On the podium of the World Talent Ranking, an annual competitiveness ranking dedicated to talent, Luxembourg has this year moved down a step to third place behind Switzerland and Singapore. To compile this ranking, the Intenrational Institute for Management Development (IMD) uses a set of just over 30 indicators, almost half of which are based on statistical data. The Luxembourg Chamber of Commerce also contributed to this ranking by collecting data directly from companies.
The country's score remains good, but it does reveal certain shortcomings. In terms of investment and the development of local talent, the country ranks second. "These investments are the country's strong point", the report states. The country's performance in this area has remained stable since 2020. This good result can be explained in particular by a high level of public spending on education per pupil (1st) and by a good pupil-teacher ratio: one teacher for every eight pupils in primary education and one teacher for every 9.5 pupils in secondary education.
On the other hand, Luxembourg only ranks 26th for its apprenticeship system. “A striking fact is that vocational training no longer seems to be a priority for some business leaders.” In terms of vocational training, the country fell from 16th to 30th place, "a result that should give cause for alarm, given that skills development is an essential lever", notes the report.
Availability of labour: the major challenge
74% of the country's employees are in fact foreign workers. So "its attractiveness is a key aspect on which economic prosperity depends", the IMD report points out. The country has a serious capacity to attract foreign labour. In this respect, it ranks fourth. But when it comes to highly qualified profiles, the country ranks 13th. In terms of attractiveness, the quality of life, the attractive remuneration for managers and the high minimum social wage are all assets. This is in contrast to the cost of living, which is "a burning issue that is significantly undermining the country's attractiveness". Indeed, on this point, the country ranks 40th out of 67.
But Luxembourg's main shortcoming remains the availability of labour. In this respect, the country has fallen back to 23rd place. Availability "remains a major challenge, as shown by the survey of business leaders. "Feedback from the field confirms this situation, for both skilled and unskilled profiles", it adds. Over four years, however, there has been a slight improvement since 2022, when the country was ranked 34th. Other European countries are doing better, such as Denmark (5th), Ireland (6th) and Sweden (7th).
While Luxembourg does have the capacity to attract labour, it still lacks skilled workers (ranked 55th) and experienced senior managers. According to the two specialists, IMD and the Chamber of Commerce, this is contributing to a decline in the country's competitiveness. The report also points out that employee motivation is declining (34th place, down from 28th last year). But there have also been some positive developments. For example, in terms of financial skills profiles, the country moved up five places, and four places in terms of university capacity. In terms of language skills, the country ranks fifth. The international experience of managers is also a positive point: the country ranks ninth in this respect. Finally, the number of graduates in scientific and technical subjects has risen, from 19.24% to 22.88%.
Read the French-language version of this report