city UN 2018

(United Nations, 2018)

This article is brought to you thanks to the strategic cooperation of The European Sting with the World Economic Forum.

Author: Pearly Siffel, Strategy and geographic expansion leader, international, Mercer


In the next decade, nearly half of all global GDP growth will come from around 400 cities and growing economies that are on a trajectory to reach 1 billion new consumers.

With such rapid growth comes fierce competition for highly skilled talent. Although economic opportunities make these cities appear attractive financially, economic growth alone cannot guarantee they will be able to attract – and keep – ambitious, mobile and driven workers. What must employers, both in the public and private sector, therefore, do to attract the best people and motivate them to stay?

To answer this question, Mercer’s commissioned a study, People First: Driving Growth in Emerging Megacities, which surveyed 7,200 workers and 577 employers across 15 cities in seven countries to investigate the under-examined, yet highly critical, human and social reasons for why people move to, within or out of a growing city.

While most city studies rely upon secondary research or academic papers analysing economic data and investments, technological advancements, and movement to smart cities, this study examined employer and worker views in growth cities to discover meaningful gaps and points of tension, and to identify practical solutions for employers to effectively compete for talent.

Fifteen current and future megacities were shortlisted based upon their strong projected GDP and population growth for the next decade. Today, the 15 cities – Belo Horizonte, Curitiba, Chengdu, Hangzhou, Nanjing, Qingdao, Ahmedabad, Chennai, Hyderabad, Kolkata, Nairobi, Guadalajara, Monterrey, Casablanca and Lagos – have a combined population of 114 million. By 2030, this is expected to grow by 30% to 150 million – equivalent to the size of Poland or that of Denmark, Finland, Belgium and the Netherlands combined.

Perception gaps between employers and employees need to be addressed

As part of the study, employers and workers were asked to rank 20 decision-making factors by importance against four vital and interrelated pillars – human, health, money and work.

Meaningful gaps were discovered between what workers value and what employers believe is important to people when deciding whether to move to, stay or leave a city. The research suggests that what matters most to workers depends on the decision the individual is trying to make.

When deciding in which city to live and work, people rank human factors as the most important. They rate life satisfaction as two times more important than employers realize. This is their number one consideration, followed by safety and security and proximity to family and friends in fourth. Third on their list is pay and bonuses – often a proxy for quality of life. Employers place twice as much weight on career and job opportunities twice as workers do.

However, when deciding on a neighborhood, people place equal importance on all four pillars and care about proximity to supermarkets, banks, public transportation, schools and healthcare. Employers, by contrast, put more emphasis on income and career incentives when attracting the best talent from other cities and fail to listen to the entirety of people’s needs, including very pressing social and human desires.

Employers have a critical role to play in addressing all dimensions of workers’ needs and some are already making the effort.

“In India, some of the more enlightened employers are taking it upon themselves to either do their own training or talk about training programs in Singapore that they would avail for their more experienced staff,” says Alice Charles, project lead, Cities at the World Economic Forum.

Similar strategies are being deployed in China, says XinYing He, HR director at UECHAIRS: “In terms of effective approaches that we are taking to attract and retain talent in growth cities, we help the whole family settle in so that the employees will feel a stronger sense of belonging to the company.”

Tailored approaches are imperative to succeed

To understand the nuances of workers in the 15 cities, the study investigates people’s needs based on their demographics, life stage, career progression, predisposition to lifelong learning, aspirations and level of financial security. This results in a segmentation study of five personas – confident achievers, white-collar professionals and graduates, struggling vocationals, business owners and skilled tradespeople, and professional families.

While overall satisfaction with life ranks as the number one, most important factor across all five personas, each persona has a unique set of needs and drivers. Employers cannot discount the significant risk in making sweeping generalizations about people and treating them as one homogenous group. A deeper understanding of workers’ needs is critical, and employers must tailor their solutions, approaches and communications to ensure employee needs are met and that they feel empathetically understood.

Tensions between city performance and people’s expectations require attention

Based on each of the 15 cities’ current performance against the four pillars, they were grouped into three stages of progress:

  • Advanced cities that scored well in all four pillars with a small-to-medium gap between workers’ expectations and the city’s performance; progressing cities that have a mid-size gap;
  • Progressing cities that have a mid-size gap;
  • Approaching cities that are low across all four dimensions and have the biggest gaps and tensions. approaching cities that are low across all four dimensions and have the biggest gaps and tensions.

Looking at the cities’ performance against workers’ expectations reveals that while overall cities are doing well on culture, education, skills development and economic aspects, there are significant tensions across three factors: security, safety and lack of violence; affordable housing; and transportation, traffic and mobility. Another striking observation is that even within a country, life satisfaction varies significantly across cities – underscoring the importance of meeting this essential need if growth cities and businesses are to compete for highly skilled workers.

Public-private partnerships are imperative to address systemic issues

In many of the growth cities, companies are finding new ways to ensure workers’ well-being. But for cities to future-proof themselves with the kind of workers that make them competitive and enable them to leapfrog larger, tier-one cities, a coordinated effort is required from governments and businesses.

According to the study’s findings, workers do not expect any one group to be responsible for addressing the systemic issues of a city. They expect the city or local government (79%) to lead along with the support of the national or federal government (74%) and large businesses (57%).

“We are seeing the breakdown of government providing for the people,” says Hope Frank, Mercer’s global experience officer.

“For the first time, businesses have been asked to take the hero’s journey and make the world a better place for their employees. There is now a clear mandate for CEOs to, first and foremost, create a positive journey and a fulfilling future for their people. Companies that are able to rise to the occasion will be the ones that successfully attract and retain top talent.”

 

To accurately represent workers’ needs, employers must broaden their thinking and recognize that career and job opportunities are not sole motivators in talent attraction and retention. If employers do not represent the needs of workers, there is no guarantee cities will do so in a way that will be truly attractive for people to move in and remain.

To address systemic issues at scale and create environments in which people can thrive, governments, businesses and policy-makers must join forces – together they can better understand people’s needs, tackle the complex problems of rapid urbanization, find solutions to succeed in new and untold ways, and allow people to live healthier and happier lives.

Alternatively, they risk getting left behind.