On the “Luxembourg Community Event” organised by the Brand Image Promotion, better known as the Luxembourg – Let’s Make It Happen initiative, Steve Duncan, Managing Director of C Studios, delivered a keynote on Talent Attraction. FEDIL was able to talk to this international expert and advisor beforehand about the best way to promote the country and its companies as an attractive employer.
Mr Duncan, you are in regular contact with clients and organisations on a global level. Before I go into detail and talk about the situation in Luxembourg, I would like to ask you for your overall assessment of how the labour market has developed in recent years.
I have worked in the economic development industry for 20 years. When I started, it was very much about business attraction. More and more it is about talent attraction. And I would argue that it’s more today about talent attraction than it is about businesses. Businesses will follow the talent and there is just so much pressure on the labour market right now with various demographic trends that are making it very challenging for companies. And so, governments, investment promotion agencies, all these place-based organizations have had to turn their attention, out of necessity, to talent attraction. And it is challenging because of things like geopolitics, local politics, and this great mismatch of skills. We need to somehow figure out as an industry, as places how to realign that so that the underemployed, the unemployed can find the work that they need.
According to last year’s Economic Barometer of the Luxembourg Chamber of Commerce, 55% of Luxembourg businesses consider the lack of skilled labour to be the main challenge for their economic development, especially for adapting to the ecological, digital, technological transitions. In your eyes, what are the reasons for this situation?
You have low birth rates, you have an aging workforce, and then you have this massive technological change. So, the three trends are all making it very difficult to find people with the right skills. The pace of change is much different than any other massive industrialization period. The systems that are created in education to develop workforce over a long period of time are sometimes out of date by the time those people are ready and qualified. And this is a global problem. So, the adaptation of workforce development systems is required. We actually use an analogy that workforce development is like an oven. It can take a really long time to get it going, but once it is going, it tends to provide a strong contribution. The upskilling for new skill sets that are in demand is more like a crockpot. It doesn’t take quite as long but can still require some time. And then there’s the microwave approach, which is talent attraction. And that can help fill gaps much more quickly by getting people from other populations, other locations to move quickly. That is a short-term fix. You really need an approach across all three of those timeframes to fully execute. But talent attraction is very popular now because the pace of change of the skills is very quick.
Considering the shortage of skills and talents, today the job market is obviously candidate driven. Having many opportunities, candidates have high expectations and impose their conditions. This can go as far as the candidate’s no show after agreeing to a job offer and signing a contract. What would be your recommendation to employers to face this new situation? How to make their company THE place to work?
From the survey data that we see, work life balance is incredibly important. It used to be salary as the most important factor in choosing where to work. Since the pandemic in particular work life balance has become almost on equal footing. You don’t have to compete just on salary, you can compete on the work environment, you can compete on the work life balance. Companies may see that as a threat, in the sense that: are people going to work as hard? That can be challenging, certainly. But if you create a rewarding place to work, you can be competitive. It’s not just about the money right now, other incentives can also play a role in this. And they don’t have to be significantly expensive. There are a number of incentives around continuing education. We find that people are willing to relocate if they’re provided upskilling resources. So, if somebody is maybe lower skilled but has a chance through upskilling resources to change the career trajectory, that is very appealing to them.
I would also say companies need to work with their governments, their place-based organizations very closely. Companies know how to sell their career opportunities quite well. When it comes to attraction of internationals, their brand isn’t quite as strong. So, they need to lean more into the place brand. And that is where they’re able to work with their place-based organizations. If they are able to partner with them, it’s a huge opportunity to find people that genuinely want to work in an interesting location and they are finding your company through that opportunity that can usually foster a very positive relationship.
Beyond the attractiveness of individual businesses, the attractiveness of the country as a whole comes into play when it comes to attracting talent from other countries, throughout the EU, but especially also from non-EU countries. According to you, what levers does the government need to activate to create optimum conditions to make the country attractive (again) as an employer?
We did an analysis of several talent competitive countries recently. And there are three major areas that seemed to separate the top performing countries from the lower performing countries. The first area is quality of life. It’s things like cost of living, good healthcare, a welcoming and friendly population, it’s factors that contribute to overall happiness. So, the quality of life that’s placemaking. You have free public transport here. You’re centrally located here in Europe, which makes it very attractive for people that want that European experience. So, quality of life is number one. Number two is good policy. That is making sure that procedures and bureaucracy are at a minimum for internationals. It is special programs to attract high demand workers. Several countries have various tax programs that are friendly to expats to help increase competitiveness. You have that policy aspect of things as well. That is where countries like Germany right now are struggling quite a bit. And then the third aspect is the lived experiences of the expats that are already here. There are several rankings out there that look at what current expats are experiencing. The first two factors are related to this third one. But the actual lived experience then creates word of mouth. It creates demand, it creates goodwill that just continues the positive cycle or the negative cycle, depending on what that experience is.
