Economy 21 November 2017, 10:59am

Hungary disastrous at retaining talent - IMD reports

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Out of 63 economies Hungary ranks 54th in the 2017 IMD World Talent Ranking which aims to assess the extent to which countries develop, attract and retain talent to sustain the pool that enterprises employ to create long-term value. Switzerland finished first, followed by Denmark and Belgium. The dominance of Europe is also indicated by the fact that 11 economies of the first 15 are located on the Continent.

The Switzerland-based Institute for Management Development (IMD) publishes its World Talent Ranking every year, which assesses the status and the development of competencies necessary for enterprises and the economy to achieve long term value creation.

It does so by using a set of indicators which measure the development, retention and attraction of a domestic and international highly-skilled workforce. The methodology of the WTR defines Talent Competitiveness into three main factors:

Investment and Development (the investment in and development of home-grown talent)
Appeal (the ability of the country to tap into the overseas talent pool)
Readiness (the availability of skills and competencies in the talent pool).

These three factors comprise 30 criteria, although each factor does not necessarily have the same number of criteria (for example, it takes more criteria to assess Readiness than to evaluate Investment and Development).

Hungary slipped three spots to the 54th place among the 63 economies studied by the IMD. In 2013, Hungary still ranked 41st.

The chart reveals that the low rank is a consequence of the dreadful performance in the Appeal factor. Assessing the components, we find that the greatest problems of Hungary in this category are brain drain (63), the effective personal income tax rate, and worker motivation (61).

As regards Hungary’s regional rivals, Lithuania (33) and Poland (34) are ranked the highest, while retaining talent is even problematic for Bulgaria (58), Croatia (60), and Romania (61).

The top of the list remains unchanged compared to 2016. Switzerland is in the lead, followed by Denmark and Belgium. The next seven places are also occupied by European countries. Canada on the 11th spot is the first non-European economy in the ranking.