement reveals that some other countries are likely

industries will need to make a big effort to attract

to become more important in this regard. South Africa

and retain new graduates, through the establishment

will rise seven places to rank fifth on the FDI ranking

of programs that support research, pre-graduation internships, and mentoring activities once a new recruit signs on. Retention will be a major problem; in the aerospace industry, the attrition rate in the one to six

science and engineering degrees becoming increasingly

year range will be approximately two times greater than

popular as a means to move up the income ladder.

in the overall new graduate population.

limiting the immigration of foreign professionals, will remain tough. As a result, the growing ranks of Asian

role as a supplier of goods and services to the rest of the African continent as well as overseas. Other countries

In the developing world, the exact opposite is true, with

However, visa restrictions in the US and Europe,

by 2012, a movement that reflects the country’s growing

which will rise up the FDI ranking include Mexico (up five places to 11th) Egypt, Ukraine, and France.

The manufacturing sector also demands blue-collar talent – those steady workers who contribute to the


13

Life Sciences

The life sciences sector, in many ways, is

science, which promise more personalized drugs able

a victim of its own success. The medical

to target niche markets with greater efficacy. This

A healthy future?

and public health advances of the last

should deliver greater pricing power to the industry

several decades have translated into

but may require the sale of larger numbers of lower

healthier people, longer lifespans, reduced

revenue drugs rather than reliance upon the traditional

infant mortality and an expanding global population. It seems demand for healthcare

blockbuster model of selling a few key drugs to large segments of the global population.

services and products can only continue to

Whether due to costs, restructuring, mergers, a

increase globally.

reluctance to hire from outside the industry, the rapid growth of emerging markets or a combination of all

The prevalence of ‘lifestyle’ diseases – such as obesity

five, the pharmaceutical and biotechnology industries

and alcoholism – are already causing increased alarm

have historically failed to invest sufficient resources in

in the developed world, leading to a greater focus on

building their internal teams. The biotech companies

disease prevention and education in those economies.

have tended to rely on a pretty hand-to-mouth existence

Meanwhile concern over infectious diseases, particularly

while the more established firms in pharma have often

Jeff W Dodson

Avian Flu and HIV/AIDS, will facilitate greater

operated as exclusive US/European clubs, increasingly

Life Sciences practice

government cooperation with industry in both the

leaning on staffing organizations to fill their talent

[email protected]

emerging markets and the developed world, increasing

gaps in the short term, rather than applying long-term

the demand for multi-lingual healthcare policy experts

succession planning. As the influence of China and

with a global perspective in both the public and

India continue to rise over the next five years this trend

private sector.

cannot continue; already there is growing evidence of

The global pharmaceutical business will see continued growth, but at a slower rate, as more low-cost generics

14


the gradual move to outsourcing selected functions, an option the industry had previously been slow to accept.

become available, government pricing pressures

When assessing a move to outsourcing, biotech

continue, and truly innovative drugs come to market

companies will need to ensure they are able to access

at a slower pace. This steady growth will be sustained

similar talent pools and resources to those they have

by increasing knowledge about DNA and molecular

in their current locations. Existing biotech clusters

have the competitive advantage of being located close

scientists and researchers, in addition to top-quality

biggest changes ahead for talent trends in the life science

to many highly respected universities – for example

senior general management executives capable of

sector over the next five years. China, which advances

the cluster in Northern California which has twelve

leading and driving change across complex global

two places on the overall Global Talent Index for 2012,

major research universities and laboratories in the

organizations. This will necessitate a global talent

jumps eight places to 14th in this category between

region helping to drive innovation. The proliferation

search; for graduate level personnel this search will

2007 and 2012, its biggest advance among all seven

of collaborative working and knowledge sharing tools

be centered mainly on the top universities. For more

measurements used to make up the GTI. The increase

and technologies should help break down geographic

experienced individuals the hunt will be among the

reflects the Chinese government’s determination to

barriers over the next five years, allowing for an

world’s fast-growing biotech firms and university labs.

improve the quality of life for its population and

increasing level of outsourcing to countries in Asia and Eastern Europe.

develop the life sciences sector into one of its global

As with other high-growth sectors, not just the recruitment but the retention of talent will be a major

competencies.

