Strong government support and talent development facilities lower people risk in Zurich

The 2012 global study found London, United Kingdom to be the city with the lowest people risk in Europe and Kiev, Ukraine to be the highest risk, according to Aon Hewitt, the global human resources business of Aon plc (NYSE: AON).
Zurich is ranked 14th among the 131 cities covered in the People Risk Index, at the same rank as the North American city of San Francisco. Among the 31 European cities in the index, Zurich is ranked 3rd, among the five lowest risk cities in Europe which includes London, Copenhagen, Stockholm and Amsterdam. Of the five categories of people risk measured in the index, Aon Hewitt found that Zurich has the highest risk for demographics and relatively low risk in the areas of education, talent development and employment practices. The risk in the areas of education, talent development and employment practices are comparable to London the lowest risk city in Europe.

Breaking Down Key People Risk Factors

The following are some additional key findings of the people risk factors are highlighted below.

Demographics risks

Demographics risks are those associated with labor supply, the economy and the society.

Among the five people risk areas, Zurich has the highest risk for demographics. This high risk can be attributed to its relatively small working age population size in the metropolitan area at around 0.48 million. This is situation is further exacerbated by the ageing population in the country with almost 21.3% of the population above the age of 64. The availability of the future working age population is also projected to decline by almost 6% in the next 10 years. These demographic trends can potentially limit the size of the local talent pool, making staff resourcing a challenge.

Government Support:

Risks associated with government policies that help or hinder the management of people.

Zurich has low risks in terms of government support. Risk related to politics and terrorism is very low and organizations operating in Zurich can expect to face low risk when dealing with government agencies as they are transparent and non-confrontational. With the relatively stable economy despite the ongoing euro-zone turmoil, Zurich s risk associated with workforce planning is comparatively lower than its neighbors, thus better allowing organizations to forecast future workforce requirements. The incidence of crime and violence is moderately low, reducing the possible risks to organizations in terms of workforce productivity and morale.

Education:

Risks associated with finding qualified professionals.

The education risk in Zurich is low, on par with London. The education capacity has the ability to keep up with the market demand for talents at different levels from entry-level skilled technicians to professionals. Secondary school enrollment is high at around 95%. Tertiary school enrollment at around 55%, however, is lower than some of the European cities in Scandinavia such as Copenhagen. Based on Aon Hewitt analysis, there is medium-low risk associated with education spending, estimated at between USD1, 500 to USD2, 000 per capita annually. However, education spending is set to increase with the submitted budget of CHF 24 billion for the Promotion of Education, Research and Innovation (ERI) system for 2013-2016 which would lead to a growth of 3.7% in funding the ERI. This indicates the Swiss governments emphasis on ensuring that Switzerland remains a competitive location in terms of talent.

Talent Development:

Risks associated with the quality and availability of adequate recruiting and training resources.

Zurich has low risks associated with talent development. Aon Hewitt analysis showed that Zurich has a good availability of good quality entry-level talents and managerial-level talents. This can be attributed to the availability of quality external training resources and renowned institutions for management training, even within the country (e.g. ETH Zurich and IMD). Furthermore, the government has displayed its focus on further investing in education and talent development facilities through ERI. As part of the ERI system, the government has also identified the need to satisfy the demand for workers with general education or vocational and professional education and training (VET/PET) qualifications . The multilingual workforce in Switzerland also reduces the risk for employers as they will have more flexibility in teaming and relocating their employees in an international environment. Most professionals and managers can speak English and other regional languages such as French, German and Italian. The risk of brain drain is also lower indicating the availability of talent due to the locations propensity to attract and retain talent. The latest release by the Swiss Federal Statistical Office also indicated that up to 80% of the current population growth is due to net migration into the country.

Employment Practices:

Risks associated with employing people at a given location, such as health care and retirement benefits, occupational health and safety, and equal opportunity.

Zurich has low risk associated with employment practices. The labor relations environment is positive and work stoppages and worker grievances requiring outside intervention are rare as labor management relations are co-operative in Switzerland. Statutory restrictions on redundancy are liberal and not onerous and companies generally have flexibility in reducing personnel costs when restructuring or downsizing, thus reducing the redeployment risk for employers. The level of professionalism in terms of equal opportunities is reliable. The government-mandated pension is reliable, with both employer and employee contributions. In terms of healthcare benefits, government-provided healthcare is good, with government regulation requiring mandatory membership in a health insurance fund and employers are not required by law to provide medical care benefits.

 

To find out more about the 2012 People Risk Index, and to obtain a copy of the 2012 People Risk Index Ratings, please visit http://www.aonpeoplerisk.com or read our press release (German or French).

About Aon Hewitt s People Risk Index
The results are based on research conducted during a six-month period by the Aon Hewitt s Regional Talent & Rewards Analytics Center, Asia Pacific. Data from more than 100 statistical sources provide the quantitative basis for the ratings, which were augmented by the assessment of Aon Hewitt s local and regional human resources experts from around the world.

The 131 cities were selected based on population size, rate of population growth, level of business investment and geographic spread among the cities covered.  

Aon Hewitt s People Risk Index assigned ratings relative to risk for 30 qualitative and quantitative factors across five broad areas: demographics; education; government support; talent development; and employment practices. Each of the 30 factors has a scale from 1 (minimal risk) to 10 (extreme risk). Employment Practices area has 10 factors that are weighted by 50 percent. Thus, the overall ratings are from 25 to 250, where 25 is minimal or no risk and 250 is extreme risk.

 

10 Lowest Risk Cities
 

 

10 Highest Risk Cities
 

 

 

 

 

 

 

 

 

 

 

 

 

1 Out of 131 cities worldwide in People Risk Index 2012

2 Based on a rating of 30 factors across 5 categories of risk

 

European Cities People Risk Rankings by Area of Risk