Economic conditions outlook, June 2022 – Ancient Egypt Is New Again – Human Capital at work – The Value of Experience (Executive Summary June 2022) –

Economic conditions outlook, June 2022 – Ancient Egypt Is New Again – Human Capital at work – The Value of Experience (Executive Summary June 2022)

Today’s TextileFuture Newsletter will offer to you three items for your reading.

The first is from McKinsey and shows the “Economic conditions outlook, June 2022”. It provides the latest survey made by the McKinsey Global Institute, offering to you the latest figures and details.

The second item you should really read carefully is about “Ancient Egypt Is New Again”. It is an invitation to visit or to visit again Egypt, now that travel is less of a burden. The team of Wall Street Magazine has illustrated the outstanding changes the country went through, in other words with lots of pictures.

The third feature presents the Excecutive Summary of a report of McKinsey: “Human Capital at work – The Value of Experience (Executive Summary June 2022)”. It is about how to treat manpower alike and the findings behind.

We from the TextileFuture Team wish you an excellent week ahead, don’t forget to return next Tuesday for finding another edition of our Newsletter. Thank you!


Here is the beginning of the first item:

Economic conditions outlook, June 2022

About the Authors

The survey content and analysis were developed by Krzysztof Kwiatkowski and Vivien Singer, capabilities and insights experts in McKinsey’s Waltham, Massachusetts, office, and Sven Smit, the chair and a director of the McKinsey Global Institute and a senior partner in the Amsterdam office.

This article was edited by Daniella Seiler, an executive editor in the New York office.

A new survey finds that inflation now tops the list of perceived economic hazards in respondents’ home countries and geopolitical conflicts remain a top threat to the global economy.

Just one quarter after geopolitical conflicts and instability overtook the COVID-19 pandemic as the leading risk to economic growth, survey respondents’ concerns over inflation now exceed their worries about the effects of geopolitical issues on their countries’ economies. In the latest McKinsey Global Survey on economic conditions, respondents also see inflation as a growing threat to the global economy and continue to view geopolitical instability and supply chain disruptions among the top threats to both global and domestic growth. 1

Amid this disruption-crowded environment, respondents report uneasy views on economic conditions, both globally and in their respective countries. For the fourth quarter in a row, respondents to our latest survey—conducted the first full week in June—are less likely than those in the previous survey to say economic conditions have improved. Overall, pessimism about the second half of 2022 is on par with the early months of the pandemic in 2020. Exceptionally, however, the mood is much more positive among respondents in Asia–Pacific and Greater China, who report improvements and continue to be upbeat about their economic prospects.

Inflation, geopolitical, and supply chain concerns all loom largeMcKinsey Survey: Economic conditions outlook, June 2022.

Just one quarter after geopolitical conflicts and instability overtook the COVID-19 pandemic as the leading risk to economic growth, survey respondents’ concerns over inflation now exceed their worries about the effects of geopolitical issues on their countries’ economies. In the latest McKinsey Global Survey on economic conditions, respondents also see inflation as a growing threat to the global economy and continue to view geopolitical instability and supply chain disruptions among the top threats to both global and domestic growth. 1

Amid this disruption-crowded environment, respondents report uneasy views on economic conditions, both globally and in their respective countries. For the fourth quarter in a row, respondents to our latest survey—conducted the first full week in June—are less likely than those in the previous survey to say economic conditions have improved. Overall, pessimism about the second half of 2022 is on par with the early months of the pandemic in 2020. Exceptionally, however, the mood is much more positive among respondents in Asia–Pacific and Greater China, who report improvements and continue to be upbeat about their economic prospects.

Inflation, geopolitical, and supply chain concerns all loom large

Respondents’ views of the top threats to their home economies have shifted since March 2022, 2 and they now most often cite inflation as a risk over the next year (Exhibit 1). While geopolitical conflicts were top of mind in the previous quarter’s survey, which ran four days after Russia had invaded Ukraine, respondents are now nearly half as likely to cite geopolitical issues as a risk to their countries’ economies. Geopolitical conflicts and instability remain an outsize concern in Europe, where 50 % list it among their top risks. But even in Europe, inflation is the risk cited most often—as it is in every geography except Greater China. 3 There, respondents most often point to the COVID-19 pandemic

Respondents predict extended disruption related to the Ukraine invasion

We asked survey respondents about their expectations for how the war in Ukraine might affect lives and livelihoods outside the conflict zone. When asked about the war’s effects on the global economy, a plurality of respondents—37 %—select a scenario called 2B, in which hostilities either end or are easing within the next six months and the global response is moderate, with a continued exit from stimulus policies related to the COVID-19 pandemic, reduced decarbonization goals, and a restart of fossil-fuel investments (exhibit).

Geopolitical instability remains the top-cited threat to the global economy (see sidebar, “Respondents predict extended disruption related to the Ukraine invasion”), as it was in the March survey, and inflation has overtaken volatile energy prices to become the second-most-cited concern. Supply chain disruptions round out the top three global risks, followed by volatile energy prices and rising interest rates. For the second survey in a row, more than three-quarters of respondents expect interest rates in their countries to increase in the next six months. 4

Respondents also see supply chain disruptions as major obstacles for their companies’ growth. In the latest survey, that answer choice has overtaken geopolitical instability as the most-cited risk to companies’ growth. These supply chain concerns—and those about the changing trade environment and relationships—are much more common among respondents who say at least some of their companies’ essential materials 5 are produced in China than among those who don’t source materials from China.

Respondents are largely pessimistic about the global economy but more positive about their countries’ prospects

Nearly two-thirds of respondents say the global economy is worse now than it was six months ago—the highest share to say so since the June 2020 survey. That appraisal is much more negative than what respondents predicted six months ago: in our December 2021 survey, nearly six in ten respondents expected to see economic improvements over that time period. At the same time, respondents’ takes on both current and future conditions in the global economy have grown progressively gloomier since June 2021, with half of all respondents expecting conditions to worsen in the second half of 2022 (Exhibit 2).


The findings about respondents’ respective countries also have grown more somber over the past year (Exhibit 3). For the first time since the September 2020 survey, respondents are more likely to say economic conditions in their countries have worsened than improved over the past six months. Views vary widely by region, however. In both Asia–Pacific and Greater China, about two-thirds of respondents say their countries’ economies have improved. The responses from Europe and North America are much more downcast: just one in five respondents in each region report recent improvements in their economies.

That said, respondents’ expectations for their home countries over the next six months are somewhat more hopeful than their outlook on the global economy: 39 % expect their economies to improve in the near future. However, this is the first survey since the one in September 2020 in which less than half of respondents expect improvements in their home economies. Now, they are just as likely to expect economic conditions will improve as decline.

Most respondents in Asia–Pacific and Greater China expect their economies to improve in the second half of 2022, although overall optimism has declined since the previous survey (Exhibit 4). Over the same time period, respondents in Europe and North America have become much more pessimistic about the future.