In cases where medicines need to be developed for

headache for the life sciences sector over the next

Another strong performer in this category is South

large regional markets, it will make sense for companies

five years. To address this problem, pharmaceutical

Korea, which advances four places to 10th place in the

to locate their facilities closer to the population in

companies will need to start looking at recruiting

rank in its ability to nurture talent. Unsurprisingly, the

question, where the demand is higher and where these

outside of their traditional hiring range. For example,

US ranks top in this category, given its long history

companies can access the local skilled talent pool.

companies will need to be more involved at high

of innovation in the sector, followed closely by the

Multinationals in this sector will invest in global regions

school and college level to generate interest and educate

Netherlands, Canada, Japan and Australia.

where there is a high supply of technical and scientific

students on the skills needed for the industry. In

professionals, such as China, India and Brazil, which

addition, these companies will need to begin targeting

rank 1st, 2nd and 5th, respectively, in the demographics

the 60+ market, which is looking increasingly likely to

category of the Global Talent Index both in 2007 and

seek supplemental income after retirement age and may

2012. To build the scale of talent needed in markets

continue to work in the field through reduced work

like China and India to better serve large local markets,

programs.

pharmaceutical multinationals will need to play an

Developing an awareness of these emerging trends and making the recruitment, development and retention of top talent a strategic imperative is critically important for every life sciences company competing in the global market. Equally important is the establishment of strong partnerships with world class agencies

The Global Talent Index’s measurement of the quality

capable of recruiting the best talent in key functions

of the environment to nurture talent – which puts

in all established and emerging regions. The most

a strong weighting on the percentage of university

proactive industry players have already made significant

Globally, the life sciences sector will need to keep

students in the sciences, numbers of R&D researchers

investments in talent, and these are the companies that

working hard to attract the most skilled and committed

and meritocratic remuneration – reflects one of the

are best positioned for the future.

active role in recruiting and developing people at junior, middle and senior levels in their organizations.


15

Financial Services

Young graduates often look to the financial

challenges, the industry will still offer big rewards for

services sector as a path to big salaries and

those who can thrive in a risky environment and the

Accounting for talent

bonuses, but in the future a number of

need for high-quality talent in the financial services

risks will balance the opportunities faced

sector will be undiminished. “If there’s one limiting

by the sector. Slower global economic

factor to growth, it is people and talent,” says Tejpreet

growth and rising interest rates, especially in the countries of the European Union and

Chopra, the president and CEO for GE’s Commercial Finance business in Europe.

Japan, will lead to a rise in corporate loan

One of the key areas of scarcity will be the fast-growing

defaults in many countries. A slowdown

markets of India and China. Despite the vast numbers

in the property market in developed

of graduates entering the workforce every year in both

economies will put pressure on the banks that favour lending to this sector.

of these countries, a relatively low proportion of them have the skills required by global financial services firms. As a result, these few will be highly sought-after and

To combat this, many banks have diversified their

those firms which hope to hire them will need to offer

businesses, strengthened their reserves and improved

top-flight compensation and opportunities.The financial

Valerie Germain

the quality of loan recipients. Risk-transfer techniques

services companies will increasingly hope to boost their

Financial Services practice

have become more widespread and sophisticated. Fee-

knowledge of emerging markets by recruiting talent

[email protected]

based income will grow as companies increasingly move

in India and China for their offices in London, New

away from debt financing, towards raising money on

York, Hong Kong and Singapore. Crucially, they will be

the capital markets and paying banks to act as

offering these graduates exactly the same compensation

their advisors.

packages as graduates coming out of Harvard or any of

Merger and acquisition activity, led in part by private

the other globally renowned business schools.

equity funds, will continue but not at such heady

Another major hiring challenge for the financial services

levels as in the past. The sharp rise in debt associated

sector – not known for its hip image – will be its

with leveraged buyouts (LBOs) by private equity firms

need to appeal to graduates who have grown up with

will also be a source of risk to lenders. Given these

the internet. Banks and insurers who fail to properly understand the web-based culture run the risk of

16


running up against a brick wall of distrust and cynicism,

trends in financial services. In terms of its proclivity to

the talent pool created by its huge population, will

which could damage their brand and cause them to lose

attracting talent – a vital measurement for the sector

jump four places from 17th to 13th place in its ability to

their competitive advantage.

which assesses technical skills of the workforce, personal

attract talent in 2012. This is the country’s biggest single

disposable income, employment growth and GDP data

improvement among all seven indices used to create

– France leaps three places over the next five years to

the overall index and reflects the country’s continued

rank second behind the US by 2012. This will largely be

emphasis on technical training at the secondary and

the result of the new government’s more flexible view

tertiary levels of education as well as the country’s

toward working practices and compensation. Canada,

rapidly-expanding middle-class.

‘Generation Y’, those born between 1977 and 2005, have grown up with computers, show no fear of technology, take risks and are media-savvy and brand conscious. They are an online generation, whose new social spheres are social networking sites such as MySpace and FaceBook. Within a few years, job podcasts by even the most conservative of employers will become a reality. According to the Global Talent Index, the next five years will produce a few surprises in terms of talent

Germany, Australia and the UK follow in 3rd, 4th, 5th and 6th place respectively in this category.

