Toronto is the Lowest Risk City in the World for Employers, Says Aon
Consulting
People Risk Index helps organizations assess risks when hiring, employing and moving staff
CHICAGO, Sept. 27 /CNW/ - 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 page 6 for global rankings; See page 4 for Canadian highlights). According to the Index, the five lowest risk cities for employers are Toronto, New York, Singapore, London and Montreal. 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 Table 1, page 5 for 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 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. And Singapore is No. 1 in government support but is ranked 41 in education. (See Table 2, page 5 for 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. In Canada, more than 800 Canadian professionals in 12 offices coast-to-coast work 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 and reinsurance 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 Euromoney magazine'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 and http://www.aon.com/unitedin2010 to learn about Aon's global partnership and shirt sponsorship with Manchester United.
Notes on Canadian Results
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All three Canadian cities in the 2010 Aon People Risk(TM) Index fared exceptionally well, providing employers with a low recruitment and employment risk environments. Unlike many of the low risk cities in other countries, the Canadian ratings were based on consistently good ratings across the board, rather than in a few areas that are very low and others that are average or worse.
Nevertheless, Toronto, Montreal and Vancouver had particularly low People Risk ratings due to:
- Consistent inflow of new talent;
- Relatively high productivity per person;
- Low levels of discrimination, providing an opportunity to use the
entire local talent pool;
- Strong occupational health and safety practices;
- A highly literate, well educated workforce supplemented by
considerable local opportunity for education and training
development;
- Availability of multilingual managers and professionals with
excellent opportunities for management education and development;
- Low levels of business corruption and hiring and promotion practices
largely based on merit.
The key factors distinguishing these three Canadian cities are largely based on size, and the opportunities of employers to mitigate hiring and employment risk with larger labour markets. Similarly, larger markets tend to have lower risk for hiring and employing high potential leaders. Finally, the relative age of the workforce and population near retirement age also contributed to the some of the risk difference.
All three Canadian cities have some room for improvement (excluding demographic factors). Two key opportunities include:
- creating a better labour relations environment and
- reducing the health care expense burden employers face.
Nevertheless, these risk categories still have average ratings vis-à-vis our international comparators.
Table 1: 10 Lowest Risk & 10 Highest Risk Cities
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Lowest Risk Cities Highest Risk Cities
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Rank City Rating Rank City Rating
(25-250) (25-250)
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1 Toronto 70 90 Dhaka 190
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2 New York 73 89 Phnom Penh 189
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3 Singapore 74 88 Lagos 182
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3 London 74 87 Karachi 180
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5 Montreal 77 86 Tehran 178
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6 Zurich 78 85 Nairobi 177
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6 Stockholm 78 84 Hanoi 175
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8 Copenhagen 79 83 Colombo 171
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8 Amsterdam 79 82 Cairo 169
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10 Los Angeles 80 80 Lima 164
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80 St.
Petersburg 164
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Table 2: People Risk Rankings by Area of Risk
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City
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Toronto New York Singapore London Montreal
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Overall Ranking 1 2 3 4 5
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Ranking by Area of Risk
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Demographic 14 2 2 19 23
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Government Support 2 12 1 10 2
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Education 4 1 41 16 7
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Talent Development 2 2 11 2 16
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Employment Practices 12 23 23 6 12
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Aon Consulting 2010 People Risk Index(TM)(C) 2010 Aon Consulting.
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Country City Rank Overall Rating
(25 - 250)
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Bangladesh Dhaka 90 190
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Cambodia Phnom Penh 89 189
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Nigeria Lagos 88 182
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Pakistan Karachi 87 180
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Iran Tehran 86 178
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Kenya Nairobi 85 177
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Viet Nam Hanoi 84 175
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Sri Lanka Colombo 83 171
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Egypt Cairo 82 169
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Peru Lima 80 164
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Russia St. Petersburg 80 164
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China Xi'an 79 161
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Russia Moscow 78 157
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China Chengdu 77 154
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India Kolkata 75 153
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China Dalian 75 153
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Colombia Bogota 74 152
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India Bangalore 72 151
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China Wuhan 72 151
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India Chennai 71 150
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Turkey Istanbul 70 149
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China Tianjin 69 148
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Mexico Mexico City 68 147
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Indonesia Jakarta 67 144
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Philippines Manila 64 142
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China Guangzhou 64 142
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Greece Athens 64 142
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Argentina Buenos Aires 60 141
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India Delhi 60 141
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Brazil Rio de Janeiro 60 141
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China Shenzhen 60 141
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India Mumbai 59 138
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South Africa Johannesburg 58 137
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Italy Rome 56 136
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Saudi Arabia Riyadh 56 136
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Brazil Sao Paulo 54 135
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Thailand Bangkok 54 135
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China Shanghai 53 130
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China Beijing 52 129
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Malaysia Kuala Lumpur 51 128
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Italy Milan 49 126
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Poland Warsaw 49 126
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Portugal Lisbon 48 125
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Chile Santiago 47 119
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Israel Tel Aviv 46 118
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Czech Republic Prague 45 117
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Spain Barcelona 44 106
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South Korea Seoul 43 105
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Spain Madrid 42 103
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United Arab Emirates Dubai 41 99
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United States Detroit 40 98
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Germany Frankfurt 38 97
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Germany Berlin 38 97
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Belgium Brussels 36 96
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New Zealand Auckland 36 96
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Austria Vienna 35 95
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United Kingdom Manchester 34 94
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France Paris 30 93
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United States Denver 30 93
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United States Phoenix 30 93
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United States Seattle 30 93
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United States Washington DC 28 92
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United States Minneapolis 28 92
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United States Miami 27 91
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United States Houston 25 90
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Japan Osaka 25 90
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United States San Diego 22 89
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United States Dallas 22 89
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United States Atlanta 22 89
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Ireland Dublin 20 88
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Taiwan Taipei 20 88
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United States Philadelphia 19 87
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United States San Francisco 16 85
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Hong Kong Hong Kong 16 85
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Australia Sydney 16 85
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Australia Melbourne 15 84
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United States Boston 13 83
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Canada Vancouver 13 83
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Japan Tokyo 12 82
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United States Chicago 11 81
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United States Los Angeles 10 80
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Netherlands Amsterdam 8 79
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Denmark Copenhagen 8 79
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Sweden Stockholm 6 78
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Switzerland Zurich 6 78
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Canada Montreal 5 77
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United Kingdom London 3 74
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Singapore Singapore 3 74
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United States New York 2 73
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Canada Toronto 1 70
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(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.
For further information: Media Contact, Autom Tagsa, 416.542.5659, [email protected]; Marilynne Madigan, 416.230.9699
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