Here is for you the invitation to visit Egypt:

Ancient Egypt Is New Again

The mania for touring sites and treasures along the Nile is nearly as old as the pyramids of Giza. A recent wave of archaeological discoveries and museum openings has made the experience feel novel.

By Tony Perrottet. Tony Perrottet, a frequent contributor to WSJ. Magazine, is the author of Pagan Holiday: On the Trail of Ancient Roman Tourists and ¡Cuba Libre!: Che, Fidel, and the Improbable Revolution That Changed World History, among other books. | Photography by Quentin De Briey for WSJ. Magazine

One sun-drenched day, circa 450 B.C., an enterprising author named Herodotus set forth by boat from the Nile River delta, upon whose southern fringe loom the pyramids of Giza and the Sphinx, not knowing he was about to spark an Egyptomania that would last 2500 years.

Herodotus’ cruise took him to the New Kingdom capital of Thebes in Upper Egypt, modern-day Luxor, where he contemplated the temples of Karnak, one of which spanned 100 times the area of the Parthenon of Athens. He visited the Colossi of Memnon, two enormous statues of Pharaoh Amenhotep III, and climbed by torchlight into the tombs of the Valley of the Kings. His final stop, nearly 550 miles upriver from Cairo, was the haunting Elephantine island in the Cataracts of Aswan.

Herodotus’ account of the journey—which takes up a major portion of his groundbreaking The Histories and brims with tales of ghoulish mummies and temples devoted to jackal-headed gods—marked the start of the world’s enduring fascination with the Nile. His path along the fertile river valley also became fixed as the preferred sightseeing route. In subsequent years, travelers arrived with the scrolls of Herodotus tucked underarm to follow in his footsteps.

The trickle became a flood in the first two centuries A.D., when Egypt became part of the Roman Empire and an incipient tourism industry was born. A millennium and a half later, the same route was followed by Napoleon’s savants, whose romantic drawings of sand-swathed antiquities inspired a passion for all things Egypt in the early 1800s. It was echoed in a nine-month tour by a louche 27-year-old Gustave Flaubert in 1850, and in the exploits of eccentric Victorian archaeologists, who scoured the deserts like grave robbers. It was followed by Agatha Christie on her first visit in 1910—and then by her fictional characters in the company of Hercule Poirot.

By the time Christie’s Death on the Nile was published in 1937, the world had already succumbed to an extreme bout of Egyptomania after the discovery of Tutankhamun’s tomb by the British archaeologist Howard Carter. Hollywood and New York high society in the 1920s became obsessed with pharaonic style, mimicking its architecture and fashions—scarab brooches, serpent belts and hieroglyphic bracelets—while dancing to novelty songs like “Cleopatra Had a Jazz Band,” or “Old King Tut.”

The year 2022 is a big one for Egyptologists. Carter’s discovery of King Tut’s tomb marks its centennial on November 4. It’s also the 200th anniversary of the decipherment of hieroglyphics, which the French scholar Jean-François Champollion achieved in 1822 by comparing the Rosetta Stone’s trilingual inscriptions.

It’s not unusual for today’s travelers to unconsciously mimic the rituals of earlier sightseers—gazing at Egypt’s wonders with the same dreamlike sense of awe—but the way the ancient monuments are visited today has evolved. Much of this owes to a spate of museums that opened during the pandemic, including the National Museum of Egyptian Civilization in Cairo, where royal mummies are housed in subterranean splendor. The most anticipated attraction is the Grand Egyptian Museum (GEM), a massive, postmodern facility under construction near the pyramids at an estimated cost of USD 1 billion. When completed, it will display such wonders as the repaired Colossus of Ramses II (the pharaoh of the Bible), the obelisks of Tanis and galleries housing more than 250000 other objects. The hope had been that the long-delayed opening would coincide with the anniversary of Tutankhamun’s excavation this fall, when festivities are planned in Luxor, including the debut of the restored Howard Carter House.

Meanwhile, a series of archaeological discoveries have been announced over the past two years, the most spectacular from Saqqara, an ancient city on the outskirts of Cairo, where excavators found 250 exquisitely decorated sarcophagi; and near Luxor, where a “lost golden city” was unearthed in 2021.

During my first visit to Egypt two decades ago, I spent four weeks wandering the Nile to research a book about tourists from ancient Rome. In Cairo, I stayed at the Windsor Hotel, a former British officers’ club from World War I with a bar that seemed like a haunt for nonagenarian war criminals and their Peter Lorre–like bodyguards. I visited antiquities kept in the city’s decrepit Victorian-era Egyptian Museum, which glowered from behind a black iron fence like the House of Usher. Inside, I met Nasry Iskander, chief curator of royal mummies, who allowed me to touch the 3,500-year-old Pharaoh Thutmose III, “the Napoleon of Ancient Egypt,” whose unwrapped corpse was lying on a slab.

“In my estimation, we’ve only found about 30 % of Egyptian monuments. Seventy % are still buried under the ground.” — Zahi Hawass

A lot has happened in the intervening years. Egypt underwent a revolution during the Arab Spring in 2011, when massive pro-democracy protests at Cairo’s Tahrir Square forced the dictatorial President Hosni Mubarak to resign. After a short period of calm following elections, more protests in 2013 led to a military coup and a brutal crackdown, eventually leaving Egypt in the hands of the armed forces under the repressive rule of Abdel Fattah Al Sisi —and arguably with a worse human rights situation today than before the revolution.

Tourism, battered in the wake of the violence, had recovered to 13 million annual visitors by 2019, and then the pandemic hit. Visitors from Russia and Ukraine (which together accounted for more than two million arrivals last year) largely evaporated in early 2022. And yet the travel industry has proved resilient, with the first half of this year seeing a significant uptick in tourists—a testament to the fact that when conditions are favorable, travelers will always come to the Nile.

Cairo’s sprawling suburbia extends almost to the base of the Giza Plateau, creating a haphazard wall of apartment blocks, advertising signs and concrete highways. Such distractions were quickly forgotten as the Uber driver who picked me up at the airport when I visited this spring crept along Sharia el-Ahram, “Pyramid Road.” Nothing takes away from the sheer wonder of laying eyes on the pyramids. Still Egypt’s star attraction, they are as breathtaking today as when the Great Pyramid was named first among the Seven Wonders of the World, a prototype of all subsequent “best of” lists compiled by a Greek scholar in the third century B.C.

After dark, I trekked toward the base of the floodlit Great Pyramid to attend Egypt’s Entrepreneur Awards, an annual black-tie extravaganza. I’d been invited by Amr Badr, a Cairo-based director for the luxury tour operator Abercrombie & Kent, who was there to present awards to three honorees, including Eco Nubia, an eco-lodge in Aswan. Badr explained that Egyptian travel is nothing like it once was. “When I started, we sold the Egypt package: a hotel room with full board, tours, a Nile cruise,” he said. “Whatever you once did in Egypt, it’s done differently now. You can skydive at the pyramids, go ballooning at Luxor, have a five-star dinner sailing on a felucca on the Nile. You really would not have imagined that in Egypt 20 years ago.”

