LinkedIn in association with PwC has published a new report on people’s talent adaptability in organizations and its impact on the business and the findings confirm that – the inability of people to retrain for new skills or switch industries, is costing the Indian and other economies billions of dollars in lost productivity leading to businesses wasting huge sums on avoidable recruitment costs. For the 11 markets analysed globally in the research, the total could be as much as high as US$150 billion.
The study, Adapt to Survive, analyses millions of interactions from LinkedIn’s network of 277 million professionals out of which about 9% (24 million) are in India. This analysis was further cross referenced with information on 2,600 employers from PwC’s Saratoga database, to understand which countries are better at aligning talent with opportunity. It examines five key talent behaviors in 11 markets and identifies two significant ‘costs’, which when combined could mean that India is likely losing approximately INR 53,000Crs from its economy.
So how does India rank compared to the 11 countries studied in Talent Adaptability?
- Overall Talent Adaptability Ranking – India is ranked at the bottom of the table in 10th position, above China with a closer proximity to Brazil in 9th.
- India is ranked last (11th) in the Average number of profile positions and Average number of employers listed on LinkedIn – which shows there is still a long way to go for us in the adoption of technology and platforms like LinkedIn to build social profiles about the company/organisation and also to have a well defined profile positions for each task or work and less of do-it-all generalist approach
- The only silver lining (or not) is that India ranks second in Industry switching rate below Netherlands – The good news is that India ranks high on the critical parameter which determines the adaptability of people to switch not just roles in same sector but across as well, but what needs to be analysed is that if the switch is happening to quick before any significant work contribution is done by each person in the current industry before switching to other
A lost opportunity to generate INR 50,800Crs in additional productivity – The research found a strong correlation between the adaptability of talent in a particular country and the performance of its companies. If India was better at matching talent with the right opportunities, this could unlock as much as INR 50,800Crs in increased productivity. In the 11 markets studied this could be as much as INR 7,60,000Crs.
Avoidable recruitment costs of INR 2,230Crs – Lack of access to the right talent is driving up the cost of recruitment for employers today. Longer time taken to find the right candidates combined with the increased likelihood of mismatched talent leaving jobs sooner are costing Indian companies INR 2,230Crs in avoidable recruitment cost and a combined total of INR 1,16,000Crs (approx. US$19.8bn) for the 11 markets analysed.
Overall summary from the study
Some markets are more adaptable than others – Talent Adaptability Score – a benchmark that evaluates a country’s ability to match talent with opportunity shows – The Netherlands, UK and Canada recorded the highest Talent Adaptability Scores of the 11 markets in the study.
Adaptability could unlock billions in additional productivity – Markets with the most adaptable talent are more efficient and productive – a better talent fit between employer and employee results in a greater return on an organisations investment in people unlocking USD$130billion of additional productivity for the countries covered in this report.
The skills gap will narrow with increased adaptability – Worldwide unemployment continues to rise while jobs go unfilled. Half of all CEOs globally intend to increase their headcount over the next year but 63% are worried about the availability of key skills. As talented people become more adaptable, the skills gap will shrink, leading to better economic performance.
Compromising on talent costs the global economy – In less adaptable talent markets poorly matched candidates drive up recruitment costs associated with hiring and onboarding people. The hiring process takes longer and recruits don’t stay. This creates a cost burden of USD$19.8billion a year for the markets that were considered in the study.
Visibility created by social professional networks leads to better hiring – Professional networks give organisations access to a larger talent pool and critically to passive candidates, those not actively looking for jobs. More visibility, coupled with adaptable talent and broad-minded employers creates better hiring.
Methodology and Ranking
Using LinkedIn profiles and metrics from PwC Saratoga database – each country was assigned a percentile ranking (on a scale of 0-100) for each of the 5 metrics:
- The promotion rate (scaled to take account of growth in the home market) – which indicates the reward offered by employers as the value of talent increases
- The market vacancy rate – the lower the vacancy rate, the better the fit of talent to available jobs
- Average number of profile positions – the number of positions that professionals list on their LinkedIn profile, which is an indication of the liquidity within the given market
- Average number of employers – the average number of employers each individual has had, in any sector, which is a proxy for liquidity of opportunity
- The industry switching rate – the rate at which professionals switch between different sectors, which shows their willingness to apply their skills to different areas
The overall score was 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.
No matter the size of the business – a multinational company or an young startup – the team and their skills, ability and adaptability is critical in building a scalable successful ventures. What do you think about the talent availability and adaptability in the current Indian eco-system – share your thoughts and views in comments below.