Labor market efficiency: Rigidity of employment

The ability of companies to flexibly manage their workforce and quickly hire and fire employees is an important factor in general business competitiveness. Summarized below is an index that measures company's flexibility to manage their workforces in different countries. The index has values of 0 to 100 with higher values indicating more rigid regulation.

The United States has the most flexible employment market and Canada comes a close second.  The larger outsourcing locations of the Philippines, India and China are all in the lower half and have a clear opportunity for improvement.

Data is sourced from the annual Doing Business survey copublished by the World Bank, IFC and Palgrave MacMillan. The rigidity of employment index is the average of 3 subindices: a difficulty of hiring index, a rigidity of hours index and a difficulty of redundancy index.