New York maybe crowded and noisy, and the cost of living in the city is sky-high. But it’s also the best city in the entire world for recruiting, employing and relocating employees, according to a new study.
Aon Hewitt’s 2012 “People Risk Index” measured the risks that organizations face with recruitment, employment and relocation in 131 cities worldwide. The index analyzed factors as demographics, access to education, talent development, employment practices and government regulations.
Aon Hewitt is the human resource consulting division of Aon plc, a London-headquartered global provider of risk management, insurance and reinsurance brokerage, and human resources solutions and outsourcing services.
The index showed that New York edged out Toronto as the world’s lowest-risk city. They are followed by Singapore, Montreal and London.
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, Aon Hewitt said.
However, the index showed that New York 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.
Lagos Tops List of Highest-Risk Cities
Conversely, cities 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.
“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.”