Organizations with the closest alignment between their geographical talent footprint and market opportunity tend to be most productive and profitable. According to Right people, wrong place?, a new EY report in collaboration with LinkedIn, the world’s largest professional network online, organizations can make major performance and productivity improvements by taking a more strategic approach to where they place their people.
The report analyzed 659 organizations of varied size and scale across 11 sectors and revealed that those that poorly match their workforce to the global sub-sector growth markets are potentially leaving hundreds of millions of dollars of opportunity on the table. Bringing together a combined analysis of current and projected industry market performance from EY with LinkedIn’s insights from more than 530 million members, the report validates and quantifies the value of maximizing the alignment between workforce location and market opportunity.
According to the findings in the report, in the pharmaceutical sector, for example, a typical organization increasing their talent-to-market alignment by 10% could increase their yearly profit by US$77m based on a sample of 71 pharmaceutical sector firms. For these pharmaceutical sector organizations, moving from a median talent-to-market alignment to best-in-class has the potential to be worth over US$690m in increased annual profits.
The difference in revenue growth between the best- and worst-performing firms was most dramatically illustrated in the automotive sector. Firms in the top quartile saw growth figures of 9.8% between 2012 and 2016. Firms in the bottom quartile, on the other hand, saw revenue growth decline by 4.3% over the same period. Getting talent aligned to market opportunity was worth a massive 14.1 percentage points in terms of revenue growth.
Stakeholders can refine their approach to market alignment strategy by continuing to interrogate their own ways of doing things. In addition to corporations, policymakers and investors have a key role to play in shaping the regulatory, legal and financial landscape in which these changes can be realized.
Multinational companies must constantly transform their business operations to compete on the world market and meet their strategic business objectives. Our Labor and employment law challenges in business transformations guide focuses on matters of key strategic importance for multinational companies on a country-by-country by basis.
The guide includes advice on:
- Workforce restructuring
- HR legal mergers and acquisitions
- HR post-merger integration
- Contingent workforce
Access the guide here.
EY legal services contact:
Paula Hogéus – Global Labor and Employment Law Leader
Roselyn Sands – Global Labor and Employment Law Markets Leader