Japan will also gain competitive advantage, jumping from 14th to 11th place over the next five years as

Intriguingly, India, which earns its overall Global

its financial services institutions begin to realize the

Talent Index 10th place ranking primarily because of

importance of attracting global talent.

“Generation Y, those born between 1977 and 2005, have grown up with computers, show no fear of technology, take risks and are media-savvy and brand conscious. They are an online generation, whose new social spheres are social networking sites such as MySpace and FaceBook. Within a few years, job podcasts by even the most conservative of employers will become a reality.” Global Talent Index, developed in co-operation with the Economist Intelligence Unit

17

Greenland Sea

Greenland

Kara Sea

Appendices

Mongolia

Barents Sea

Arcti

c Cir

cle

Norwegian Sea

Russia

Iceland

Sweden

Chin

Finland

Norway

Appendix A Methodology, 19

Appendix D Overall GTI ranking, 23 Appendix F

Lithuania

Czech Rep. Switz.

Islands Appendix G Azores Quality of universities and business schools, 26

Portugal Mobility and relative openness of the labor market, 28

Appendix J

Stock and flow of foreign direct investment, 29

Spain

Uzbekistan

Slovenia

Italy

Slovakia

Albania

Caspian Sea

Mold.


Romania

Black Sea

Georgia

Turkmenistan Afghanistan

Azerbaijan

Pakistan

Bulgaria

Mac.

Turkey

Iran

Greece

Appendix K Proclivity to attracting talent, 30

er

Cyprus Lebanon

Morocco

Canary Islands

Tunisia

N

Ukraine

Austria Hungary

Appendix H Quality of the environment to nurture talent, 27 Appendix I

Tajikistan

Poland

Germany

Bel.

France

Kyrgyzstan

Aral Sea Belarus

Demographics, 24 Quality of compulsory education, 25

Kazakhstan

Latvia

Neth.

Appendix C Global Talent Index weighting, 22

NTI

Baltic Sea

Denmark

Appendix B Global Talent Index maps, 20 Ireland

CAppendix E

Estonia

North Sea

United Kingdom

Mediterranean Sea

Israel

Syria

Iraq Kuwait

Arabian Sea Qatar

Jordan

U. A. E. Oman

Western Sahara Algeria

Egypt

Saudi Arabia

d

Re Se

Libya

a

e Verde Islands Mauritania Gambia

Yemen

Senegal

Mali Niger Guinea Burkina Faso

Eq

18

Sierra Leone uHeidrick and Insights ato & Struggles Mapping Global Talent: Essays Cote r Liberia

D'Ivoire

Ghana

Somalia

Sudan Chad Ethiopia

Benin Nigeria

t

ua

Eq

Eritrea

Guinea Bissau

INDIA OCEA

Appendix A

The Global Talent Index is the result of a

Applying their respective areas of expertise in talent

collaboration between Heidrick & Struggles

assessment and data gathering, the project team from

Methodology

and the Economist Intelligence Unit; the

both organizations drew up a list of variables with

vision of the former was matched by the

which to measure the seven areas of interest. These

research expertise of the latter. The Index

variables combine quantitative measures drawn from a variety of local and international data sources,

measures not only a country’s natural

with qualitative assessments from the Economist

potential for producing talent in sociodemographic terms, but also the conditions necessary to realize this potential. A country may exhibit heady population growth but

Intelligence Unit’s network of country analysts and local contributors. Forecasts were based on the Economist Intelligence Unit’s macroeconomic model and country analysts’ projections for qualitative variables. Some

without a supporting infrastructure and the

variables, particularly for education, had to be assumed

right cultural contexts, the talent margin

to remain equal in five years, owing to the lack of

will not be able to fully develop.

time on which to base projections. The data was then normalized in order to obtain scores from 1 to 100

To reflect this multi-layered analysis seven major

(where higher scores meant better performances on the

areas were determined to be of importance:

talent measures).

• demographics • quality of compulsory education systems

Finally, the project team set the weights of the different

• quality of universities and business schools

variables in the overall Index by assigning scores from

• quality of the environment to nurture talent

1 to 5 for each variable (where 1 = less important and

• mobility and relative openness of the labour market

5 = of critical importance).

