Muscat is among the lowest risk cities in the region, with a rating that puts it ahead of international business hubs such as Barcelona, Milan, Lisbon, Kuala Lumpur and Beijing, according to the findings from the 2012 People Risk Index, created by Aon Hewitt, the global human resources business of Aon.
The Aon Hewitt 2012 People Risk Index measures the risks that organisations face with recruitment, employment and relocation in 131 cities worldwide by analysing 30 qualitative and quantitative factors across five areas including, demographics, education, government support, talent development and employment practices. Muscat ranks forty seventh among the 131 cities covered in the Index and is the third-highest ranked city in the Middle East, behind Dubai and Doha. Muscat also finished higher on the People Risk Index than leading Asian business hubs such as Shanghai, Beijing, Kuala Lumpur, Jakarta, Colombo, Bangkok and Mumbai, and European capitals such as Rome, Moscow, Budapest and Belgrade. When it came to Middle Eastern cities, Muscat was followed by Manama, Riyadh, Tunis, Cairo, Amman, Tehran, Algiers and Rabat on the list, while Sana'a and Damascus were ranked the lowest of all cities involved in the survey. Risk factors Based on Aon Hewitt analysis, MENA cities can be divided into two groups.
The first group consists of cities with relatively low risk ratings and includes the GCC cities (Dubai, Doha, Muscat, Manama, and Riyadh). The second group of cities, with relatively high risk ratings includes Tunis, Cairo, Amman, Tehran, Algiers, Rabat Tripoli, Baghdad, Sana'a and Damascus. Some additional key findings of the people risk factors are highlighted below. Demographics risks are those associated with labour supply, the economy and the society. The key risk factors that differentiate the low risk MENA cities from the high risk group include the higher workforce productivity due to a more stable economic environment, future availability of workforce due to younger population composure and population inflow. Government support Risks associated with government policies that help or hinder the management of people.
The key risk factors that differentiate the high risk MENA cities from the low risk group are primarily attributed to higher terrorism and political risk and violence and crime. In the recent Arab Spring, the high risk cities were more affected with higher political and economic instability as the cities experienced significant parliamentary and policy reforms. Thus, there is great uncertainty in terms of government support and relations. In contrast, the low-risk MENA cities faced minor civil unrest and political changes and the economic stability in these countries is evident even during the Arab Spring, allowing employers to keep their workforce plans and manage capacity of talent over a longer time, with less disruptive and costly events. "This period is an inflection point in the development of the region; companies' decisions on operating in the region are impacted by government limitations on expatriate workforce employment and incentives for employment of local talent," said Radhika Punshi, Head of Applied Research and Solutions for Aon Hewitt in the MENA region.
Education
The key risk factors that differ between the low risk MENA cities from the high risk group include literacy rates, and secondary and tertiary enrollments. The low risk cities typically have high literacy rates of approximately 90 per cent compared to the high risk cities with literacy rates that range from 56 per cent to 83 per cent. Risks associated with the quality and availability of adequate recruiting and training resources.
The low risk MENA cities have better quality training and educational institutes thus increasing the availability of good quality talents at different levels from entry, professional and managerial levels. In addition, low risk MENA cities have much lower levels of brain drain and more qualified talent from high risk MENA cities seeks out opportunities in the low MENA cities due to their higher salaries and better working environment. This thus imply that there is a trend of decreasing supply of qualified talents in the high risk cities, worsen by the insufficient training by government, private institutions and companies.
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. The low risk cities in MENA had lower risk in employment practices enabling organisations to adjust their workforce quickly to changing circumstances with relatively low cost. These cities have modest redundancy restrictions allowing greater flexibility for organisations in downsizing or restructuring operations. In contrast, the high risk cities have greater restrictions and companies will face greater difficulty and cost in downsizing workforce in these high risk cities.