The next day I awoke at the Marriott Mena House Hotel (whose original guesthouse next to the pyramids, dating back to 1887, has been expanded and modernized) early enough to get to the monuments before anyone else arrived. In the cool morning air I made a beeline for the Great Pyramid, which can be entered via the grave robbers’ route: a rough-hewn crevice that connects to the original pyramid-builders’ tunnel, a shallow shaft that rises at a 45-degree angle for about 100 yards and much of which can be ascended only at a crouch. The air inside was thick and pungent. Heart pounding, I crept under the last, 3-foot-high passage into Khufu’s burial chamber, where the worn stone remains of his sarcophagus stood in a corner.

Back into the sunlight and the rising heat of the day, I moved on to the Sphinx. Little has changed since A.D. 55, when a Roman viceroy ordered the sands around the monument cleared to improve visitor access, and professional stonecutters inscribed poems on its paws. Among the surviving verses: The Sphinx is a wonder / A heavenly vision / Gaze upon her shape / This sacred apparition.

The Giza complex hasn’t always been considered sacred. In the Middle Ages, Arab conquerors stripped the pyramids of their limestone to build Cairo, leaving the distinctive step formation we see today. Only the cap at the apex of Khufu’s pyramid hints at its original magnificence. The plateau will change again later this year when the long-awaited Grand Egyptian Museum opens.

“Whatever you once did in Egypt, it’s done differently now. You can skydive at the pyramids, go ballooning at Luxor, have a five-star dinner sailing on a felucca on the Nile.” — Amr Badr

“In a way, GEM is a modern pyramid,” said Khaled El-Enany, Egypt’s minister of tourism and antiquities, when I met him at his Cairo office. “It has a vast scale, is being built using the latest technology and houses amazing artifacts that have never been seen.” In 2019, El-Enany, a trained Egyptologist, became the first person to run the combined tourism and antiquities ministries, a recognition that the two have become synonymous in Egypt. The GEM will be a centerpiece for a redesign of the whole plateau, El-Enany said, including a Sphinx International Airport, where foreign travellers can arrive directly; his dream, he said, is to link it to the Red Sea diving resorts by high-speed rail.

The following day I basked in the glories of the Nile—not from the deck of a luxury barge but from its modern equivalent, a balcony at the Four Seasons Hotel Cairo. The serene hotel provided a refuge from the spectacular chaos of the Egyptian capital, where drivers have elevated the use of the car horn to an art form that at times resembles an abstract symphony. Nearly every street hides an alleyway with a seductive teahouse or an antiques store crowded with Greek statuary, Victorian cutlery or enormous French mirrors. The entire city seems covered in a thin veil of dust and sand; on the positive side, the hazy conditions create extravagant sunsets.

As in the rest of Egypt, Cairo’s archaeological work gained pace during the global shutdown of 2020. “I hardly heard about the pandemic,” said Mostafa Waziry, the secretary-general of the Supreme Council of Antiquities of Egypt. Waziry presides over his department from behind a massive wooden desk framed by gilded statues. “I understood there was something happening out there somewhere, but we have never been so busy as in the last two years.” He reeled off a dizzying list of new digs, museum openings and restoration projects. “You would need three months to see all the new discoveries in Egypt,” he roared, thumping the table with his hand. “Frankly, we’re exhausted!”

The next morning, one of Waziry’s staff, Atef El-Dabbah, director of the technical office, gave me a tour. Hopping into a car, we sped to a medieval aqueduct called Magra El Oyoun, slated to open in January 2023. “Napoleon repaired this,” El-Dabbah noted casually of a defence wall as we passed.

Next came the Ben Ezra Synagogue, built near where the basket of the prophet Moses is believed to have been found in the bulrushes in Coptic Cairo. Most of Egypt’s Jewish residents fled in the 1950s due to the economic disorder under President Gamal Abdel Nasser, explained the site’s archaeologist, Bahaa Sobhy. “I am Christian, but we love Jewish, we love Muslim; we are all under the one God,” he said.

El-Dabbah was reluctant to stop at the Great Mosque of Muhammad Ali Pasha that crowns the Cairo Citadel. “It was finished in 1848, which for us is like yesterday,” he sniffed. “We call it the New Mosque.”

The antiquities department has been transformed, Waziry explained, by hiring local staff rather than the European and American teams that have dominated since Napoleon’s envoys arrived 220 years ago. “I decided to hire Egyptians who would work for 11 months of the year instead of relying on the foreign missions who work for two months a year,” Waziry said. When he took over in 2017, there were only three Egyptian missions, he said. Now there are nearly 50.

“The talk is all about the pyramids and replicas of pharaonic artworks. We don’t want to be nostalgic. It’s a living culture.” — Karim Mekhtigian

According to El-Enany, the change has been paralleled by an increased fascination with archaeology among Egyptians. Three years ago, the majority of museumgoers were foreign. “Cairo used to be 80 % tourists, 20 local. Now it’s 60/40. Something is changing,” he mused, and went on to credit the new interest to the Pharaohs’ Golden Parade of royal mummies. On April 3, 2021, the remains of 18 pharaohs and four queens were transferred across Cairo in a lavish night-time procession. Each was placed in an oxygen-free nitrogen capsule and transported in a customised gilded carriage. Escorted by horse-drawn chariots, the mummies were taken to a new home three miles away in the National Museum of Egyptian Civilization, where they were greeted by a 21-gun salute before President Al Sisi. Although the limited number of spectators allowed to view the parade live were kept at a safe distance, the televised broadcast reached millions. In November 2021, a similarly grandiose display reopened the restored 250-foot-wide Avenue of Sphinxes in Luxor.

“For the first time, many Egyptians felt pride in belonging to a great civilization,” said El-Enany. The ministry has capitalized on this by reducing museum fees for Egyptians and encouraging exhibitions that make the ancient past relevant to younger audiences.

The public interest deepens with each new archaeological discovery. “In my estimation, we’ve only found about 30 % of Egyptian monuments,” said Zahi Hawass when I met him at his office in Cairo. “Seventy % are still buried under the ground.” Hawass was reveling in the filming of a recent Discovery Channel documentary about his excavation of the so-called “lost golden city,” Aten; he’d also been shooting a Netflix special about his life’s work. Archaeology, he said, is a reliable economic engine: “Every discovery is free publicity for Egypt.”

When I first met Hawass 22 years ago, he was wrestling with the fate of the royal mummies and suggested that they should be reburied to hide them from morbid gawkers. “When I was young, I gave a tour of the Egyptian Museum to Princess Margaret,” he recounted. “When she saw Ramses II, she closed her eyes and ran out. She told me, ‘I cannot stand to look at the face of a dead human being.’ It affected me deeply. I realized that we shouldn’t show the mummies for a thrill, but for education.”

