"As the world of work rapidly changes, there is a danger that if countries and cities do not have the right conditions for attracting talent, people and businesses will move away and look for opportunities elsewhere," said Alain Dehaze, chief executive officer for Adecco Group.
New Zealand was also rated second highest for regulatory landscape, professional management, and sixth for business and labour landscape.
But it ranked 56th for gender earnings gap and 63rd for female graduates, its worst-performing area on the index.
By regional group, New Zealand placed second among 15 eastern and southeastern Asia and Oceania countries, trailing only Singapore, which ranked second overall on the main index.
New Zealand has risen six places since the first annual CTCI report in 2013.
Europe dominated the index for another year, with Switzerland retaining its number one spot and Norway (4), Denmark (5), Finland (6), Sweden (7), Netherlands (8), United Kingdom (9) and Luxembourg (10) all placing in the top 10.
"In the top 10 of talent competitiveness ranking, only two non-European countries can be seen — Singapore and the USA. This underlines that Europe remains a talent powerhouse, but also that countries with great universities and a strong education sector are best at attracting talents," said Bruno Lanvin, executive director, Global Indices, INSEAD, and co-editor of the report.
The US, placed third overall, is home to the top-ranked city in this year's report, with Washington DC, jumping five places to knock off Zurich (Switzerland).
Copenhagen (Denmark), Oslo (Norway), Vienna (Austria) and Zurich rounded out the top five cities respectively.
