Europe regularly positions itself as a prime place to invest: direct investment stocks held by foreign investors amount to nearly 10 trillion in the EU alone, the world’s largest single market by number of consumers.
With that in mind, outside companies are always on the lookout for where best to grow their business, but the old continent’s political, legislative and administrative fragmentation makes it harder to work out exactly which country might be best.
A new study may be able to help point them in the right direction, however, as it ranks the best and worst places for companies looking to hire in Europe.
According to the Conference Board — a global, US-headquartered business research think tank — great skills, strong business culture and relatively moderate labour costs make Denmark the prime hunting ground for companies looking to settle or expand in Europe.
The report’s top 10 is dominated by northern Europe, along with smaller but wealthy economies that excel in adaptability and skills. Each of its categories are ranked out of 100.
Switzerland, in second place, was the only country to score a perfect 100 points in talent and skills — although its high cost of living remains a challenge for companies looking to hire there.
Germany: Demographic pressure and high labour costs
Germany is the only G7 economy to make it to the top 10.
But the report highlights significant issues, such as the demographic decline in economically active people threatening labour supply, as well as rising labour costs and slow digital adoption.
The country also scored particularly poorly in terms of workforce competitiveness (25), with the second-lowest score of the 20 best-performing countries overall, after Portugal (19).
UK: Brexit chaos eased by strong talent pool and services
The UK follows Germany closely in 12th place, held back by post-Brexit regulation uncertainty, as well as chronic uneven regional investment.
Researchers, however, say that the UK’s labour market remains relatively flexible, supported by dynamic job creation and a strong services sector, with a solid talent base.
“The overall profile is one of an agile but constrained labour environment reliant on services-led growth and international talent flows”, says the report.
France and Italy: Opposite problems, similar ranking
France (18th) and Italy (20th) perform less strongly.
The former’s competitiveness is hampered by its rigidity: “complex regulation, and limited flexibility slow how quickly firms can adapt and scale”, the report’s author, Robert Maillard, told Europe in Motion.
The latter seems to struggle at the other extreme, dragged down by governance challenges, management quality issues, and slow innovation beyond its traditional industrial clusters.
“Italy is not short on skills — it struggles to turn them into productivity at scale,” Maillard said. “Weak digital diffusion, demographic decline, and governance frictions keep strong industrial know-how from translating into economy-wide performance.”
“Both countries have strong talent and institutions, but structural frictions limit how effectively that potential translates into agility and competitiveness,” he added.
Cyprus, Greece, Croatia, Poland, Slovakia and Bulgaria rank last, all earning fewer than 30 points.
Ultimately, what matters the most to international headhunters?
The organisation also asked HR bosses and leaders what they really look for in their employees when considering where to relocate and expand.
Having the right skills for current and future roles is the priority (51%), while high productivity supported by strong tech capabilities (28%) is next, alongside competitive labour taxes to keep costs down (28%).
Opportunity equality in the labour market was overwhelmingly chosen as the least important factor among those listed (62%).