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New York ‘lowest risk city for employers’

New York is the lowest risk city in the world for recruiting, employing and relocating workers according to a study published today by Aon Hewitt.


17 MAY 2012 | THE ACTUARY NEWSDESK: NICK MANN

The HR arm of Aon’s 2012 People risk index shows the US East Coast city edging out Toronto in Canada for the accolade, which is based on the risks facing organisations in areas such as demographics, access to education, talent development, employment practices and government regulation.

Third place in the index was taken by Singapore, followed by Montreal in Canada and UK capital London. The five least desirable cities for employers out of the 131 included in the index were: Lagos in Nigeria; Addis Ababa in Ethiopia; Baghdad in Iraq; Sana’a in Yemen and Damascus in Syria.

According to Aon Hewitt, New York ranked lowest in demographics risk because of its large working age population, positive immigration rate and high workforce productivity. It also has some of the lowest education and talent development risks in the world, which the report attributed to its ‘world-class’ educational institutions and training facilities and large pool of qualified and experienced talent.

The city does, however, have higher employment risk than the other cities in the top five, which Aon Hewitt attributed to its higher violence and crime rates and higher health care and benefits liability risks.

Both Toronto and Montreal ranked highly primarily due to Canada’s ‘strict’ enforcement of equal opportunity laws, clear government-mandated health and retirement benefits, low levels of corruption and what the report labelled ‘high quality of broad availability’ of training facilities.

As the only city outside Europe and North America in the top five best places for employers, Singapore benefits from strict laws on discrimination and occupational health and safety. The report also highlighted its flexible approach to personnel costs, lack of corruption and its government’s willingness to work with the private sector on HR-related issues.

Rick Payne, regional talent and rewards practice leader for Aon Hewitt in Asia Pacific, said: ‘Government support strongly correlates with people risk. 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.’

The five cities that ranked least well on the index were characterised by political turmoil and a lack of stable governments which substantially increase the people risks for employers, the report said.

These issues – which particularly affect the Middle-Eastern cities – impact on a government’s ability to implement and enforce business-friendly employment practices and invest in talent development initiatives.

They also have significant risks in recruiting talent as education systems struggle to keep up with demand, which the report said makes it hard for organisations to find sufficiently-skilled workers.

However, Mr Payne said the demographic risks in these cities were expected to improve as the labour pool in the lower-rank cities grew over the next decade.

‘Working age populations are expected to grow in many high-risk cities over the next decade, which will expand the future labour pool and increase opportunities for organisations to recruit and redeploy talent,’ he said. ‘As this happens, we expect the demographic risks in these cities will improve over time.’

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