• trends in foreign direct investment • proclivity to attracting talent


19

Appendix B

ARCTIC OCEAN

Russia B e a ufo r t Sea

Baffin Bay

Greenland

Nor wegian Sea ircle tic C Arc

Norway

Iceland

Global Talent Index maps

United Kingdom

Gulf of Alas k a Canada

France

Spain Portugal

the world at 2012

The map uses color to represent thirty countries’ overall talent

Ireland

Hudson Bay

Azores Islands Morocco United States Algeria

AT L A N T I C

Canary Islands

Western Sahara

Trop ic o

f Can

PA C I F I C

Mali

cer

ncer

Ca Tropic of

The Bahamas

Gulf of Mexico

Mauritania

Mexico

ranking at 2012, indicating at a glance how countries score at

Senegal Cuba Belize

nurturing talent, from red-hot beds to blue cooler climates.

Jamaica Honduras

Cape Verde Islands

Dominican Republic Puerto Rico

Gambia Guinea Bissau Guinea

Haiti

Sierra Leone

Ca r i b b e a n S e a


Liberia


Venezuela

Equ ator

Guyana Suriname

French Guiana

r Equato

Colombia

Global Talent Index scores in 2012 – numbers represent how countries score at nurturing talent

Ivory Coast

Panama

OCEAN OCEAN

Ecuador

Brazil Peru

Tropic

Bolivia

of Capr icorn

Tropic

n pricor

of Ca

Paraguay

Chile

Argentina

Uruguay

Antarctic Circle

the top 30 in 2012 20


2012 country rank

1

United States

2

rank GTI change 2012

GTI 2007

0

53

52

United Kingdom

+2

48

46

3

Canada

-1

47

47

4

Netherlands

-1

46

46

5

Sweden

0

45

45

6

China

+2

44

42

Russia

Chukchi Sea

Beaufort Sea

Sea of Okhotsk

Sea of Okhotsk

Mongolia

Sea of Japan

North Korea South Korea Canada

ARCTIC OCEAN

Hudson Bay

Japan

Yellow Sea

Leptev Sea

China

Baffin Bay

East China Sea

Tropic of Cancer

Bhutan

Nepal

Greenland Sea

Greenland

Bangladesh

Kara Sea

Burma India

United States Mongolia

Barents Sea Arcti

c Cir

cle

Norwegian Sea

Russia

Bay of Bengal

South China Sea

Laos

Thailand

PACIFIC

Philippines

Vietnam

Cambodia

Iceland Sweden

Brunei

China Finland

Malaysia

Sri Lanka

Malaysia

Norway

Ireland

Lithuania

Belarus

Czech Rep.

Italy

Portugal Spain

Slovakia

Albania

Romania

Georgia

Black Sea

Afghanistan

Azerbaijan

Pakistan

India

Bulgaria

Mac.

n

d

o

n

e

s

i

Papua New Guinea

a

Solomon Islands

Nepal

INDIAN

Turkey

Bay of Bengal Vanuatu

Iran

Fiji

of Syria

Ca er nc

Suriname

Cyprus Lebanon

Morocco

Canary Islands

Tunisia

French Guyana

Mediterranean Sea

New Caledonia

Iraq Kuwait

Israel

U. A. E. Oman

d a

Mauritania

Yemen

Senegal

Mali Niger

Brazil

Cote D'Ivoire

Ethiopia

Benin Nigeria

Ghana

Central African Republic

Togo

OCEAN

New Zealand

Chad

Burkina Faso

Liberia

corn

Tasman Sea

Somalia

Sudan

Guinea Sierra Leone

OCEAN

r

to

ua

Eq

Eritrea

Guinea Bissau

Capri


INDIAN OCEAN

Se

Cape Verde Islands

tor

Trop

ic of

Saudi Arabia

Re

Egypt

Libya

ua

Australia

Madagascar Algeria

Eq

Trop

Qatar

Jordan

rn

prico ic of Ca

Sri Lanka

Arabian Sea

Western Sahara

Gambia

OCEAN

East Timor

Turkmenistan

Greece

ic

Guyana

Caspian Sea

Mold.


op

Tr

Venezuela

Slovenia

I

Uzbekistan Ukraine

Austria Hungary

Switz.

France

Azores Islands

Myanmar

Tajikistan

Poland

Germany

Bel.

ATLANTIC

Kyrgyzstan

Aral Sea

Neth. Puerto Rico

Kazakhstan

Latvia

Baltic Sea

Denmark

Equator

Sing.