He supported building the National Museum of Egyptian Civilization—a slablike edifice with sunlight ricocheting off its exterior—as a worthy resting place. Steps lead down to a central chamber where the pharaohs and queens are laid out in an air of hushed reverence as visitors file by in near-darkness. Still, the mausoleum is not without grisly elements. One display shows a CT scan of a pharaoh’s intestines, “suggesting that the body was decomposing at the time of mummification.” A handwritten tag on Queen Nefertiti’s toe looks a lot like something you’d see on a corpse in a city morgue.

The modern fascination with the Egyptian cult of the dead seems no less intense than it was for ancient Romans, who visited embalming shops where priests removed brains and organs and preserved the flesh in a 10-week process. A Nile cruise, a mainstay of any tour of Egypt, starts in Luxor, where the Mummification Museum caters to an obsession familiar to readers of horror novels about the pharaoh’s curse. At its most famous site, the Valley of the Kings, one can still see the graffiti scribbled by Romans among the colorful hieroglyphics of the royal tombs. (“Miravi! [I was amazed],” wrote one centurion. Not to be outdone, another added: “I was more than amazed!”

Enthroned by a nearby roadside are the two monolithic statues known as the Colossi of Memnon, considered by Romans the finest of all Egypt’s attractions for their miraculous powers. Today, we know they are twin images of Pharaoh Amenhotep III, but the Romans believed they were carvings of Memnon, a mythical Ethiopian hero killed at Troy. When the sun’s morning rays blasted across the valley, one statue would let out an eerie, high-pitched note, like the wail of an otherworldly instrument. This was almost certainly the sound of trapped air expanding and escaping from the stone, but the Romans were convinced that Memnon was calling out to his mother, Aurora, the goddess of the dawn. Sadly, this morning ballad ended when Roman engineers repaired the statue sometime in the third century A.D.

Cruising south, tour vessels now stop at the restored Temple of Khnum at Esna, whose vibrant frescoes were revealed earlier this year. The end of the line remains Aswan, a port edged by the First Cataract, white-water rapids where the Nile becomes unnavigable. It is still presided over by the Old Cataract Hotel (now a Sofitel), where Agatha Christie wrote Death on the Nile, gazing out at half-sunken boulders hunkering like pachyderms among the feluccas ferrying travelers back and forth.

My entire time in Egypt felt as if I’d been jumping erratically between past and present. These strands converged on my last day in Cairo, when I visited a young cultural anthropologist I’d met at Egypt’s Entrepreneur Awards, Marwa A. Sabah. Sabah is part of a venture called Alchemy, which she said “brings ancient Egyptian concepts and traditional craftsmanship into contemporary design.”

Alchemy’s sleek office is housed in the same building as a loft space owned by its founder, Karim Mekhtigian, a cosmopolitan figure who wore a top-buttoned polo shirt and designer glasses. In the workspace, Sabah led me past a dozen young Egyptians (whom Mekhtigian refers to as “the School”) poised over Apple computers into a showroom crowded with elegant handmade creations: plates carved from translucent alabaster, a polished bronze that echoed the shape of canopic vases used to house the organs of mummified pharaohs and an abstract statuette of the goddess Taweret.

“The physical use of objects brings them back into circulation,” Sabah said. “If you are surrounded by pieces inspired by pharaonic Egypt, their design becomes part of your life. You are living and breathing ancient culture.”

“In Egypt, people want you to be nostalgic all the time,” Mekhtigian added. “The talk is all about the pyramids and replicas of pharaonic artworks. We don’t want to be nostalgic. It’s a living culture. Why can’t we have our own icons today?” As we walked into a showroom called Life Lab, he waxed lyrical: “It’s an illusion that we are alive. Life is a passage.”

Before I left, Mekhtigian spoke of the company’s brainstorming sessions and reminded me that ancient Egyptians were advanced in science, astronomy, astrology and mathematics. “What if the pharaohs were sitting around the table with us over lunch?” he mused. “What would they say? What products would they use?”

With that, I plunged myself back into the sensory overload of Cairo’s streets—a daily battleground between Egypt’s past and present.


Here is the start of today’s last item:

Human Capital at work – The Value of Experience (Executive Summary June 2022)

About the McKinsey Global Institute

The McKinsey Global Institute (MGI), the business and economics research arm of McKinsey, was established in 1990 to develop a deeper understanding of the evolving global economy. MGI’s mission is to provide leaders in the commercial, public, and social sectors with the facts and insights on which to base management and policy decisions.

MGI research combines the disciplines of economics and management, employing the analytical tools of economics with the insights of business leaders. Our “micro-to- macro” methodology examines microeconomic industry trends to better understand the broad macroeconomic forces affecting business strategy and public policy.

MGI’s in-depth reports have covered more than 20 countries and 30 industries.

Current research focuses on seven themes: growth and competition; labor markets and work; financial markets and investment; consumers, behavior, and health; resources and sustainability; technology and innovation; and society and institutions.

For further information about MGI and to download reports, please visit


About McKinsey’s People & Organizational Performance Practice

McKinsey’s People & Organizational Performance Practice equips people and organizations to unleash sustained performance. In a time of significant change in the workplace, companies need the ability to transform again and again, with success relying on their most critical resource: their people. From the employee value proposition to the operating model, every part of the organization needs to enable talent and drive momentum. We help companies architect an organization and make the best of their people so they can realize their strategy today and sustain performance in the future.

Find out more at and-organisational-performance/how-we-help-clients


Human capital underpins economies and organizations, but it belongs first and foremost to the individual. It represents the collective knowledge, attributes, skills, experience, and health of the workforce—and also the potential residing within each person. The realization of that potential is a complex equation that has engaged economists, social scientists, and other academics for decades.

Today, the combination of pandemic-related disruptions, labor shortages, and ongoing technological change in the workplace has given this timeless topic new immediacy. Many business leaders are refocusing on how to evaluate and attract talent, how to retain valued employees, and how to develop the skills that will be needed to compete in the future. These questions come at a time when millions of workers are reassessing what they want to get out of work every day and whether they are on a fulfilling career path for the long term.

While a great deal of research on human capital focuses on the crucial periods of early childhood development and education, we consider what happens after people enter the workforce—specifically, how work experience and the acquisition of skills pay off for the individual. Our research takes a decidedly micro lens to this issue. We use longitudinal data to trace actual career trajectories, looking at the specific bundles of skills required in each role someone held over time and how moving into new roles affects their earnings.

Our findings underscore the role of organizations in realizing and augmenting the value of human capital—and continuously boosting the pool of skills across entire economies. This raises large questions for business leaders. Since work experience builds human capital (as measured by lifetime earnings), can organizations develop their employees in a way that equips them to outperform the norm? How can they create conditions that widen career options and help to make upward mobility a reality for many more people?

