Post date: Sep 27, 2010 11:32:22 AM
CHICAGO, Sept. 27 /PRNewswire-FirstCall/ -- 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 (See below for global rankings and U.S. highlights). According to the Index, the five lowest risk cities for employers are Toronto, New York, Singapore, London andMontreal. 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 below for table with 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 the 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. AndSingapore is No. 1 in government support but is ranked 41 in education. (See below for table with 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 andreinsurance 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 Euromoneymagazine'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 andhttp://www.aon.com/unitedin2010 to learn about Aon's global partnership and shirt sponsorship with Manchester United.
U.S. People Risk Index Highlights
U.S. cities fared very well in the education and talent development categories of the index. High literacy, widespread secondary school enrollment and the large number of university graduates in most U.S. cities all serve to increase the pool of educated talent and thus reduce risk of recruitment. The relatively young population, as compared to Western Europe, also helps mitigate the risk of the pending retirements of the baby boomer generation.
The availability and quality of local training and recruiting resources throughout the U.S. also helps American employers overcome the risk of not being able to find or develop the skills and capabilities they need for their organization. However, uncertainty surrounding provisions of health care and retirement benefits are the two critical areas that increase the risks of employment in the U.S. The higher risk in these areas pushed up the risk ratings of American cities over their European counterparts.
"As U.S. employers continue to face many challenges in this economy and job market, people risk should be at the forefront as they assess their recruitment, employment, development and restructuring options," said Cindy Keaveney, Aon Consulting's Human Capital Practice Leader, based in Philadelphia, Pa.
"With this information, employers can make important decisions in selecting locations for investment and match their business and operational requirements to the people risk profile in the locations in which they operate in the U.S.," Keaveney added.
Lowest Risk Cities
The role of New York and Los Angeles as gateways into the U.S. is a major factor for the cities low recruitment and employment risk ratings. Both cities have a large diverse multilingual workforce, which is increasingly critical in a global work environment. New York's relatively low crime rate, when compared to other U.S. cities, also helps reduce its employment risks. Plus, the sheer size of the first and second largest U.S. metropolitan areas also helps reduce their risk of recruitment and employment. New York andLos Angeles (along with Boston) have more world-class education institutions and training facilities than other U.S. cities.
Highest Risk Cities
At the other end of the scale, Detroit scores five points higher in risk than any other U.S. city covered by the survey (40th overall in the ranking of 90 cities). Detroit's high crime rate, net outward migration, and lack of recruiting and training resources combine to increase the risk of recruitment and employment in the Motor City. Denver, Phoenix and Seattle also ranked higher in risk than other U.S. cities (all three cities scored 93 placing them 31 in the ranking). Their higher rating can be attributed to their smaller size and more limited executive recruiting and training resources than other larger U.S. cities.
(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.
SOURCE Aon Corporation