New York City remains the lowest-risk city globally for the second consecutive year when it comes to recruiting, employing and relocating employees, according to research by Aon Hewitt.
The research finds that New York City is at such a low risk because of its top educational institutions, training facilities and large pool of qualified and experienced talent. New York City also boasts the second lowest demographic risk, which is attributed to the city's large working-age population and high work force productivity.
Besides New York City, other low-risk cities include Singapore, Toronto, London and Montreal while Luanda, Angola; Port Moresby, Papua New Guinea; Addis Ababa, Ethiopia; Sana'a, Yemen; and Damascus, Syria, are among the highest-risk cities.
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"The way businesses now recognize and manage people risk has changed significantly over the last few years," says Richard Payne, talent and rewards practice leader for Aon Hewitt in Asia Pacific. "Driven by a need to do more with less, business leaders have to be more innovative around how they invest; this has had an impact on how they think about talent sourcing and work force planning. Aon Hewitt's People Risk Index enables businesses to make informed decisions – to balance operational requirements with people risks."
The research finds that there is little difference between 2012 rankings and 2013 rankings of the top five cities. While Singapore is still the only city outside of Europe and North America in the top five, Hong Kong is ranked as one of the 10 lowest-risk cities. Copenhagen and Zurich both entered the top 10 list in 2013, given their pro-business employment policies, their open-door policies regarding talent, and their focus on developing and enhancing the education and talent development infrastructures. As eurozone cities are at higher risk because of the ongoing debt crisis, it has lessen the relative risk in European cities outside of the eurozone.
"Pro-business employment policies have a significant impact on people risk," Payne says. "Where government policies support a more flexible approach to talent immigration, employment practices and the provision of social welfare, these cities are able to attract and retain a talent supply critical for businesses."
Among the top 10 highest-risk cities to employers are Luanda, Angola; Port Moresby, Papua New Guinea; Lagos, Nigeria; Dhaka, Bangladesh; Tripoli, Libya; Karachi, Pakistan; Baghdad, Iraq; Addis Ababa, Ethiopia; Sana'a, Yemen; and Damascus, Syria. These cities are at risk because of the lack of stable and transparent governments, which cannot implement and enforce business-friendly employment policies. There is also little government investment in creating and improving education and talent development infrastructures.
"There is a silver lining for these high risk cities: They will continue to experience population growth in the next decade, which will increase the size of the labor pool," Payne says. "However, if the education and talent development infrastructure do not improve, these cities will face a surplus of low-skilled workers and a shortage of highly educated professional talent."
Even with the challenging business and people environments, employers remain interested in these high-risk cities as they offer many natural resources and high economic growth potential.
"Africa presents many opportunities if employers are able to identify and mitigate the people risk in these cities effectively." Payne says.
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