This research was jointly undertaken by the McKinsey Global Institute and McKinsey’s People & Organizational Performance Practice. It was led by Anu Madgavkar, an MGI partner based in New Jersey; Bill Schaninger, a McKinsey senior partner based in Philadelphia; Sven Smit, MGI’s chair, based in Amsterdam; Jonathan Woetzel, an MGI director based in Shanghai; Hamid Samandari, a McKinsey senior partner based in New York; Davis Carlin, a McKinsey partner based in New York; and Jeongmin Seong, an MGI partner based in Shanghai. Kanmani Chockalingam, an engagement manager in Bengaluru, led the working team, which comprised Afreen Ahmed, Rishi Arora, Gabriela Campos, Edouard de La Batie, Ana Carolina Leonardi, Elina Mäkelä, David Pappano, Daniel Soto, Soyoko Umeno, Sarah Varghese, and Susan Yu. Sirui Wang, a PhD fellow in McKinsey’s People & Organizational Performance Practice and doctoral candidate at the University of Pennsylvania, led the research modeling. Gurneet Singh Dandona, Alok Singh, and Juhi Daga supported our modeling and analysis.

We are grateful to the academic advisers who challenged our thinking and added new insights: Christopher Pissarides, Nobel laureate and Regius Professor of Economics at the London School of Economics and Political Science; Michael Spence, Nobel laureate and Philip H. Knight Professor of Management, Emeritus, and dean, emeritus, at the Stanford Graduate School of Business; Matthew Slaughter, Paul Danos Dean and Earl C. Daum 1924 Professor of International Business at the Tuck School of Business, Dartmouth College; Martin Baily, senior fellow in economic studies at the Brookings Institution; and Rakesh Mohan, president and distinguished fellow at the Centre for Social and Economic Progress. We also thank Ekkehard Ernst, chief macroeconomist at the International Labour Organisation, and Nicholas Bloom, William D. Eberle Professor of Economics at Stanford University, for kindly sharing their insights.

In brief

Human capital at work: The value of experience

Human capital—the knowledge, attributes, skills, experience, and health of the workforce—evolves from childhood through education and work. By our estimates, its value represents roughly two-thirds of an individual’s total wealth. Our research traces how people accumulate human capital throughout their working lives, focusing on the role of experience. We analyse four million de-identified online professional profiles in the United States, Germany, the United Kingdom, and India, examining career trajectories and skill requirements across roles.

We find that taking on new roles with expanded skills is central to upward mobility, particularly for those who lack formal credentials. Employers are critical engines of mobility, creating the opportunities for bold moves that can lift workers and themselves.

Work experience accounts for about half of the average person’s accumulated human capital.

The value of human capital can be approximated as lifetime earnings. We attribute a proportion of this value to experience based on role moves and skill distances observed over a person’s work history and their expected future wage growth. We find that skills acquired or demonstrated through work experience contribute an average of 46 % of lifetime earnings on average. We note, however, that our dataset does not capture enablers and life experiences prior to and during an individual’s career; these factors also influence the accumulation of skills in important ways.

The “experience effect” generally matters more for workers with less education. Work experience contributes 40 to 43 % of average, lifetime earnings in the United States, Germany, and the United Kingdom but 58 % in India, where fewer people have higher education. In general, people without college degrees who start in low-wage jobs are more reliant on work experience. It contributes 65 to 75 % of lifetime earnings for those who begin as tile setters or counter workers in the United States, for example, compared with 35 % for physicians or lawyers.

Role moves enable individuals to accumulate skills and work

experience. Workers in our sample switched roles every two to four years on average, depending on the country. With each role change after a first job, we isolate the share of distinct skills required in the new role to determine the “skill distance” of the move. The median skill distance per role move is 25 % or more. Four out of five people started in one occupation and ended in another. Significantly, more than 80 % of role moves involved joining new organisations.

Role moves can pay off, and bolder moves can deliver bigger boosts. In our sample, roughly a third of US, German, and UK workers, and almost a quarter of Indian workers, are on a path to move up one or more quintile in estimated lifetime earnings from their career starting points. Skills derived through experience account for 60 to 80 % of lifetime earnings for those who move up but only 35 to 55 % for those who stay flat or drop down. Those who move up changed roles more frequently and made bolder moves. Upwardly mobile cohorts in the United States and India made moves with an average skill distance of 30 to 40 %; those who stayed flat averaged only 20 to 30 %. Bold moves involve employers hiring people with less proven skills and workers pursuing opportunities that represent a stretch.

“Experience seekers” and “early movers” successfully harness this dynamic. Within our sample, individuals follow distinct career patterns. Experience seekers start with lower-than-average wages but make more moves and stretch their capabilities substantially each time; the cumulative effect gives them stronger wage growth than any other cohort. Early movers make big moves only early in their careers. For both groups in the advanced economies we studied, experience accounts for 60 to 70 % of lifetime earnings. That share is only about 30 % for lock- ins, who make only incremental moves.

Individuals get a lift from early experience in effective organisations. Controlling for differences in occupation, time spent early in a career with an effective organization explains half of the variation in experience- linked earnings. These employers not only have better overall organizational health, but also devote more time to training and offer more internal advancement—and their employees are more likely to be upwardly mobile.

Employers can attract and retain the best talent by focusing on three priorities. First, evaluate current employees and candidates not only for their knowledge and skills but also for their potential and capacity to learn. Second, embrace mobility by considering candidates with different backgrounds and histories, and by creating both upward and lateral career paths within the organization so that employees can gain more varied experience. When talented people leave, celebrate their success and stay open to welcoming them back. Third, strengthen coaching and on-the-job training, particularly early

in an employee’s tenure and whenever someone changes roles. Companies that establish themselves as great learning organisations are magnets for talent.

Executive summary

The most important resource in any economy or organization is its human capital—that is, the collective knowledge, attributes, skills, experience, and health of the workforce. While human capital development starts in early childhood and continues through formal education, our research focuses on the next stage, which spans the full working life.

Human capital is much more than a macroeconomic abstraction. Each person has a unique, living, breathing set of capabilities. They belong to the individual, who decides where to put them to work. The degree of choice is not limitless, of course. People are the products of geography, family, and education; their starting points matter. Having career options also depends on an individual’s abilities and attributes, their networks, their family obligations, the health of the broader labor market, and societal factors. While we recognise these constraints, career moves are nevertheless an important mechanism for expanding skills and increasing earnings.

At a moment when many workers are exercising greater self-determination in the job market, exploring mobility is particularly timely. To do this, we analyze a data set of de-identified job histories for approximately four million workers across the United States, Germany, the United Kingdom, and India.

