New York comes in as the lowest risk city globally for recruiting, employing and relocating employees, according to a new study by Aon Hewitt, a human capital consulting firm in Chicago.
This study, People Risk Index, examines employer risks regarding recruitment, employment and relocation in 131 cities worldwide by considering data such as demographics, access to education, talent development, employment practices and government regulations. Besides New York, the other lowest risk cities are Toronto, Singapore, Montreal and London while the highest risk cities are Lagos, Nigeria; Addis Ababa, Ethiopia; Baghdad, Iraq; Sana'a, Yemen; and Damascus, Syria.
"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,” says Rick Payne, regional talent and rewards practice leader for Aon Hewitt in Asia Pacific. “To remain competitive, they are redesigning their talent sourcing strategies and shifting their operations to more advantageous locations. Identifying locations and formulating a successful work force 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."
Given New York’s large working-age population, positive immigration rate and high work force productivity, the city ranked lowest in demographics risk. New York's education and talent development risks also are some of the lowest worldwide, which can be credited to its reputable educational institutions and training facilities as well as its large pool of qualified and experienced talent. Despite this, New York has the higher employment risk than the other top five cities because of the higher violence and crime rates and higher health care and benefits liability risks.
For the most part, Toronto and Montreal rank among the five lowest risk cities because of Canada's strict enforcement of equal opportunity laws, clear government-mandated health and retirement benefits, low corruption levels, 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 ranks as the only lowest risk city outside of Europe and North America because of its strict laws on discrimination and occupational health and safety, flexible personnel costs, lack of corruption and inclination to work with the private sector on human resources-related issues. Additionally, Singapore has low terrorism and political risks along with strong government support.
"Government support strongly correlates with people risk," Payne says. "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 work force development."
For the highest risk cities, political chaos and unstable governments greatly increase the people risks in these cities. Particularly in Middle-Eastern cities, this impacts the ability of employers to establish business-friendly employment practices as well as talent development initiatives. Recruiting is especially difficult because the education systems cannot meet demand.
"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," Payne says. "As this happens, we expect the demographic risks in these cities will improve over time."