Australia for Workers

Country falls short of top ten for employees.

Australia for Workers

Australia & New Zealand

The ManpowerGroup Solutions Total Workforce Index (TWI) has shown Australia falling just short of a top 10 finish in a global ranking of the most desirable locations for employers, with productivity and cost efficiency weighing on the nation’s global competitiveness.

measures the ease of sourcing, hiring and retaining workers across 75 countries. The TWI uses a proprietary algorithm to assess 90 factors across four key categories for both contingent and permanent workers. Those categories are workforce availability, productivity, labour regulation and cost efficiency. The Index provides the first ever global ranking of the most favourable markets for employers to conduct business and hire staff.

The 2017 Total Workforce Index places Australia just outside the top 10 desirable countries at number 11. New Zealand ranked first followed by Hong Kong, Singapore, Canada and the United States (US).

Australia was inside the top 10 for two of the four categories; ranking 8th for workforce availability and 9th for regulation. Workforce availability is defined as a relative comparison of the available workforce in each country and the likely sustainability of that workforce based on emerging and ageing workforce trends. The regulation ranking provides a relative comparison of how restricted the terms and practices of workforce engagement are based on a standard set of regulations.

Regarding productivity and cost efficiency, Australia ranked outside the top 10 for both. Productivity measures the number of hours an employer can compensate at base pay, while cost efficiency provides a relative comparison of wage, benefits, tax and operations metrics.

Productivity growth has remained relatively low over recent years in Australia in association with low wages growth. The TWI suggests low productivity and high operating costs are a potential disincentive for employers to enter or increase their presence in the Australian market.


Jamie Butterworth, general manager, ManpowerGroup Solutions Australia, believes this first Total Workforce Index provides an important snapshot of Australia’s relative competitiveness and identifies key areas for improvement. "Australia has established itself as a competitive and desirable market for employers," said Mr. Butterworth. "We have a robust regulatory environment that manages the interests of both employers and employees where the rule of law prevails. We also have a workforce that is well-trained and highly-skilled for the jobs of the future.

"However, there is still work to be done. In particular, we must find renewed enthusiasm for productivity growth, which is essential for a country that desires to be a high wage economy. Without productivity growth, Australia will simply price itself out of the market,” he added.

While falling just outside of the top 10 destinations for employers globally, Australia ranked 4th in the APAC region – where the majority of the world’s workforce is based – behind New Zealand, Hong Kong and Singapore.

Of interest to Australian policy makers and exporters will be the ranking of China where higher taxes and statutory burdens are decreasing competitiveness. Globally, China ranked outside the top 25 most desirable markets and outside the top 10 for cost efficiency, signalling that a long-run advantage in labour costs may be coming to an end.

Meanwhile the ManpowerGroup Solutions report notes there is considerable upside for India where the workforce will exceed 900 million by 2020, edging it ahead of China as the world’s largest workforce economy. The research shows a disparity between working age population and the active workforce, suggesting India’s workforce is underutilised with considerable room for growth.

The report also draws attention to the informal workforce, defined as workers with no formal contract who earn compensation on a per-job or per-gig basis. These workers with no contracts are the real participants in the ‘Gig Economy’. According to the research, Australia has one of the smallest estimated informal workforces as a percentage of the total workforce at 6 percent. That is in stark contrast to countries like Vietnam (43 per cent), Thailand (42 per cent) and India (41 per cent). It is also well below the average for all global regions, excluding North America.



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