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World – Riskiest cities to recruit are revealed

18 May 2012

New York is the lowest risk city in the world for recruiting, employing and relocating employees, but Toronto, Singapore, Montreal and London still made it into the top five, according to the latest research by global human resources business Aon Hewitt.

But Aon also found that many cities in the Middle East and parts of Africa were regarded as the least desirable by employers, including 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, particularly in the Middle East. Aon said that these cities also have significant risks in recruiting talent, as education systems are unable to keep up with demand, making it difficult for organisations to find sufficiently-skilled workers.

“Government support strongly correlates with people risk,” said Rick Payne, regional Talent and Rewards practice leader for Aon Hewitt in Asia Pacific.

“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. As this happens, we expect the demographic risks in these cities will improve over time.”

Things are looking differently in the low risk cities because government transparency is higher and talent initiatives are more prevalent, according to Mr Payne.

“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 research showed that New York edged out Toronto as the world's lowest risk city, ranking 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 but 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 followed closely 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.

Singapore is the only Asian city which made it into the top five, which was helped by 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.

 “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,” added Mr Payne.

The 2012 People Risk Index measures the risks that organisations face with recruitment, employment and relocation in 131 cities worldwide by analysing  factors such as demographics, access to education, talent development, employment practices and government regulations. 

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