Corporate location strategies are undergoing a significant transformation. While proximity to customers, market size and infrastructure once dominated decision-making, access to the right talent is increasingly becoming the defining factor.

According to the latest edition of the Savills IMPACTS report, nearly two-thirds of organisations are experiencing a decline in talent availability in their headquarters locations, rising to 73% within the technology sector. Low unemployment rates, ageing populations and intensifying competition for skilled professionals are prompting companies around the world to rethink both their geographic footprint and expansion strategies.

Rather than simply ranking cities from best to worst, the Savills Talent Cities Index examines the role cities play within the global talent ecosystem. The index evaluates locations across five key dimensions: talent availability, liveability, competition for talent, business resilience and cost advantage.

Based on these factors, the research identifies six distinct city archetypes.

The Global Business Leaders category includes major international hubs such as London, New York and Singapore, where corporate headquarters, investment networks and senior decision-makers are concentrated. Gateway Anchors, including cities such as Toronto and Madrid, combine strong regional talent pools with a more competitive cost base. Liveability Magnets are cities that attract and retain talent through a high quality of life and appealing urban environments. Emerging Innovation Engines, such as Bengaluru and Hyderabad, are rapidly developing centres of technology and innovation. Sector Clusters are specialised knowledge hubs built around specific industries, while Cost-Advantaged Talent Hubs offer access to skilled labour at comparatively lower operating costs.

One of the study’s most interesting findings is that cities with the deepest talent pools are often also among the most expensive places to live and do business. London, New York and Singapore remain critical nodes within the global economy, but rising labour costs, housing affordability challenges and intense competition for talent are creating increasing pressure for employers.

As a result, Savills argues that the future does not belong to a single-location model. Leading organisations continue to maintain a presence in major global business centres, while increasingly distributing growth, innovation and operational functions across locations that offer a better balance between talent availability, quality of life and cost efficiency.

Toronto is a strong example of this trend. Today, it is not only Canada’s leading business centre but also an increasingly important international technology hub. Bengaluru has evolved from an outsourcing destination into one of India’s primary innovation engines, while Manchester’s combination of strong universities, high liveability and competitive costs continues to attract growing interest from international occupiers.

The ESTON Perspective: Where Does Budapest Fit?

Although Budapest was not specifically included in the Savills Talent Cities Index, an interesting question is which city archetype best reflects the Hungarian capital’s current position.

In ESTON’s view, Budapest sits at the intersection of the Liveability Magnet and Cost-Advantaged Talent Hubcategories, while increasingly displaying characteristics associated with a Gateway Anchor.

One of Budapest’s greatest strengths is its ability to offer a highly educated workforce and an attractive quality of life at a cost level that remains competitive by European standards. The continued expansion of SSCs, BSCs, IT operations and business service centres demonstrates that multinational companies have successfully built and scaled their operations in the city for many years.

Budapest also benefits from a strong higher education ecosystem, extensive international connections and a strategic location that positions it as a natural gateway to Central and Eastern Europe.

At the same time, several challenges must be addressed for the city to strengthen its position further. Demographic trends, a limited pipeline of highly skilled labour and increasing competition from regional capitals such as Warsaw, Prague and Bucharest are all important factors. The ability to attract and retain international talent over the long term will also be critical in the years ahead.

Nevertheless, Budapest is starting from a position of strength. It is home to one of the region’s most mature office and business services markets while continuing to offer a compelling combination of cost competitiveness and quality of life.

Perhaps the most important message from the Savills research is that tomorrow’s most successful companies will not necessarily choose the same locations as their competitors. Increasingly, the focus is on finding the right location for the right talent. In this race, Budapest possesses many of the attributes required to evolve from a regional talent hub into a leading Central European business destination.

This article is based on “The Location Advantage”, published in the Savills IMPACTS report. The full analysis can be found on page 23 of the Savills IMPACTS publication.

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