Regulatory overview is a relative comparison of how restrictive the legislation is for hiring practices in the selected workforce. Regulatory factors influence both sourcing and hiring practices as well as the potential of a market to yield productivity and cost efficiency. When a market is heavily regulated but highly cost efficient with respect to wage levels, it may become more expensive than markets with less regulation due to loss of productivity. The most common examples of regulatory factors that can raise costs by reducing productivity are in the defined length of a workweek and overtime requirements. Each regulation will have a ripple effect on the hiring process.
While each of the category rankings looks at a single aspect of the labor force, the regulatory framework of a labor market is potentially the most influential overall as it impacts each of the other categories to some degree.
The top markets for regulatory ease are certainly not the largest workforce economies, and the maturity of their regulations does not allow for any overlap among the most cost efficient markets. However, there is something greater to consider regarding these workforces.
Australia, Denmark, Ireland, New Zealand and Singapore all rank among the top 10 for both workforce availability and regulation, with New Zealand and Singapore also ranking among the top 10 markets for productivity. Again, while not necessarily among the world’s largest workforce economies, each of these represents an above average opportunity for organizations looking to drive workforce strategy through labor arbitrage.
Among the four categories, Regulation might be the most volatile consideration in today’s global workforce, and legislative nuances are usually in flux. For example, Belgium’s Workable & Flexible Work Act removes working-hours restrictions and increases productivity, while Switzerland is considering new immigration restrictions and costs associated with contingent workers that could impact local workforce efficiency in 2018 and beyond.
For more information, interactive charts and to download the full Total Workforce Index™ visit the Total Workforce Index™ microsite from the link below.