Living costs and salaries play a big role in attracting talent, an effect bosses in Singapore and Hong Kong can attest to.
A fall in living expenses and higher pay in Singapore have given it a more competitive edge in recruitment this year while Hong Kong has slipped down the league table, owing to things being pricier and salary, lower.
Still, Hong Kong is ahead of Singapore, but the gap has narrowed. Falling three spots, Hong Kong sits in the 12th position while Singapore rose two notches to 13th place in the rankings compiled by Swiss business school IMD.
But the movements for both economies are statistically insignificant and could be accounted for by relative shifts in sentiment, said the director of the IMD World Competitiveness Centre, Dr Arturo Bris.
He noted quite a lot of negative sentiment in Singapore last year about its economic outlook. But he added: "The mood has improved this year."
Singapore's score in the "appeal" category also improved this year. It takes into account factors such as living cost, quality of life, remuneration of management and service professions, and personal safety.
The rankings are based on both historical data and surveys with thousands of executives from 63 economies.
These also look at two other categories of indicators.
One is readiness, which assesses an economy's ability to nurture skills among its people that match those needed by its economy.
The other is investment and development, which delve into, among other things, public spending on education, pupil-teacher ratios and health infrastructure.
The top three competitive countries for talent this year remain unchanged: Switzerland, Denmark and Belgium, in that order.
It is tough to compare economies, Dr Bris said, because each has a different policy towards talent.
Denmark, for instance, spends heavily on education - 7 per cent of its gross domestic product against Singapore's 2.9 per cent. The reason: with its focus on domestic talent, it does not need to rely on foreigners.
Economies such as Singapore and Hong Kong spend much less on education but they are more open and attractive to foreign talent.
The country with a "perfect combination" of the two models is Switzerland, he added.
Its education system prepares people to meet the economy's needs: technical education and innovative skills. "But for other jobs such as dentists, nurses and service professionals, they open up their borders to foreign talent," said Dr Bris.
CIMB Private Bank economist Song Seng Wun noted that striking such a balance will be a continuing challenge for Singapore.
As a tiny city-state where the local resident population growth is slowing, "the key challenge will be how we continue to nurture local residents while attracting new talent to ensure the overall demographics remain supportive of growth", he said.