Estonia

North Sea

United Kingdom

Cameroon

Uganda

Kenya

Equatorial Guinea Sao Tome & Principe Gabon

Congo

Rwanda

Dem. Rep. Of Congo

Burundi

Tanzania

Madagascar

Antarctic

Mozambique Angola

Tropic of

Zimbabwe

Capricorn

Circle

Zambia

Ross Sea

Antarctica

Botswana

Namibia

South Africa

2012 country rank


GTI 2007

2012 country rank


GTI 2007

2012 country rank


GTI 2007

2012 rank

country


GTI 2007

7

Germany

-1

44

43

13

South Korea

+2

37

34

19

Mexico

+2

33

31

25

Brazil

-2

29

30

8

Australia

-1

43

43

14

Japan

+2

36

34

20

Greece

0

32

32

26

Turkey

0

29

27

9

France

0

43

41

15

Poland

-2

35

35

21

Argentina

-4

32

34

27

Saudi Arabia

+1

26

23

10

India

0

41

39

16

Italy

-2

34

34

22

Thailand

0

30

31

28

Nigeria

-1

23

25

11

Spain

0

37

37

17

Ukraine

+2

34

33

23

South Africa

+1

30

29

29

Indonesia

0

22

23

12

Malaysia

0

37

37

18

Russia

0

34

33

24

Egypt

+1

29

29

30

Iran

0

21

21


21

Appendix C

indicator

weight: 1 to 5

Demographics

Global Talent Index weighting

5

CAGR Population aged 20-59 (%)

0

nnnnn

Quality of compulsory education sectors

weight: 1 to 5

R&D as % of GDP

5

nnnnn

Cost of living

3

nnn

Degree of restrictiveness of labor laws

4

nnnn

Wage regulation

1

n

Duration of compulsory education

4

nnnn

Quality of workforce

4

nnnn

Starting age of compulsory education

1

n

Local managers

4

nnnn

Current education spending (% of GDP)

2

nn

Protection of intellectual property rights

1

n

Current education spending per pupil as a % of GDP per capita

4

nnnn

Protection of private property

3

nnn

Primary school enrollment ratio (%)

2

Meritocratic remuneration

4

nnnn

nn

Secondary school enrollment ratio (%)

4

nnnn

a country’s potential for producing talent. These are

Mean years of schooling

4

nnnn

listed here in the tables on the right. As the final step

Adult literacy rate (% of pop over 15)

5

in the data analysis, the project team from Heidrick &

Pupil/Teacher ratio, primary

Seven major areas were determined to be of importance in researching and analysing the factors that determine

Struggles and The Economist Intelligence Unit applied their judgement to set the weights of the different

Mobility and relative openness of the labor market Number of students studying overseas

2

nn

4

nnnn

nnnnn

Number of overseas students studying in country as a % of tertiary enrollment

2

nn

Language skills of the labor force

5

nnnnn

Pupil/Teacher ratio, lower secondary

2

nn

Hiring of foreign nationals

4

nnnn

Pupil/Teacher ratio, upper secondary

2

nn

Openness of trade (exports + imports % of GDP)

3

nnn

Quality of universities and business schools

Stock and flow of foreign direct investment

variables in the overall ranking by assigning scores from

Gross enrollment ratio ISCED 5 & 6 Total

4

nnnn

1 to 5 for each variable (where 1 = unimportant and 5

Number of business schools ranked in world’s top 100

2

nn

Average flow of FDI in previous five years (% of GDP)

0

3

nnn

Average stock of FDI in previous five years (% of GDP)

2

nn

quality of compulsory education, the starting age of a

Number of universities ranked in world’s top 500

country’s compulsory education was judged to be much

Expenditure per student for higher education (as % of GDP per capita)

3

nnn

Technical skills of the workforce

4

nnnn

less significant than its adult literacy rate which were

Quality of the environment to nurture talent

nnnn

Share of the population aged 25-64 with tertiary level education

3

nnn

Personal disposable income per capita (US$ bn)

4

weighted 1 and 5 respectively. This process ensures that

Employment growth

3

nnn

Percentage of higher education graduates in the Social Sciences, Business and Law

2

nn

GDP per capita

0

Percentage of tertiary graduates in the Sciences

4

nnnn

GDP per capita (PPP)

4

nnnn

Nominal USD GDP

3

nnn

Researchers in R&D (per m pop)

4

nnnn

PPP GDP

3

nnn

Technicians in R&D (per m pop)

1

n

Real GDP growth (%)

3

nnn

= critical importance). For example, in assessing the

the final scores include a degree of insight from the project team based on its specialist knowledge of the subject.

22

Population aged 20-59

indicator


Proclivity to attracting talent

Appendix D

Overall GTI rankings

2007

2012

rank

country

GTI score

rank

country

GTI score

1

US

52

1

US

53

2

Canada

47

2

UK

48

3

Netherlands

46

3

Canada

47

4

UK

46

4

Netherlands

46

5

Sweden

45

5

Sweden

45

6

Germany

43

6

China

44

7

Australia

43

7

Germany

44

of the thirty countries achieved in the study in 2007 and

8

China

42

8

Australia

43

the projection forward five years to 2012. The arrows

9

France

41

9

France

43

10

India

39

10

India

41

11

Spain

37

11

Spain

37

The two tables on the right show the ranking that each

between the columns show movement in rank over the five-year period. Red arrows show warming talent, blue

12

Malaysia

37

12

Malaysia

37

shows where talent is cooling and green indicates where

13

Poland

35

13

South Korea

37

no change has occurred.

