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Strengthening Lithuania’s Competitiveness in Talent Attraction and Retention

Strengthening Lithuania’s Competitiveness in Talent Attraction and Retention

In the global IMD Talent Ranking, Lithuania has climbed to the 23rd position out of 64 countries, marking the highest achievement for the country in the past 5 years. This significant rise in the ranking has been sustained for two consecutive years, suggesting that Lithuania’s progress in talent competitiveness is not merely coincidental.

According to Jonė Kalendienė, Head of the Research and Analysis Department at the Innovation Agency, the strongest area of talent competitiveness is investment in talent attraction. In 2023, talent attraction was also influenced by the war in Ukraine, which led to a rapid increase in both the workforce and its ratio of women.

“Other areas, such as education funding or health services, do not see an improvement in rankings. This implies that changes in education and healthcare policies could significantly contribute to nurturing talent and enhancing Lithuania’s competitiveness,“ notes Kalendienė.

Based on surveys conducted among Lithuanian business leaders during the Talent Ranking, Lithuanian employers are becoming increasingly critical of both secondary and higher education, in contrast to other nations. Moreover, managerial competences of Lithuanian employees are assessed to be weaker. However, financial competences, higher-level managerial skills, and language abilities receive more favourable evaluations. Overall, the competences of Lithuania’s workforce are perceived as improving (advancing by over 10 positions), yet they remain at an average level in the global context (37th out of 64).

It’s worth noting the IMD researchers’ observation that post-pandemic teleworking and hybrid work models are more appealing and beneficial than harmful in countries with a higher skilled workforce and greater female labour market participation – both characteristics that Lithuania possesses.

According to Kalendienė, the attractiveness of Lithuania’s workforce is experiencing the most rapid growth. Over a span of 5 years, the country has ascended from the 35th to the 27th position. This positive change has been influenced by the decreasing emigration of skilled workers, a favourable balance between the quality of life and the cost of living, and the implementation of appealing talent attraction and retention programs not only at the national level but also within companies.

Kalendienė emphasized that although labour market tensions in Lithuania have somewhat eased during these years of more moderate economic growth, the issue of workforce, especially highly skilled workers, will again become one of the most important concerns as the economy returns to its usual growth rates. “Therefore, policies focusing on talent development, attraction, and retention are highly important, not only for attracting foreign investors but, above all, for helping maintain the international competitiveness of our domestic companies,” says Kalendienė.

In 2023, Lithuania holds one of the highest positions among the Baltic countries in the global talent ranking and continues its growth by rising 3 positions to reach the 23rd place this year. Only Estonia surpasses Lithuania in the Baltic region—maintaining its 17th position in 2023. Conversely, neighbouring Latvia has seen a decline, dropping 12 positions to the 39th place, while Poland has made progress, climbing 6 positions to secure the 44th spot out of 64 countries.

Since 2014, the IMD World Talent Ranking, conducted by the Swiss management institute IMD, has been evaluating how the 64 countries under review are developing, attracting, and retaining highly qualified professionals. In 2023, Switzerland holds the top position, followed by Luxembourg and Iceland.