The patterns within our data set show that moving into a new role pays off—and even more so when someone lands a new position that stretches their capabilities or better utilizes their skills. For people who start out in low-paying positions, movement is critical to boosting their lifetime earnings. Without extraordinary capabilities and luck, the entry-level retail cashier is unlikely to ever catch up to what the entry-level law associate can expect to earn over a lifetime. But if she is able to make strategic role moves, it is possible for her to climb into a higher earnings bracket than where she started.

In our data sample, roughly a third of US, German, and UK workers, and almost a quarter of Indian workers, are on a path to move up one or more quintiles in estimated lifetime earnings from their career starting points. This upwardly mobile group stands out for making more frequent and bolder role moves.

However, individuals cannot make bold moves unless an employer sees their potential and takes a chance on them in hiring. The most effective way for an individual to maximize the “experience effect” is to join an organisation that prioritizes and strengthens their development.

Work experience adds to the value of human capital

Formal education is an important driver of an individual’s lifetime earnings, which can be used as a proxyto measure the value of human capital.1 Yet learning continues throughout a working life. Organisations set up their working environments with systems and practices that help employees become more productive. When people enter these settings, value I created. In addition to earning wages, workers gain knowledge and new capabilities that they carry with them for the remainder of their careers. Many roles require employees to become proficient with new types of software or equipment. Employees benefit from structured learning programs and daily coaching on the job. There are insights to be gained from watching colleagues handle tricky situations gracefully (or not) and seeing how managers motivate their teams (or do not).

Someone who starts out taking orders in a fast-food restaurant learns the art of handling difficult customers and staying cool under pressure. Someone who starts in IT by answering questions on a help desk absorbs technical knowledge that they continue to use when they become a network administrator. An inventory clerk who watches his manager solve logistical logjams can apply those approaches in a future role as a warehouse manager or procurement agent.


  • Jacob Mincer found that an additional year of education adds more to an individual’s lifetime earnings than experience. Returns to schooling follow a linear curve, showing a consistent increase in earnings with each year of additional education, while returns to experience follow a quadratic curve. See “Investment in human capital and personal income distribution,” Journal of Political Economy, volume 66, number 4, 1958. The changing wealth of nations 2018: Building a sustainable future, World Bank, 2018, similarly uses lifetime earnings to measure human capital.

Our research focuses on how work experience builds on the foundation of formal education and adds to the value of human capital, expressed as lifetime earnings (see Box E1, “Modeling the link between role moves and the addition of skills to lifetime earnings”). We define work experience holistically as the accumulated knowledge that individuals gain by being in the labor market. This can occur through doing the work itself, formal employer-provided learning and development programs, and job changes that better match someone’s existing skills or enable them to add new skills.

Modelling the link between role moves and the addition of skills to lifetime earnings

We track the new skills associated with role changes and make assumptions about how the salaries for each role link to new versus entry-level skills.

We do this over the course of each individual’s work history to estimate the share of their lifetime earnings that can be attributed to skills gained through work experience.1

We use a detailed data set covering all of the job moves made by about a million workers in each of four focus countries: the United States, Germany, the United Kingdom, and India. We look at each individual’s career trajectory, starting with the first job listed after the latest educational degree obtained and including all role moves made over the observed work history. For each role change, we quantify the “skill distance,” or the share of new or nonoverlapping skills associated with the new job. This reflects someone’s opportunity to acquire or deploy additional skills in the new role.2 The illustrative example in Exhibit E1 shows a German worker who started as a welder. He changed jobs twice, moving a skill distance of 33 % when becoming a maintenance supervisor and then 47 % when becoming a production manager. His average skill distance is therefore 40 %, which is representative of the typical German worker.

We measure outcomes by looking at lifetime earnings, estimated as the sum total of nominal salaries received over a 30-year working life. This combines salaries associated with roles during an individual’s observed work history plus projections for the remaining years of that person’s working life.

We attribute the entirety of the entry-level salary to entry-level skills. Then, throughout the observed work history, we attribute a share of each new role’s salary to work experience in proportion to the share of new or nonoverlapping skills that role introduces, relative to entry-level skills. We make this assumption because work experience is one of the main mechanisms through which individuals are able to acquire and deploy new skills after formal education. Although we acknowledge that education and personal attributes have an enduring impact, including teaching someone how to learn, we make a simplifying assumption in the attribution of salary to capture the scope and direction of the experience effect. For the length of time someone stays in a given role, we attribute standard yearly salary increases to work experience. We make this assumption to capture the effect of deepening existing skills.

Similarly, to calculate projected earnings beyond the work history, we apply historical rates of wage growth to the final observed role, attributing all future projected wage growth to work experience. We assume no additional role moves.

Finally, we pool results for all workers in each of our four focus countries, reweighting the sample to reflect workforce composition, and consider the implications for the average lifetime earnings of a typical worker in the workforce.3


1 tax transfers.

2 We identify skills for each role from job postings, weighted by skill frequency, which gives more weight to skills that are specialized to a particular role rather than common across roles. When someone makes a role move, we measure skill distance as the share of nonoverlapping skills between the two roles.

3 For further details, see the technical appendix.


Work experience contributes 40 to 60 % of a worker’s human capital

By our estimates, the value of human capital represents roughly two-thirds of an individual’s total wealth.2 Our results show that skills acquired or deployed through work experience contribute an average of 46 % of the value of human capital over a typical working life. However, this is an average for the four focus countries, and it contains a wide range of variations (Exhibit E2).

The experience effect looks strikingly similar across the advanced economies we studied. Our analysis finds that work experience contributes 40 % of the average individual’s lifetime earnings in the United States, and 43 % in both Germany and the United Kingdom.


2  The value of human capital is measured as the present value of all future earnings for the average individual in our sample. To measure its contribution to total wealth, we draw on MGI’s 2021 report The rise and rise of the global balance sheet, which estimates average net worth per capita. Other estimates by the World Bank conclude that human capital wealth accounts for roughly two-thirds of global wealth (as much as 70 % in high-income OECD countries). See The changing wealth of nations 2018: Building a sustainable future, World Bank, 2018.

By contrast, work experience contributes 58 % of average lifetime earnings in India.3 Access to education remains a key challenge in India—and with only 12 % of the population having tertiary education as of 2020, work experience will be a more important driver of income for the workforce as a whole by default.4 In other emerging economies that have similarly low levels of educational attainment plus high productivity and wage growth from a low baseline, lifetime earnings are likely to exhibit similar patterns.

Work experience is a bigger determinant for people who start in occupations without significant credentialing barriers

People who start out in occupations with higher educational and credentialing barriers (such as lawyers and dentists) earn more than other workers over their lifetimes. For most of them, entry-level skills contribute a larger share of those earnings (Exhibit E3).

The reverse is generally true for people who start out in occupations with lower educational requirements. They typically earn less over a lifetime, with the greater share driven by work experience. The income growth of a dishwasher who becomes a food prep cook, then a line cook, and eventually a sous chef is almost entirely fueled by techniques and tricks of the trade learned on the job. In addition to enabling someone to acquire skills, work experience gives that person a track record, which is valuable in and of itself for the signal it sends to potential future employers.