14

Italy

34

14

Japan

36

15

South Korea

34

15

Poland

35

16

Japan

34

16

Italy

34

17

Argentina

34

17

Ukraine

34

18

Russia

33

18

Russia

34

19

Ukraine

33

19

Mexico

33

20

Greece

32

20

Greece

32

21

Mexico

31

21

Argentina

32

22

Thailand

31

22

Thailand

30

23

Brazil

30

23

South Africa

30

24

South Africa

29

24

Egypt

29

25

Egypt

29

25

Brazil

29

26

Turkey

27

26

Turkey

29

27

Nigeria

25

27

Saudi Arabia

26

28

Saudi Arabia

23

28

Nigeria

23

29

Indonesia

23

29

Indonesia

22

30

Iran

21

30

Iran

21


23

Appendix E

Demographics In assessing the demographic factors that affect talent, the team analysed how many people of working age, 20-59 years old, there were in each of the thirty countries.

24


2007

2012

rank

country

score

rank

country

score

1

China

100

1

China

100

2

India

73

2

India

76

3

US

21

3

US

20

4

Indonesia

17

4

Indonesia

17

5

Brazil

13

5

Brazil

14

6

Russia

10

6

Russia

10

7

Japan

8

7

Nigeria

8

8

Nigeria

7

8

Japan

7

9

Mexico

7

9

Mexico

7

10

Germany

5

10

Germany

5

11

Turkey

5

11

Turkey

5

12

Iran

5

12

Iran

5

13

Egypt

4

13

Egypt

5

14

Thailand

4

14

Thailand

4

15

UK

4

15

UK

4

16

France

4

16

France

3

17

Italy

4

17

Italy

3

18

South Korea

3

18

South Korea

3

19

Ukraine

3

19

Ukraine

3

20

Spain

3

20

Spain

3

21

Poland

2

21

Poland

2

22

South Africa

2

22

Argentina

2

23

Argentina

2

23

South Africa

2

24

Canada

2

24

Canada

2

25

Malaysia

1

25

Malaysia

1

26

Saudi Arabia

1

26

Saudi Arabia

1

27

Australia

1

27

Australia

1

28

Netherlands

1

28

Netherlands

1

29

Greece

0

29

Greece

0

30

Sweden

0

30

Sweden

0

Appendix F

Quality of compulsory education In assessing the quality of compulsory education,

2007

2012

rank

country

score

rank

country

score

1

UK

74

1

UK

75

2

Canada

73

2

France

72

3

Germany

72

3

Netherlands

71

4

Sweden

71

4

Canada

71

5

France

70

5

Germany

71

6

Netherlands

70

6

US

70

7

Australia

70

7

Sweden

69

8

US

70

8

Australia

68

9

Spain

66

9

Japan

66

the team looked at eleven variables which impact the

10

Japan

66

10

South Korea

66

effectiveness of schooling as follows:

11

South Korea

66

11

Spain

66

12

Italy

64

12

Ukraine

65

• duration of compulsory education

13

Poland

64

13

Italy

64

• starting age of compulsory education

14

Ukraine

63

14

Poland

63

15

Argentina

62

15

Argentina

60

16

South Africa

59

16

Mexico

58

17

Malaysia

59

17

Thailand

58

18

Mexico

58

18

South Africa

57

• primary school enrolment ratio (%)

19

Thailand

57

19

Greece

57

• secondary school enrolment ratio (%)

20

Russia

56

20

Malaysia

57

21

Greece

55

21

Turkey

54

22

Turkey

51

22

Russia

53

23

Brazil

50

23

Brazil

48

• pupil/teacher ratio, primary

24

India

44

24

China

46

• pupil/teacher ratio, lower secondary

25

Iran

42

25

India

42

26

China

41

26

Iran

40

27

Egypt

39

27

Egypt

39

28

Indonesia

37

28

Indonesia

38

29

Nigeria

35

29

Saudi Arabia

35

30

Saudi Arabia

33

30

Nigeria

30

• current education spending (% of GDP) • current education spending per pupil as a % of GDP per capita

• mean years of schooling • adult literacy rate (% of pop over 15)

• pupil/teacher ratio, upper secondary


25

Appendix G

Quality of universities and business schools The following variables were used as a measure of

