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Toronto is the Lowest Risk City in the World for Employers, Says Aon Consulting

09/27/2010
People Risk Index helps organizations assess risks when hiring, employing and moving staff

CHICAGO, Sept 27, 2010 /PRNewswire via COMTEX/ --

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).

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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 below for global rankings and U.S. 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 below for table with 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 the 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 below for table with 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. The firm works 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/unitedin2010to learn about Aon's global partnership and shirt sponsorship with Manchester United.

U.S. People Risk Index Highlights

U.S. cities fared very well in the education and talent development categories of the index. High literacy, widespread secondary school enrollment and the large number of university graduates in most U.S. cities all serve to increase the pool of educated talent and thus reduce risk of recruitment. The relatively young population, as compared to Western Europe, also helps mitigate the risk of the pending retirements of the baby boomer generation.

The availability and quality of local training and recruiting resources throughout the U.S. also helps American employers overcome the risk of not being able to find or develop the skills and capabilities they need for their organization. However, uncertainty surrounding provisions of health care and retirement benefits are the two critical areas that increase the risks of employment in the U.S. The higher risk in these areas pushed up the risk ratings of American cities over their European counterparts.

"As U.S. employers continue to face many challenges in this economy and job market, people risk should be at the forefront as they assess their recruitment, employment, development and restructuring options," said Cindy Keaveney, Aon Consulting's Human Capital Practice Leader, based in Philadelphia, Pa.

"With this information, employers can make important decisions in selecting locations for investment and match their business and operational requirements to the people risk profile in the locations in which they operate in the U.S.," Keaveney added.

Lowest Risk Cities

The role of New York and Los Angeles as gateways into the U.S. is a major factor for the cities low recruitment and employment risk ratings. Both cities have a large diverse multilingual workforce, which is increasingly critical in a global work environment. New York's relatively low crime rate, when compared to other U.S. cities, also helps reduce its employment risks. Plus, the sheer size of the first and second largest U.S. metropolitan areas also helps reduce their risk of recruitment and employment. New York and Los Angeles (along with Boston) have more world-class education institutions and training facilities than other U.S. cities.

Highest Risk Cities

At the other end of the scale, Detroit scores five points higher in risk than any other U.S. city covered by the survey (40th overall in the ranking of 90 cities). Detroit's high crime rate, net outward migration, and lack of recruiting and training resources combine to increase the risk of recruitment and employment in the Motor City. Denver, Phoenix and Seattle also ranked higher in risk than other U.S. cities (all three cities scored 93 placing them 31 in the ranking). Their higher rating can be attributed to their smaller size and more limited executive recruiting and training resources than other larger U.S. cities.

Table 1: 10 Lowest Risk & 10 Highest Risk Cities

Lowest Risk Cities


Highest Risk Cities

Rank

City

Rating
(25-
250)


Rank

City

Rating
(25-
250)

1

Toronto

70


90

Dhaka

190

2

New York

72


89

Phnom Penh

189

3

Singapore

74


88

Lagos

183

3

London

74


87

Karachi

180

5

Montreal

77


86

Tehran

178

6

Zurich

78


85

Nairobi

177

6

Stockholm

78


84

Hanoi

175

8

Copenhagen

79


83

Colombo

171

8

Amsterdam

79


82

Cairo

169

10

Los Angeles

80


80

Lima

164



80

St. Petersburg

164


Table 2: People Risk Rankings by Area of Risk


City


Toronto

New York

Singapore

London

Montreal

Overall Ranking

1

2

3

4

5

Ranking by Area of Risk

Demographic

14

2

2

19

23

Government Support

2

12

1

10

2

Education

4

1

41

16

7

Talent Development

2

2

11

2

16

Employment Practices

12

23

23

6

12


Aon Consulting 2010 People Risk Index(TM)

Country

City

Rank

Overall
Rating
(25 - 250)


Country

City

Rank

Overall
Rating
(25 - 250)

Bangladesh

Dhaka

90

190


Czech Republic

Prague

45

117

Cambodia

Phnom Penh

89

189


Spain

Barcelona

44

106

Nigeria

Lagos

88

182


South Korea

Seoul

43

105

Pakistan

Karachi

87

180


Spain

Madrid

42

103

Iran

Tehran

86

178


United Arab Emirates

Dubai

41

99

Kenya

Nairobi

85

177


United States

Detroit

40

98

Viet Nam

Hanoi

84

175


Germany

Frankfurt

38

97

Sri Lanka

Colombo

83

171


Germany

Berlin

38

97

Egypt

Cairo

82

169


Belgium

Brussels

36

96

Peru

Lima

80

164


New Zealand

Auckland

36

96

Russia

St. Petersburg

80

164


Austria

Vienna

35

95

China

Xi'an

79

161


United Kingdom

Manchester

34

94

Russia

Moscow

78

157


France

Paris

30

93

China

Chengdu

77

154


United States

Denver

30

93

India

Kolkata

75

153


United States

Phoenix

30

93

China

Dalian

75

153


United States

Seattle

30

93

Colombia

Bogota

74

152


United States

Washington DC

28

92

India

Bangalore

72

151


United States

Minneapolis

28

92

China

Wuhan

72

151


United States

Miami

27

91

India

Chennai

71

150


United States

Houston

25

90

Turkey

Istanbul

70

149


Japan

Osaka

25

90

China

Tianjin

69

148


United States

San Diego

22

89

Mexico

Mexico City

68

147


United States

Dallas

22

89

Indonesia

Jakarta

67

144


United States

Atlanta

22

89

Philippines

Manila

64

142


Ireland

Dublin

20

88

China

Guangzhou

64

142


Taiwan

Taipei

20

88

Greece

Athens

64

142


United States

Philadelphia

19

87

Argentina

Buenos Aires

60

141


United States

San Francisco

16

85

India

Delhi

60

141


Hong Kong

Hong Kong

16

85

Brazil

Rio de Janeiro

60

141


Australia

Sydney

16

85

China

Shenzhen

60

141


Australia

Melbourne

15

84

India

Mumbai

59

138


United States

Boston

13

83

South Africa

Johannesburg

58

137


Canada

Vancouver

13

83

Italy

Rome

56

136


Japan

Tokyo

12

82

Saudi Arabia

Riyadh

56

136


United States

Chicago

11

81

Brazil

Sao Paulo

54

135


United States

Los Angeles

10

80

Thailand

Bangkok

54

135


Netherlands

Amsterdam

8

79

China

Shanghai

53

130


Denmark

Copenhagen

8

79

China

Beijing

52

129


Sweden

Stockholm

6

78

Malaysia

Kuala Lumpur

51

128


Switzerland

Zurich

6

78

Italy

Milan

49

126


Canada

Montreal

5

77

Poland

Warsaw

49

126


United Kingdom

London

3

74

Portugal

Lisbon

48

125


Singapore

Singapore

3

74

Chile

Santiago

47

119


United States

New York

2

73

Israel

Tel Aviv

46

118


Canada

Toronto

1

70


Media Contact

Sara Carlson

312.381.5045

sara.carlson@aon.com

(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.

SOURCE Aon Corporation

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