In the United States, for example, the size of the experience effect varies substantially across starting occupations. At the low end are chiropractors. Before treating patients, they must complete a doctor of chiropractic degree program that can take three to five years, then pass a series of licensing exams. Their entry-level skills account for 85 % of their lifetime earnings. At the other end of the spectrum are food batchmakers, who operate equipment that blends ingredients for manufacture. People who start in this type of factory job are less likely to have higher education; the experience they amass over time determines 90 % of their lifetime earnings. Exhibit E4 shows how this pattern plays out in a number of other occupations.

While greater educational attainment generally correlates to higher lifetime earnings, some people defy the odds

Someone who attended poor-quality schools and lacks any postsecondary education or training is starting from behind in the labor market. Many employers rely on college degrees as a well-established signal of a candidate’s employability.5

Yet educational disadvantage does not have to lock in destiny—at least not for everyone. In the United States, for example, our lifetime earnings projections show a subset of people who overcome the odds. Of particular note, 28 % of high school graduates have higher earnings potential than the median holders of associate degrees, and 37 % of associate degree holders could earn more than median bachelor’s degree holders over their lifetimes.

In all the countries we studied, a sizable cohort is on a path to move up one or more earning quintiles from their career starting point. As Exhibit E5 (found later in the Executive Summary) illustrates, this applies to 30 % of workers in the United States.6 In fact, 6.1 % of US workers are on track to move from the bottom lifetime earnings quintile all the way to the top. Similar shares are upwardly mobile in the other advanced economies we studied (32 % in Germany and 34 % in the United Kingdom). In India, 23 % of workers are on a path to move into higher earnings brackets, million US children and found that 36.7 % moved into a higher income quintile than their parents, with 7.5 % moving from the bottom to the top quintile of earnings. See Raj Chetty et al., “Where is the land of opportunity? The geography of intergenerational mobility in the United States,” The Quarterly Journal of Economics, volume 129, number 4, 2014.


3 In India, faster nominal wage growth results in a greater lift to lifetime earnings than in the advanced economies we studied. Our analysis focuses on the proportion of lifetime earnings attributable to entry-level skills versus experience, rather than the absolute growth in wages, making the estimates comparable across countries.

4  Organisation for Economic Co-operation and Development (OECD).

5  Michael Spence, “Job market signaling,” Quarterly Journal of Economics, volume 87, number 3, August 1973.

6  Another longitudinal study on income mobility followed almost 10

The upwardly mobile group appears to be amassing work experience in an effective way that yields real benefits. In our worker sample, experience accounts for 60 to 80 % of lifetime earnings for the cohort that moved up but only 35 to 55 % for those who stayed flat or dropped down. However, many people are unable to make these leaps because of structural and social barriers, such as biases, the lasting effects of unequal education, and the lack of professional networks.


Bring new skills and can unlock higher earnings—and in most cases, people are moving to new organisations

Movement is an inherent feature of labor markets. Across the entire data set, the average person switched roles every two to four years, with a median skill distance of 25 to 45 %, depending on the country.7 This matters because role moves enable individuals to build or demonstrate their skills.

Moves can involve workers assuming new roles within their current company, moving to a different employer, changing specialties or occupations, or pursuing a combination of these strategies. At any given time, a significant proportion of role moves are triggered by firings and layoffs in addition to voluntary job changes.

In our data set, each move increased wages by 6 to 10 % on average. However, this includes people who moved into lower-paying roles, whether by choice or out of necessity.

Forty to 50 % of the role moves over the decade we observed involved pay increases. The workers who made these moves managed to boost their earnings by 30 to 45 % on average each time.

More than 80 % of the role moves observed in our data set involved someone leaving one employer for another. Far fewer moves involved people being promoted into more senior roles or branching into different specialisations within their existing organisations.8 This high level of external movement holds true across all cohorts. This seems to indicate that many employers do not have internal advancement tracks that are wide enough to keep most people growing and working toward higher rewards over time. Individuals who want to reinvent themselves and take on more senior roles often have to go to a new environment to do so.

The bolder the move, the bigger the boost

Those who take new roles involving bigger changes or challenges receive bigger rewards. We look at both wages and skill requirements associated with consecutive roles held by each individual. Salary-increasing moves involved a median skill distance of 35 to 50 % across countries, higher than the range of 25 to 45 % for all moves across countries.

In other words, when someone made a move for higher pay, their new job typically involved significant skills and responsibilities that were not part of their previous job. This kind of movement is enabled when an employer is willing to take a chance on someone’s potential, even if they have not been performing exactly the same tasks in their previous role. The new role may be a major learning opportunity, or it may be a better match that enables someone to deploy existing skills that they have not been utilizing.9 Incremental moves with largely overlapping requirements do not pack the same punch.


The most upwardly mobile cohorts in the sample make both frequent moves and bold moves (Exhibit E5).10 In the United States, for example, people who moved into higher earning quintiles averaged 4.6 moves during the observed period, while those who stayed flat averaged 3.7 moves. The upwardly mobile in the United States and India made moves with an average skill distance of 30 to 40 %; those who stayed flat averaged only 20 to 30 %. This growth in skills compounds with each move, resulting in a far bigger shift in capabilities and responsibilities over the entirety of a working life.


7  This is in line with the most recent (prepandemic) US Bureau of Labor Statistics (BLS) data, which show that US wage and salary workers had a median tenure with their current employer of 4.1 years in January 2020. See ted/2020/median-tenure-with-current-employer-was-4-point-1-years-in-january-2020.htm.

8 It is possible that self-reported data may not reflect the full number of internal moves. For example, an individual who receives their fifth promotion at a longtime employer may not bother to update their online professional profile but will do so when moving to a new employer.

9  Dale T. Mortensen and Christopher A. Pissarides, “Job creation and job destruction in the theory of unemployment,”

Review of Economic Studies, volume 61, number 3, 1994.

10 We describe moves involving high skill distances as “bold.” This term describes only the distinctiveness of the skill requirements in the new role; it is not a comment on the nature of the role itself or of the risk-taking involved in making the move. An incremental move is one in which skill distance is in the bottom quartile of the sample; a bolder move is one in the top quartile.

‘Experience seekers’ and ‘early movers’ boost their earnings through effective career moves

From our data set, we looked at a smaller universe of people with more than ten years of work history. Within it, four distinct archetypes emerge. They are not meant to convey individuals’ circumstances or motivation; they describe movement patterns and outcomes, with illustrative examples.