2012

rank

country

score

rank

country

score

1

US

76

1

US

78

2

UK

43

2

UK

44

3

Sweden

37

3

Sweden

38

4

South Korea

35

4

South Korea

37

5

Australia

35

5

Australia

36

6

Canada

33

6

Germany

34

7

Saudi Arabia

33

7

France

34

8

Germany

32

8

Canada

33

9

France

32

9

Saudi Arabia

33

both the reputation and resources of the business

10

Netherlands

30

10

Greece

30

schools and universities in each country as well as

11

Greece

30

11

Russia

30

their enrolment records:

12

Spain

29

12

Japan

30

13

Russia

28

13

Spain

30

• gross enrollment ratio ISCED 5 & 6 total

14

Japan

28

14

Egypt

28

15

Egypt

28

15

Ukraine

27

16

Ukraine

26

16

Poland

27

• number of business schools ranked in world’s top 100

17

Italy

26

17

Italy

27

• number of universities ranked in world’s top 500

18

Poland

25

18

Netherlands

25

• expenditure per student for higher education

19

Malaysia

22

19

Malaysia

23

20

Argentina

21

20

Argentina

22

21

China

19

21

China

20

22

Thailand

16

22

Thailand

17

23

Turkey

14

23

Mexico

15

24

Mexico

12

24

Turkey

15

25

Brazil

12

25

India

12

26

India

11

26

Brazil

10

27

South Africa

9

27

South Africa

10

28

Iran

8

28

Iran

9

29

Nigeria

6

29

Nigeria

7

30

Indonesia

5

30

Indonesia

6

(as % of GDP per capita)

26

2007


Appendix H

Quality of the environment to nurture talent Assessing the quality of the environment involved analysis of the following factors: • share of the population aged 25-84 with higher education • percentage of higher education graduates in the Social Sciences, Business and Law • percentage of tertiary graduates in the Sciences

2007

2012

rank

country

score

rank

country

score

1

US

64

1

US

64

2

Netherlands

60

2

Netherlands

60

3

Canada

57

3

Canada

58

4

Japan

56

4

Japan

56

5

Sweden

53

5

Australia

55

6

Russia

52

6

Sweden

53

7

Australia

52

7

Germany

53

8

Germany

52

8

UK

53

9

France

49

9

France

52

10

UK

49

10

South Korea

51

11

India

48

11

Russia

50

12

Spain

48

12

Spain

49

13

Ukraine

47

13

India

48

14

South Korea

46

14

China

47

15

Malaysia

45

15

Mexico

46

16

Argentina

44

16

Malaysia

43

17

Mexico

44

17

Ukraine

43

• researchers in R&D (per m pop)

18

Brazil

43

18

Poland

43

• technicians in R&D (per m pop)

19

Italy

43

19

Brazil

41

• R&D as % of GDP

20

Poland

41

20

Greece

41

21

Thailand

41

21

Italy

41

22

China

41

22

South Africa

39

23

Greece

41

23

Argentina

39

• wage regulation

24

South Africa

39

24

Thailand

39

• quality of work force

25

Iran

38

25

Iran

36

26

Nigeria

35

26

Egypt

35

27

Egypt

35

27

Turkey

34

• cost of living • degree of restrictiveness of labor laws

• local managers • protection of intellectual property rights

28

Indonesia

35

28

Indonesia

32

• protection of private property

29

Turkey

33

29

Saudi Arabia

32

• meritocratic remuneration

30

Saudi Arabia

28

30

Nigeria

29


27

Appendix I

Mobility and relative openness of the labor market

2012

rank

country

score

rank

country

score

1

Canada

73

1

Canada

74

2

UK

62

2

UK

64

3

Germany

59

3

Germany

61

4

Netherlands

58

4

Netherlands

60

5

Australia

58

5

Australia

59

6

Sweden

54

6

Sweden

57

7

Malaysia

52

7

Malaysia

56

8

France

51

8

France

53

9

US

49

9

India

53

10

India

47

10

US

51

The variables used to measure the mobility and relative

11

China

46

11

China

48

openness of the labor market focus not only on the

12

South Africa

43

12

South Africa

46

13

Thailand

41

13

Poland

43

14

Greece

41

14

Greece

42

number of people studying outside of their home country and their language skills, but also on a country’s

15

Poland

41

15

Ukraine

42

tendency to hire foreign nationals to add diversity to its

16

Nigeria

40

16

Mexico

41

workforce. These characteristics along with openness to

17

Turkey

40

17

Italy

41

18

Italy

39

18

Turkey

40

19

Spain

38

19

South Korea

40

20

Argentina

38

20

Spain

40

21

Mexico

38

21

Russia

40

22

Ukraine

38

22

Argentina

39

23

Brazil

37

23

Brazil

39

24

Egypt

36

24

Egypt

39

25

Russia

34

25

Nigeria

37

26

South Korea

34

26

Thailand

36

27

Indonesia

30

27

Japan

35

28

Japan

30

28

Saudi Arabia

32

29

Saudi Arabia

27

29

Indonesia

29

30

Iran

20

30

Iran

20

other cultures are crucial to creating and maintaining talent flow: • number of students studying overseas • number of overseas students studying in country as a % of enrollment in higher education • language skills of the labor force • hiring of foreign nationals • openness of trade (exports + imports % of GDP)

