As the global economy has continued to firm, many small- and medium-sized enterprises, as well as multinationals, are shifting their focus to new markets. Of particular interest has been expansion into EMEA (Europe, the Middle East, & Africa). Across the globe, however, talent shortages continue to be a top concern. KPMG’s 2018 Global Insights Pulse Survey reports that 55% of respondents state that they expect to face challenges sourcing and hiring the right talent, causing a negative impact on business. 2018 trends show looming concern about the continued rhetoric of de-globalization, trade protectionism, and economic populism. Such trends mark what could become a more restrictive process to entering new markets. Despite this, talent acquisition in EMEA offers companies the opportunity to engage in a thriving marketplace and to source and hire top-tier talent.
Home to the three largest economies in Europe, Germany, France, and the United Kingdom, Western Europe offers an established market and access to some of the world’s most premier talent, making it a prime location to recruit in EMEA. In 2017, Norway (1), Finland (2), Switzerland (3), Germany (6), and Sweden (8) ranked in the world’s top ten for their respective population’s human capital, due to their high educational attainment and success in effectively deploying their population.
Central & Eastern Europe
Having recently undergone a resurgence in technology services, Central & Eastern Europe offer those seeking to secure bright professionals a qualified talent pool. The region offers those sourcing talent in EMEA a less expensive labor force and strategic location between Western Europe, the Middle East and Africa. In Eastern Europe, Slovenia (9), Estonia (12), the Russian Federation (16), Czech Republic (22), Ukraine (24), and Lithuania (25) all ranked above the 70% threshold of the Human Capital Index 2017, meaning that they have successfully tapped into 70% or more of their population’s human capital.
Despite having attracted some negative comments in mid-2017 for what some believed to be a shift towards more nationalistic sentiments, the region has remained by and large attractive for business. Since inauguration into the EU in 2004, former communist nations offer far more robust growth projections than Western Europe, as well as compared to many other emerging markets. While the cost of talent has increased particularly among the region’s more developed nations, these are in line with other emerging markets, making Central and Eastern Europe still competitive given the skill and education level of its workforce.
In Deloitte’s 2018 Central Europe CFO survey, economic confidence within the region has increased to 60%, a 49 percentage point increase. In addition, CFOs are predicting high GDP growth within the region. Of all the countries, CFOs in Bulgaria and Slovenia have the highest optimism, with 54% and 55% of participants expecting GDP growth of at least 2.6%. Alongside the positive sentiments for GDP growth, CFOs in the region are also expecting a decrease in the unemployment rate. The cost of employment is expected to increase in the region as a whole due to low unemployment and increased pressure to compensate employees higher than in previous years.
Middle East & North Africa
Within the Middle East & North Africa, Israel, the United Arab Emirates, Bahrain, Qatar, and Turkey are ranked as the region’s best locations in regards to their human capital development and talent. Saudi Arabia, home to the region’s largest economy, has taken significant steps to improve its education system and develop stronger staff training programs. On the other hand, Egypt is home to the region’s largest population and holds the areas most diversified talent pool and economy.
As a whole, Africa has undergone a significant transformation in openness to global business and trade from 2007 to 2017. Ghana, Mauritania, Mozambique, and Niger are at the forefront of this trend. From a human development and capital perspective, Rwanda, Ghana, Cameroon, and Mauritius are noted for having developed over 60% of their human capital. Although the region faces some disparities, it is home to the youngest population in the world. As the middle class continues to expand, education improves, and its cities continue to grow at a rapid rate, there is no doubt that as some key economies in the region diversify the continent will become a vital place to do business. Although many economies within Africa have experienced lagging growth due to low commodity prices, overall the 2017-2018 outlooks have remained positive. This is largely the result of domestic demand and an improvement in commodity prices. Further, the continents’ growth is shifting from natural resources to business as improvements have continued for both the political and business environments.
If you’re considering expanding into EMEA but aren’t sure where to begin, reach out to Velocity Global today to learn more about how we can assist with your global expansion.