People Risk Index helps organizations assess risks when hiring, employing and moving staff
CHICAGO, Sept. 27 /PRNewswire-Asia/ -- A first-of-its kind global study found Toronto to be the city with the lowest risk in the world to recruit, employ and relocate employees, according to Aon Consulting, the global benefits and human capital consulting business of Aon Corporation (NYSE: AON).
Aon Consulting's People Risk Index measured the risks that organizations face with recruitment, employment and relocation in 90 cities worldwide[1] by analyzing demographics, education, employment practices and government regulations. According to the Index, the five lowest risk cities for employers are Toronto, New York, Singapore, London and Montreal. On the opposite end of the ratings, locations such as Dhaka, Bangladesh; Phnom Penh, Cambodia; Lagos, Nigeria; Karachi, Pakistan; and Tehran, Iran, represent the least desirable of the 90 cities for employers. (See Table 2, for 10 lowest and highest risk cities).
"The new risk ratings come at an opportune time as assessing employment risk takes on heightened importance as of late, from controversy over Arizona's strict new anti-illegal immigration law to recent strikes in China," said Rick Payne, chief research officer of Aon Consulting's Global Research Center, based in Singapore. "As companies face these and other employment risks as well as take a close look at new investment opportunities in emerging markets, the ratings can help companies systematically and consistently assess the relative risks they face when hiring, employing and moving staff."
Sibling Rivalry in the Five Lowest Risk Cities
Montreal and Toronto are among the five lowest risk cities primarily due to Canada's low level of corruption; strict enforcement of equal opportunity laws; health and retirement benefits; and high quality and broad availability of training facilities. The main difference between the two is due to Toronto's larger population as well as quality and broader availability of training resources, according to Aon.
The results also found New York and London's favorable ratings to be attributable to world-class educational institutions and training facilities, and a large pool of qualified and experienced talent.
Singapore is the only city outside Europe and North America among the 10 lowest risk cities. Contributing to this rating is Singapore's 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.
"A significant factor influencing the People Risk Index is government support," Payne said. "Cities with low risk typically have a government that is transparent, non-confrontational, and deal with employment issues fairly. Employers in these cities are less likely to be surprised by changes in government policies on employment, health care, and retirement. Therefore, they have fewer issues finding and retaining educated and experienced talent. These employers also have more flexibility to restructure their operations without fear of incurring significant unanticipated costs."
Still, analysis of these low risk cities shows room for improvement. For example, Toronto is not No. 1 in any category, even though it ranked No. 1 overall. In fact, it is 14 in demographics and 12 in employment practices. New York, on the other hand, ranked No. 1 in education and 2 in talent development. And Singapore is No. 1 in government support but is ranked 41 in education. (See Table 3, for rankings by areas of risk)
"As the report indicates, even the lowest risk cities are not perfect," Payne said. "For instance, the talent pool in Toronto and Montreal is small compared to New York or Los Angeles, which increases the risk of recruiting for certain types of jobs such as highly specialized financial jobs and design/visual arts jobs. Additionally, in Singapore the inflow of foreign talent helps to increase its talent pool despite its small population, low birth rate and aging workforce."
Trends from the Highest Risk Cities
A common contributing factor of the five cities with the highest risk is an urbanization rate faster than its city can manage. Dhaka, for example, has an estimated 12 million people living in a city originally designed for a population of 1 million. Ratings for education factors such as low literacy, limited spending on education, and low enrollment in secondary and tertiary education also are significant reasons for the high scores among the 10 highest risk cities, according to the People Risk Index.
"The education system of an overcrowding city faces great challenges to cope with the fast growing urban population," Payne said. "In general, the lack of basic human capital infrastructure such as education systems and training resources, coupled with poor government support and a culture of bias and favoritism, contribute to the high people risk that we observe in these cities."
To obtain a copy of the 2010 People Risk Index Ratings, please visit http://www.aon.com/peoplerisk
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About Aon Consulting's People Risk Index
The results are based on in-depth research conducted over a six-month period by the Aon Consulting Global Research Center. Data from more than 100 statistical sources provide the quantitative basis for the ratings, which were augmented by the assessment of Aon Consulting's local and regional human resources experts from around the world.
The 90 cities were selected based on population size, rate of population growth, level of business investment and geographic spread among the cities covered.
Aon Consulting People Risk Index assigned ratings relative to risk for 25 qualitative and quantitative factors across five broad areas: Demographics; Education; Government Support; Talent Development; and Employment Practices. Each of the 25 factors has a scale from 1 (minimal risk) to 10 (extreme risk). Thus, the overall ratings are from 25 to 250, where 25 is minimal or no risk and 250 is extreme risk.
About Aon Consulting
Aon Consulting is among the top global human capital consulting firms, with more than 6,300 professionals in 229 offices worldwide. The firm works with organizations to improve business performance and shape the workplace of the future through employee benefits, talent management and rewards strategies and solutions. Aon Consulting was named the best employee benefit consulting firm by the readers of Business Insurance magazine in 2006, 2007, 2008 and 2009. For more information on Aon Consulting, please visit http://www.aon.com/human-capital-consulting.
