New York is the lowest risk city in the world for recruiting, employing and relocating employees, according to rankings released today by Aon Hewitt, the global human resources business of Aon plc.
Aon Hewitt's 2012 People Risk Index measures the risks that organizations face with recruitment, employment and relocation in 131 cities worldwide by analyzing factors as demographics, access to education, talent development, employment practices and government regulations. According to the index, Toronto, Singapore, Montreal and London rounded out the top five lowest risk cities in the world. Conversely, Lagos, Nigeria; Addis Ababa, Ethiopia; Baghdad, Iraq; Sana'a, Yemen; and Damascus, Syria represent the least desirable of the 131 cities for employers.
"With increasing labor costs and continued economic volatility around the world, leaders of global organizations understand that talent management is crucial to the success of their business operations. To remain competitive, they are redesigning their talent sourcing strategies and shifting their operations to more advantageous locations," said Rick Payne, regional Talent and Rewards practice leader for Aon Hewitt in Asia Pacific. "Identifying locations and formulating a successful workforce planning strategy involves looking beyond cost. The Aon Hewitt People Risk Index helps companies adopt a systematic and holistic approach that compares and measures talent factors and risks by location."
The Five Lowest Risk Cities
The Aon Hewitt 2012 People Risk Index showed that New York edged out Toronto as the world's lowest risk city. New York ranked lowest in demographics risk based on its large working age population, positive immigration rate and high workforce productivity. New York's education and talent development risks also are among the lowest in the world. This can be attributed to world-class educational institutions and training facilities, and a large pool of qualified and experienced talent. However, the index showed that the city has higher employment risk than the other top five cities, mainly due to higher violence and crime rates, and higher health care and benefits liability risks.
Toronto and Montreal are among the five lowest risk cities primarily due to Canada's strict enforcement of equal opportunity laws, clear government-mandated health and retirement benefits, low levels of corruption, and the high quality and broad availability of training facilities. While Toronto has low employment and redeployment risk, the city's recruitment risks are higher than the other top five cities because of its relatively small working age population and lower immigration rates.
Singapore is the only city outside of Europe and North America that is among the five lowest risk cities, according to the index. Contributing to this rating are its strict laws on discrimination and occupational health and safety, flexibility on personnel costs, lack of corruption and willingness to work with the private sector on human resources related issues. Singapore also has low terrorism and political risks and strong government support.
"Government support strongly correlates with people risk," Payne added. "Cities with low risk typically have a government that is transparent, non-confrontational, deals with employment issues fairly and promotes education and talent development initiatives. Employers in these cities are less likely to be surprised by changes in government policies on employment, health care and retirement and they have better support in terms of workforce development."
Trends from the Highest Risk Cities
Cities on the People Risk Index with the highest risk for recruiting, employing and relocating employees are Lagos, Nigeria; Addis Ababa, Ethiopia; Baghdad, Iraq; Sana'a, Yemen; and Damascus, Syria.
Political turmoil and lack of stable governments substantially increase the people risks in these cities. The tumultuous landscape, especially in Middle-Eastern cities, impacts their ability to implement and enforce business-friendly employment practices and invest in talent development initiatives.
These cities also have significant risks in recruiting talent, as education systems are unable to keep up with demand, making it difficult for organizations to find sufficiently-skilled workers.
"Working age populations are expected to grow in many high risk cities over the next decade, which will expand the future labor pool and increase opportunities for organizations to recruit and redeploy talent," said Payne. "As this happens, we expect the demographic risks in these cities will improve over time."
To find out more about the 2012 People Risk Index, and to obtain a copy of the 2012 People Risk Index Ratings, please visit http://www.aonpeoplerisk.com
About Aon Hewitt's People Risk Index
The results of Aon Hewitt's People Risk Index are based on in-depth research conducted over a six-month period by the Aon Hewitt's Regional Talent & Rewards Analytics Center in Singapore. Data from more than 100 statistical sources provide the quantitative basis for the ratings, which were augmented by the assessment of Aon Hewitt's local and regional human resources experts from around the world.
The 131 cities were selected based on population size, rate of population growth, level of business investment and geographic spread among the cities covered.
Aon Hewitt's People Risk Index assigned ratings relative to risk for 30 qualitative and quantitative factors across five broad areas: Demographics; Education; Government Support; Talent Development; and Employment Practices. Each of the 30 factors has a scale from 1 (minimal risk) to 10 (extreme risk). Employment Practices area has 10 factors that are weighted by 50%. Thus, the overall ratings are from 25 to 250, where 25 is minimal or no risk and 250 is extreme risk.