  • Experience seekers start with lower-than-average wages but propel themselves upward by moving roles more frequently than their peers and stretching their capabilities substantially each time. The cumulative effect gives them stronger wage growth than any other archetype. Consider someone who starts as an administrative assistant at one nonprofit before landing a job cultivating donors in the development department of another. From there, she joins a research hospital as a grant writer before stepping into a broader communications role. Eventually she becomes head of media relations for a major university. Our experience seeker has managed to cross over into new industries and
  • Early movers make bigger leaps in the first part of their Someone may start in one field, quickly realize that their passion lies elsewhere, and then get a break that enables them to follow it. A graphic designer who makes print ads, for example, might become a user-experience designer early in her career.
  • Late movers stay put or make more incremental moves in the early stage of their career but eventually take a bolder step. Think of a seasoned journalist who goes into corporate communications, or a real estate agent who becomes a mortgage loan officer in a bank. This is by far the largest group in the sample.
  • Lock-ins change jobs less frequently, and when they do move, they do not make dramatic changes. This is not necessarily because someone is timid or stuck; they could also follow this strategy because they pursued what suited them from the start. Teachers, for example, have invested in specialized education and may have found their calling. However, lock-ins have the slowest wage growth, whether they start near the bottom or near the top. Doctors start at a very high salary but do not tend to make many role moves. While work experience accounts for 60 to 70 % of lifetime earnings for experience seekers and early movers, that share is only about 30 % for lock-ins.

Employers can attract and retain talent by recognising potential, embracing mobility, and strengthening learning

Not all companies are equally good at developing people. Size is not the differentiator, as we find that small companies can be just as adept as their larger counterparts in this area. But companies with the strongest organisational health, those that offer more structured training for their employees, and those that provide more opportunities for internal advancement seem to stand out. People join these companies to build knowledge and networks, understanding that their experience will provide a valuable signal to other employers for the remainder of their careers. Early career experience at these companies helps employees go on to become more upwardly mobile (Exhibit E6).

Companies can help individuals build their experience capital and establish themselves as great learning organisations and magnets for talent in the process by focusing on three priorities:

  • Understand the potential in people as well as their current knowledge and skills. Most employers can benefit from challenging the status quo of how they select people for open roles. Instead of searching for “holy grail” external candidates whose prior experience precisely matches the responsibilities in an open role, leading organizations create systems for evaluating candidates based on their capacity to learn, their intrinsic capabilities, and their transferable skills. This requires designing assessments that are fit for purpose, focusing on the few core skills that matter for success in the role.

It also involves removing biases that pigeonhole people into the roles they are already performing; all role moves undertaken by individuals involved a skill distance of more than 25 %—and this implies that people often have latent capabilities that are not recognized by their current employers. If someone’s track record shows the acquisition of new skills over time, it probably means that person is capable this point is particularly important when it comes to existing employees. In our sample, more than half of of learning more. Employers should be less constrained about recruiting candidates from traditional sources and backgrounds, and more open to people who have taken unconventional career paths.

  • Embrace mobility. Within our data set, more than 80 % of all the role moves individuals made involved changing employers. Since there is no fighting the fact that talented people will move, the key for employers is becoming part of this flow. Employers can aim to beat the odds on both sides of this 80-20 dynamic. On one end, they can attract the best candidates among the big talent pool that is always searching. On the other, they can boost the productivity and engagement of valued employees who stay. To ensure that proven employees don’t have to go elsewhere to advance, organizations should set the expectation that part of a manager’s job is developing people who will go on to other things. Each role should have clear paths toward future roles, with skill requirements delineated at each stage. One way to do this in a large organization is to create an internal digital platform where employees can access learning modules and find their next opportunity. Mobility is experience, not just upward progression—and lateral movement is a neglected opportunity for many organizations. Designing rotational and transfer options for a broader pool of employees can keep proven midcareer workers learning and feeling energized. When talented employees do move on, celebrate them as success stories—and don’t close the door on welcoming them back in a different capacity in the future.
  • Strengthen coaching and emphasise the new or first manager’s role. A great deal of skills development happens day to day on the job, in a process that accumulates overtime and eventually accounts for almost half of all human capital over a working life, as our research suggests. Coaching and apprenticeship can maximize this effect. Our research suggests the first few years of a career are foundational, and the same is true for the first year in any new job. Formal onboarding is not just an orientation session but a six-month to one-year period that should involve a thoughtfully created journey. Organizations can provide the tools for a running start, including a manager committed to delivering coaching and facilitating connections. Even after hitting their stride, employees need ongoing opportunities to learn; this can pay off in the form of higher morale and reduced attrition.11 In a June 2021 Gallup survey, 65 % of US workers said that learning new skills is an extremely or very important factor in deciding whether to take a new job, and 61 % said it was extremely or very important in deciding whether to stay at their current job.12 Formal learning and development programs that prepare employees for future roles are part of this, but it is difficult to make them effective. Companies that are true learning organizations build their own formulas, customized to their needs.

Workers should choose their moves (and their employers) carefully

Since work experience creates value for the individual, how can someone maximize that effect? Controlling for differences in occupation, time spent early in a career with an effective organization (as defined by overall organizational health and greater emphasis on training and internal mobility) is associated with 50 % of the variation in how experience adds to earnings. The remainder of the difference is associated with the boldness and frequency of moves that a person makes.

The pandemic appears to have prompted many workers to reevaluate their jobs, and many have been voting with their feet. According to US Bureau of Labor Statistics data, some 47 million Americans quit their jobs in 2021. Millions have landed better jobs, and some became entrepreneurs.13 An increase in job switching has spread to other countries as well. Employers from Europe to China report labor shortages and hiring difficulties.14 Workers are in demand and taking advantage of new dynamism in the labor market.

While higher pay is obviously a motivation, particularly for people who have been struggling to make ends meet, many people are also looking for better working environments and flexibility. However, broader considerations determine whether a move will pay off in the longer term.

Our research shows that bold role moves have the potential to propel workers forward.

There are often constraints on the ability to make moves, of course. Not everyone has access to an effective organization. People may hit the limits of their capabilities or health, while others need to prioritize family responsibilities. During periods of high unemployment, the options are fewer and farther between. Yet individuals who have the luxury of choosing each job move strategically can benefit in a lasting way by looking for learning opportunities and growth potential. As playwright Tom Stoppard put it: “Look on every exit as being an entrance somewhere else.”


11 See, for example, Ann P. Bartel, “Measuring the employer’s return on investments in training: Evidence from the literature,” Industrial Relations: A Journal of Economy and Society, volume 39, number 3, 2000; and Anand Chopra-McGowan, “Make sure your company’s reskilling efforts pay off,” Harvard Business Review, July 2021.

12  The American upskilling study: Empowering workers for the jobs of tomorrow, Gallup and Amazon, 2021.

13 Josh Mitchell and Kathryn Dill, “Workers quit jobs in droves to become their own bosses,” Wall Street Journal, November 29, 2021.

14 Meng Ke and Yuk Li, “China needs 11.8M workers. Here’s how to close its labour gap,” World Economic Forum, July 2021; and Tina Weber et al., “Tackling labour shortages in EU member states,” European Foundation for the Improvement of Living and Working Conditions, July 2021.

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