About Aon
Aon Corporation (NYSE: AON) is the leading global provider of risk management services, insurance and reinsurance brokerage, and human capital consulting. Through its more than 36,000 colleagues worldwide, Aon delivers distinctive client value via innovative and effective risk management and workforce productivity solutions. Aon's industry-leading global resources and technical expertise are delivered locally through more than 500 offices in more than 120 countries. Named the world's best broker by Euromoney magazine's 2008, 2009 and 2010 Insurance Survey, Aon also ranked highest on Business Insurance's listing of the world's largest insurance brokers based on commercial retail, wholesale, reinsurance and personal lines brokerage revenues in 2008 and 2009. A.M. Best deemed Aon the number one insurance broker based on brokerage revenues in 2007, 2008 and 2009, and Aon was voted best insurance intermediary, best reinsurance intermediary and best employee benefits consulting firm in 2007, 2008 and 2009 by the readers of Business Insurance. Visit http://www.aon.com for more information on Aon and http://www.aon.com/unitedin2010 to learn about Aon's global partnership and shirt sponsorship with Manchester United.
Singapore People Risk Index Highlights
Singapore ranked as the third lowest risk city worldwide - tied with London - in the global ranking of 90 cities. The Lion City was the only city in Asia Pacific to make it into the 10 lowest risk cities. Tokyo rated the second lowest risk in Asia Pacific and was 12th in the global ranking. Melbourne, Sydney and Hong Kong completed the list of the five lowest risk cities in Asia Pacific.
Singapore ranked lowest risk worldwide in the area of government policies, which includes factors related to equal employment opportunity, rigidity of personnel costs, occupational health and safety regulations, government relations, and corruption. According to the People Risk Index Rating, companies operating in Singapore also face little risk in not being able to develop their people. The quality and depth of training resources means that companies can secure the training they need to develop and maintain high quality talent.
Low risk does not mean no risk
The primary risks cited by the Index that companies face in Singapore are related to its small population size, aging population and relatively high staff turnover rates. The ease of mobility and immigration helps offset the small size of the local talent pool; yet, staff resourcing still remains the number one people risk for companies in Singapore.
High income levels has enabled low risk cities like Singapore, Hong Kong and Tokyo to reduce their overall people risk with more investment in human capital development and infrastructures. However, economic resources alone may not be sufficient to differentiate the levels of people risk, in particular among the high income cities.
Table 1: 2010 Asia Pacific People Risk Rating – Highest and Lowest Risk Cities
Global Rank |
City | Rating (25 – 250) |
3 | Singapore | 74 |
12 | Tokyo | 82 |
15 | Melbourne | 84 |
16 | Sydney | 85 |
16 | Hong Kong | 85 |
|
|
|
79 | Xi'an | 161 |
83 | Colombo | 171 |
84 | Hanoi | 175 |
87 | Karachi | 180 |
89 | Phnom Penh | 189 |
At similar level of per capita GDP, the overall people risk for Singapore is considerably lower than Tokyo or Seoul. A large part of this outcome can be attributed to Singapore's willingness and ability to attract foreign talents that complement its own native workforce. Hong Kong also appears to enjoy similar advantage over Seoul or Tokyo. According to Payne, "An important factor for companies operating in a high income city in Asia is the ease of deploying or attracting talent to work in the city. Companies operating in cities unable or unwilling to attract foreign talent must expect a tougher challenge to fill key positions with the most qualified candidates."