For the first quarter of 2024, the job vacancy rate in Luxembourg was 1.5, compared to the European average of 2.6. The situation in Belgium (4.4), Germany (3.5), the Netherlands (4.4) is worse, and this stresses the competition between countries about talent attraction. In terms of country attractiveness as an employer, what do you think are the best examples to follow?
One thing that did come through in our analysis was it does seem like the places that are very competitive are also engaging in place marketing initiatives, either at the federal level or at the local level, sometimes both. Finland is a great example. They have the “Work in Finland” initiative. However, the city of Helsinki has its talent attraction efforts also underway. In the Netherlands, there are federal initiatives, but it’s commonly the local communities such as “I Amsterdam” that have a specialized international program. They have Brainport, Eindhoven, that has been very aggressive in that regard. So at that local level, they have a lot of place branding initiatives that communicate why it’s great to live here. But also here are the jobs that we have available that are fit for internationals.
The best case scenario is to have a national initiative that is integrated with the local initiative. Different emotions are attached to the different levels of location. To take advantage of both of those is really important.
Besides national and local initiatives, does it make sense to launch sector-specific campaigns?
There are initiatives like that. In Ireland, there’s something called “Tech/Life Ireland”, that is a public and private sector initiative to attract the tech industry and tech talents to Ireland. And so that is a perfect example. I think a public private partnership is a great way to go. You get that public sector support, but you also get the private sector input. Certainly, industry organizations that are facing this challenge of talent are a great way to get involved. If they can partner with government, that’s often where the best mix is because you still need that government infrastructure. Companies are very good at selling their career opportunities, it’s these place-based organizations that are really great at selling the place.
And I will say one strength that Luxembourg has is its size. Big governments tend to move very slowly. Luxembourg has size to its advantage. It can be more nimble. You can make connections across public and private sector more easily and that should be seen as a strength.
After 2023 has been the European Year of Skills, we cannot claim that the European area is harmonised and free of obstacles to the free movement of workers. For a small country like Luxembourg with an open economy and 47% of cross-border workers, harmonised agreements on teleworking, secondment, etc. are crucial. I guess you agree.
On European level, there are some initiatives. There is an organization called EURES and they have recently launched a job portal that helps promote job opportunities within the EU to help facilitate the redistribution of skill sets and workers to where the jobs are needed. There are plans to extend that to non-EU and open up opportunities outside the EU. It is an ongoing effort to move in the right direction.
Concerning cumbersome procedures and regulations, there are some countries where there are expedited visa processes for high demand skills. This is an attempt to fast track the immigration process for those areas of critical need. I believe the UK has a program around that. Finland has a program around that. I believe Portugal as well.
Given FEDIL’s field of activity – I mean the industry – one of our missions is also to show that the industrial sector offers plenty of opportunities and challenges in terms of career development. Through our HelloFuture initiative, we are trying to encourage pupils and students to take up technical and scientific studies to prepare them for a future in industry. What would be your advice to be convincing?
We always say that where you can use data, facts and success stories to build credibility and to share your message, those three elements are very hard to dispute. People buy from people. People are inspired by people. And so, where you can show the successes of others, this is very helpful. And I think it’s really important to share what is the earning potential, what is the time to get retrained, trained in the first place, what is the job growth of certain positions over a period of time. If you can build out this story of what does my future hold for me. People ultimately want a higher standard of living. That doesn’t always mean you have to go to university for four years and work in an office. There are plenty of other pathways for that. Unfortunately, the office jobs have sucked up all the air. They’ve told that story better than the industrial sector.
The technological change right now is a great opportunity. There are a lot of jobs that are hard to replace with technology alone and there is opportunity in the quick changing industrial sector. They just have to tell the story better and build out that vision for people. For some people, that can be intimidating, but it can also be very exciting. We should be encouraging people to evolve with that pace of change. Not see it as an enemy but see it as something that is exciting and enriching and fulfilling.
All the research says people are open to upskilling and retraining. My advice for industry is really think through what that story is. Build the mechanisms to connect people with the resources that they need.
Maybe one last comment is there is no silver bullet, as they say, to solve the problem. It requires a multi-layered approach. There is not one solution. There are many solutions. Each one has its incremental benefits, but to solve massive change, you have to engage across each of those layers. And so patience, big thinking, diverse thinking is required.