Singapore, 8th April 2014 – New research by professional services network PwC, commissioned by LinkedIn, the world’s largest online professional network, today reveals that poor talent adaptability – the inability for people to retrain for new skills or switch industries – is costing Singapore S$280 million in lost productivity and leads to businesses wasting huge sums on avoidable recruitment costs. For the 11 markets analysed in the research, the total could be as much as S$188.1 billion in both lost productivity as well as avoidable recruitment costs.
The study, Adapt to Survive, for the first time analyses millions of interactions from LinkedIn’s network of 277 million professionals, of which more than one million are in Singapore, and information on 2,600 employers from PwC’s Saratoga database, one of the world’s largest and most robust resources of people and performance metrics, to understand which countries are better at aligning talent with opportunity.
It examines five key talent behaviours within 11 markets and identifies two significant ‘costs’ which are based on the surveyed markets being as good at matching talent with the right opportunities as the Netherlands – the most adaptable market in the study:
Most adaptable countries according to the Talent Adaptability Score3
The research spans a wide spectrum of economies by development phase, size and industry types. Each market is assigned a Talent Adaptability Score based on five key behavioral factors, which include: the average number of times professionals in that market switch industries, the average number of different positions held in a professional’s career, the average number of internal promotions in that market, the average number of employers a professional has had in each market and the average number of open vacancies divided by the market’s population.
The Talent Adaptability Score is a powerful indicator of a market’s ability to respond to future shifts in demand, not a snapshot of current economic performance. Scores varied significantly by country, with Singapore ranking joint 4th – on par with the United States, but behind countries like The Netherlands – due in part to its position as a regional hub for many international companies and its high promotion rates within its workforce.
Commenting on the findings, Alywin Teh, People & Change Partner and Consulting Leader, PwC Singapore said:
“It's fantastic that LinkedIn and PwC have been able to link the adaptability of talent with productivity. For the first time, this provides solid evidence that searching, screening, securing and developing the right talent - those who are adaptable and willing to continuously develop themselves - really contributes to a higher productivity. These findings will not just help MNC's and SME's in Singapore in dealing with their talent management challenges in an efficient way, but also provide invaluable insights for Singapore as a country to further improve workforce productivity.”
Feon Ang, Regional Director for LinkedIn Talent Solutions in APAC, added:
“The results of the study underscore the need for everyone involved in the talent ecosystem, including members of the workforce, companies and institutions, to continue stepping up their efforts to nurture and hone skills, so as to create positive economic impact. In particular, countries that are strategic hubs for key industries, such as Singapore, will naturally play a dynamic role in advancing a talent agenda that reflects the future demand and supply of critical skills.”
Recommendations for professionals, employers, educators and governments:
The rise of social media and an increasingly connected global workforce means it’s never been easier for people to identify new opportunities, plan to develop the skills, and create a network that will allow them to transition into new roles. This could be as simple as staying up-to-speed with companies that might be hiring in your area, or identifying emerging sectors around the world that could present an opportunity for a dramatic career change.
Talent is the number one factor in competitive success for business, and businesses need to move faster to adapt to new market forces. An existing mismatch of talent in the wrong roles creates a window of opportunity for employers able to identify and attract the right talent to their organisation. Social media has made it possible to identify all the relevant candidates – both active and passive – many of whom may not be doing the jobs they want. Employers should use talent analytics to identify the hard and soft skills that are central to the business strategy today and in the future, allowing them to hire strategically.
Education never stops, and educators should be looking at what skills are in growing demand and which jobs are emerging in the global workforce. They should then adapt curricula so students are equipped with relevant skills when they leave formal education.
Governments should play an active role in shaping a national mind-set that values, nurtures and rewards adaptability. They need to use the levers at their disposal such as employment and immigration laws, as well as proactively shaping education and training systems.
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NOTES TO EDITORS
To explore the data further or download a copy of the report, please visit: www.pwc.com/talentadaptability
We first created a benchmark for adaptability based on five key variables - the Talent Adaptability Score - and then cross referenced this score with the stated productivity of employers in each of the 11 markets through PwC’s Saratoga database of 2,600 employers.
This allowed us to equate improvements in adaptability of each market’s workforce with increases in productivity. We have taken a conservative approach by asking “what productivity could be unlocked if everyone was as adaptable as the Netherlands?”. If you apply their adaptability to each of the 11 markets in this study, there is approximately S$163bn of potential productivity to be gained.
2Avoidable recruitment costs
PwC's Saratoga database captures information on the amount of resignations that occur for people with less than one year of service. This is widely regarded as unwanted, and often avoidable turnover, indicative of a mistake during the recruiting process resulting in a poorly matched employee. Through the Satatoga database, we were able to estimate the number of new hires made in a country in one year, and then determine how many of these resigned within 12 months. We were also able to estimate how many hires would have resigned in the first year if they were performing as well as the Netherlands (4.8% first year resignation rate). By taking the difference between the actual number currently happening, and the better performing number, then we could calculate the number of 'excess' hires in a given year. Combining this with the cost per hire allows us to calculate the savings potential in the 11 markets analysed of S$24.8bn.
3Talent Adaptability Score
Using evidence from LinkedIn profiles and metrics from PwC Saratoga to assess each country in five areas:
Method for overall ranking
Each country is assigned a percentile ranking (on a scale of 0-100) for each of the 5 metrics included. The overall score is then calculated by averaging the percentile ranks across all 5 metrics. To achieve an overall score of 100 would require the country to be best performing in each metric relative to the other countries.
Founded in 2003, LinkedIn connects the world’s professionals to make them more productive and successful. With more than 277 million members worldwide, including executives from every Fortune 500 company, LinkedIn is the world’s largest professional network on the Internet. The company has a diversified business model with revenues coming from member subscriptions, marketing solutions and hiring solutions. Headquartered in Silicon Valley, LinkedIn has offices across the globe.
Candy Li, PwC LLP Singapore (Tel: +65 6236 7429 Email: firstname.lastname@example.org or email@example.com)
Tan Yin Yin, Edelman for LinkedIn (Tel: +65 6347 2346 HP: +65 9637 7987