Table 2: 10 Lowest Risk & 10 Highest Risk Cities
Lowest Risk Cities |
|
Highest Risk Cities | ||||
Rank | City | Rating (25-250) | Rank | City | Rating (25-250) | |
1 | Toronto | 70 | 90 | Dhaka | 190 | |
2 | New York | 73 | 89 | Phnom Penh | 189 | |
3 | Singapore | 74 | 88 | Lagos | 182 | |
3 | London | 74 | 87 | Karachi | 180 | |
5 | Montreal | 77 | 86 | Tehran | 178 | |
6 | Zurich | 78 | 85 | Nairobi | 177 | |
6 | Stockholm | 78 | 84 | Hanoi | 175 | |
8 | Copenhagen | 79 | 83 | Colombo | 171 | |
8 | Amsterdam | 79 | 82 | Cairo | 169 | |
10 | Los Angeles | 80 | 80 | Lima | 164 | |
|
|
|
|
80 | St. Petersburg | 164 |
Table 3: People Risk Rankings by Area of Risk
|
City | ||||
|
Toronto | New York | Singapore | London | Montreal |
Overall Ranking | 1 | 2 | 3 | 4 | 5 |
Ranking by Area of Risk | |||||
Demographic | 14 | 2 | 2 | 19 | 23 |
Government Support | 2 | 12 | 1 | 10 | 2 |
Education | 4 | 1 | 41 | 16 | 7 |
Talent Development | 2 | 2 | 11 | 2 | 16 |
Employment Practices | 12 | 23 | 23 | 6 | 12 |
Aon Consulting 2010 People Risk Index™
Country | City | Rank | Overall Rating (25 – 250) |
|
Country | City | Rank | Overall Rating (25 – 250) |
Bangladesh | Dhaka | 90 | 190 |
|
Czech Republic | Prague | 45 | 117 |
Cambodia | Phnom Penh | 89 | 189 |
|
Spain | Barcelona | 44 | 106 |
Nigeria | Lagos | 88 | 182 |
|
South Korea | Seoul | 43 | 105 |
Pakistan | Karachi | 87 | 180 |
|
Spain | Madrid | 42 | 103 |
Iran | Tehran | 86 | 178 |
|
United Arab Emirates | Dubai | 41 | 99 |
Kenya | Nairobi | 85 | 177 |
|
United States | Detroit | 40 | 98 |
Viet Nam | Hanoi | 84 | 175 |
|
Germany | Frankfurt | 38 | 97 |
Sri Lanka | Colombo | 83 | 171 |
|
Germany | Berlin | 38 | 97 |
Egypt | Cairo | 82 | 169 |
|
Belgium | Brussels | 36 | 96 |
Peru | Lima | 80 | 164 |
|
New Zealand | Auckland | 36 | 96 |
Russia | St. Petersburg | 80 | 164 |
|
Austria | Vienna | 35 | 95 |
China | Xi’an | 79 | 161 |
|
United Kingdom | Manchester | 34 | 94 |
Russia | Moscow | 78 | 157 |
|
France | Paris | 30 | 93 |
China | Chengdu | 77 | 154 |
|
United States | Denver | 30 | 93 |
India | Kolkata | 75 | 153 |
|
United States | Phoenix | 30 | 93 |
China | Dalian | 75 | 153 |
|
United States | Seattle | 30 | 93 |
Colombia | Bogota | 74 | 152 |
|
United States | Washington DC | 28 | 92 |
India | Bangalore | 72 | 151 |
|
United States | Minneapolis | 28 | 92 |
China | Wuhan | 72 | 151 |
|
United States | Miami | 27 | 91 |
India | Chennai | 71 | 150 |
|
United States | Houston | 25 | 90 |
Turkey | Istanbul | 70 | 149 |
|
Japan | Osaka | 25 | 90 |
China | Tianjin | 69 | 148 |
|
United States | San Diego | 22 | 89 |
Mexico | Mexico City | 68 | 147 |
|
United States | Dallas | 22 | 89 |
Indonesia | Jakarta | 67 | 144 |
|
United States | Atlanta | 22 | 89 |
Philippines | Manila | 64 | 142 |
|
Ireland | Dublin | 20 | 88 |
China | Guangzhou | 64 | 142 |
|
Taiwan | Taipei | 20 | 88 |
Greece | Athens | 64 | 142 |
|
United States | Philadelphia | 19 | 87 |
Argentina | Buenos Aires | 60 | 141 |
|
United States | San Francisco | 16 | 85 |
India | Delhi | 60 | 141 |
|
Hong Kong | Hong Kong | 16 | 85 |
Brazil | Rio de Janeiro | 60 | 141 |
|
Australia | Sydney | 16 | 85 |
China | Shenzhen | 60 | 141 |
|
Australia | Melbourne | 15 | 84 |
India | Mumbai | 59 | 138 |
|
United States | Boston | 13 | 83 |
South Africa | Johannesburg | 58 | 137 |
|
Canada | Vancouver | 13 | 83 |
Italy | Rome | 56 | 136 |
|
Japan | Tokyo | 12 | 82 |
Saudi Arabia | Riyadh | 56 | 136 |
|
United States | Chicago | 11 | 81 |
Brazil | Sao Paulo | 54 | 135 |
|
United States | Los Angeles | 10 | 80 |
Thailand | Bangkok | 54 | 135 |
|
Netherlands | Amsterdam | 8 | 79 |
China | Shanghai | 53 | 130 |
|
Denmark | Copenhagen | 8 | 79 |
China | Beijing | 52 | 129 |
|
Sweden | Stockholm | 6 | 78 |
Malaysia | Kuala Lumpur | 51 | 128 |
|
Switzerland | Zurich | 6 | 78 |
Italy | Milan | 49 | 126 |
|
Canada | Montreal | 5 | 77 |
Poland | Warsaw | 49 | 126 |
|
United Kingdom | London | 3 | 74 |
Portugal | Lisbon | 48 | 125 |
|
Singapore | Singapore | 3 | 74 |
Chile | Santiago | 47 | 119 |
|
United States | New York | 2 | 73 |
Israel | Tel Aviv | 46 | 118 |
|
Canada | Toronto | 1 | 70 |
Media Contact
Alan Pang
Tel: +65-6239-8821
Email: alan_pang@aon-asia.com
[1] The 90 cities were selected based on population size, rate of population growth, level of business investment and geographic spread among the cities covered.