Top Talent Markets revealed in Contingent Workforce Index

For the second year in a row, New Zealand demonstrates an optimal environment for use of contingent labour: availability, cost efficiency, regulation, and productivity, according to ManpowerGroup Solutions’ annual Contingent Workforce Index (CWI). Singapore, the Philippines, Israel, and India moved to the top of the leaderboard in 2016. The top five markets for 2016 do not include any countries from the Americas, as workforce volumes for countries in the other regions elevated them to the top based on more favorable availability scores. The United States and Canada dropped to sixth and seventh in 2016 from second and third in 2015, respectively.


India has risen from 24th to fifth, as its large labour force ranks it first for availability with the weighting adjustment in this category for 2016. Israel is now fourth globally due to its increased ranking in the regulation category—it is now easier to do business in the area. Moving into the top five globally this year, Singapore ranked third in the regulation category and it’s high productivity, along with availability, creates a favourable contingent workforce environment in this market. Israel ranks fourth, up one spot from 2015, despite the increase in the weighting of notice periods and severance regulatory metrics, and increases in wages when compared to other countries. The U.S. moves from second in 2015 to sixth this year, based largely on higher costs compared to other countries.

Regional Rankings

APAC	Americas	EMEA
New Zealand	United States	Israel
Singapore	Canada	Ireland
Philippines	Mexico	UK
India	Brazil	South Africa
Hong Kong	Colombia	Turkey

 

The 2016 CWI puts the APAC region back on the map. In 2015, the CWI reduced the emphasis on population size in exchange for education levels, English proficiency, and the potential of the future workforce. However, this year the emphasis was on global employer preferences and priorities which lie with the availability of skilled workers and workforce size.

Across the Americas there has been change with both the U.S. and Canada falling out of the top five global countries. For Canada, this is easily explained by workforce size. Whereas in the U.S., the shift is attributed to regulatory changes, specifically overtime, notice period, and severance pay.

Israel maintains its top ranking in the EMEA region in 2016, moving up from fourth in 2014. In 2016 the new workforce size rankings keep a EMEA countries out of the top five. Both South Africa and Turkey advance to the top five nations for 2016, with high marks in productivity.

CWI’s Changes The emphasis on the size of a country’s contingent workforce remains consistent year-over-year, as do the weightings of English proficiency and tertiary education in the workforce. Based on input from industry-leading clients around the globe, weighting of the volume of skilled workers within a market has increased significantly from 2015 to 2016. The definition of availability was also modified to meet current industry definitions.

These adjustments resulted in higher rankings for countries with large populations but with poor English proficiency and low volumes of skilled labour, such as China and India, compared to 2015 rankings in the same category. It also meant slightly lower rankings for markets such as Israel and Ireland, which have stronger language skills and advanced educations among their emerging workforce but smaller labour forces.

Key factors to this year’s CWI ranking include: Availability: Based on industry trends over the past year, a shift in priorities resulted in a change in the 2016 weighting. This year larger workforces and the availability of contingent workers, as well as skilled labour, were given more influence. Where the size of the workforce and English proficiency used to be the most heavily weighted variable in the CWI, the 2016 rankings put a greater emphasis on the quality of the workforce.

Cost efficiency: The relative cost of contingent labour continues to rely heavily on the varying wage levels in each country; however, based on input from global employers, this year the CWI takes the cost of benefits and taxes into greater consideration. Consequently, countries with the lowest wage thresholds continue to rank highest for cost efficiency, the leader board does, however, now reflect those markets that have the lowest total cost of labour, inclusive of other operating costs that impact employment. Additionally, in 2016 the definition of overtime was adjusted to reflect the typical meaning of the word as opposed to simply working on a rest day.

Regulations: The CWI analyses the extent to which the legal and regulatory climates in each country impact the cost and process of hiring local workers. Pay parity, contract duration limits, notice periods, and severance requirements restrict the use and increase the cost of contingent labour more than any other regulations. Countries with the highest rankings in this category offer the most regulatory workforce flexibility for contingent labour.

Productivity: Productivity accounts for the employer’s ability to leverage a worker within each country over the length of a contract. The CWI includes worker productivity output as well as number of hours in a workday, days in a workweek, permitted overtime, and paid time off. Countries that restrict the hours in a workday or workweek and limit overtime have the most constrained productivity measures.

 —Raleen Gagnon, global director of market intelligence at ManpowerGroup Solutions.