28

2007


Appendix J

Stock and flow of foreign direct investment To determine the scores for this pillar of the research,

2007

2012

rank

country

score

rank

country

GTI score

1

Netherlands

100

1

Netherlands

100

2

Malaysia

73

2

Sweden

71

3

Sweden

69

3

UK

56

4

UK

50

4

Malaysia

53

5

Nigeria

47

5

South Africa

47

6

Spain

45

6

Canada

45

7

Argentina

42

7

Egypt

42

8

Australia

42

8

France

41

9

Canada

41

9

Australia

40

the project team looked at the average stock and at the

10

Thailand

40

10

Spain

38

average flow of foreign direct investment (FDI) for

11

Egypt

39

11

Mexico

37

each country in the previous five years as a percentage

12

South Africa

39

12

Poland

37

13

Poland

38

13

Thailand

31

14

France

36

14

Nigeria

30

15

China

36

15

Argentina

30

16

Mexico

35

16

Ukraine

28

17

Germany

30

17

Germany

28

18

Brazil

29

18

Brazil

26

19

Ukraine

23

19

China

25

20

US

15

20

Turkey

22

21

Italy

14

21

US

18

22

Turkey

13

22

Italy

16

23

Saudi Arabia

12

23

Russia

13

24

South Korea

12

24

Indonesia

9

25

Greece

10

25

South Korea

9

26

Russia

10

26

India

9

27

India

7

27

Greece

8

28

Indonesia

5

28

Saudi Arabia

8

29

Iran

0

29

Japan

0

30

Japan

0

30

Iran

0

of GDP. However, it only used the figures for each country’s average stock of FDI when calculating this index.


29

Appendix K

Proclivity to attracting talent

2012

rank

country

score

rank

country

score

1

US

39

1

US

41

2

Sweden

37

2

France

35

3

Canada

36

3

Canada

35

4

Germany

35

4

Germany

34

5

France

35

5

Australia

33

6

Australia

34

6

UK

33

7

UK

33

7

Sweden

32

its cultural nuance, is a country’s proclivity to attract

8

Spain

31

8

Spain

31

talent. In other words, why would anyone want to work

9

Netherlands

31

9

Italy

30

10

Italy

30

10

Netherlands

29

11

Poland

29

11

Japan

28

12

Greece

26

12

Malaysia

27

13

Argentina

25

13

India

27

14

Japan

25

14

South Korea

27

Perhaps the most difficult area to define because of

there? In assessing this final pillar of the research, the project team looked at the following variables: • technical skills of the workforce • personal disposable income per capita (US$ bn)

15

South Korea

23

15

Greece

26

• employment growth

16

Malaysia

23

16

Poland

24

• GDP per capita (PPP)

17

India

23

17

Argentina

24

18

Egypt

23

18

Mexico

24

• nominal USD GDP

30

2007

• PPP GDP

19

Russia

20

19

Russia

23

20

Mexico

20

20

Saudi Arabia

22

• real GDP growth (%)

21

Brazil

19

21

Turkey

22

22

Iran

19

22

Egypt

22

23

Saudi Arabia

19

23

Ukraine

21

24

Turkey

17

24

Brazil

20

25

Nigeria

16

25

Thailand

18

26

China

16

26

China

18

27

Ukraine

15

27

Iran

17

28

Indonesia

15

28

Nigeria

17

29

Thailand

14

29

Indonesia

14

30

South Africa

11

30

South Africa

11


Further reading available on www.heidrick.com ‘The Leadership Team: Complementary Strengths or Conflicting Agendas’, Stephen A Miles and Michael D Watkins, Harvard Business Review, April 2007 ‘Roller Coaster Leadership’, Kevin Kelly, Business Strategy Review, Spring 2007 Getting Results in China: How China’s Tech Executives are Molding a New Generation of Leaders, (A joint research project between Heidrick & Struggles and The Stanford Project on Regions of Innovation and Entrepreneurship) Route to the Top, Dr Elisabeth Marx, Heidrick & Struggles, 2006 Executive Leadership in China, (A joint study between Heidrick & Struggles and the Economist Intelligence Unit) Benchmarking Corporate Governance in China, (A joint research project carried out by Heidrick & Struggles and the School of Management, Fudan University)


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