By Jasmine Ng

SINGAPORE has the lowest talent risk in Asia Pacific, according to a global study by human resources business Aon Hewitt.

This means organisations here face the least risk among 50 Asian cities with regards to talent recruitment, employment and restructuring. The index measures the risk by assessing demographics, education, government support, talent development and employment practices. The republic is also the third lowest risk city among the 131 cities worldwide covered in the index.

Hong Kong has the second lowest risk in the region and is ninth in the global ranking, tying with Vancouver and Copenhagen. Melbourne, Sydney and Taipei completed the list of the five lowest risk cities in Asia Pacific.

"With increasing labour costs and low growth in the Western economies, more companies are looking to Asia as a source of talent," says Aon Hewitt's regional talent and rewards practice leader Rick Payne.

"While Singapore is clearly the lowest risk location in Asia for employers, the risk of sourcing and employing talent throughout much of Asia is declining as the educational and training infrastructure improves and employment regulations become clearer and more equitably enforced." he adds.

Aon Hewitt has found that Singapore leads globally in government support and talent development, but its small ageing population, lower tertiary enrolment rate and high staff turnover pull scores down.

"Organisations operating in Singapore face little risk in terms of dealing with government agencies due to the non-confrontational and transparent work processes, and the government agencies' willingness to collaborate with the private sector on human capital issues," Aon Hewitt says.

However, it warns that Singapore has the highest risk for demographics. The key contributing risk factor is the relatively small working-age population size at 3.7 million, which is exacerbated by the Republic's ageing population.

Aon Hewitt says the availability of future working age population size is also projected to fall by 2 to 4 per cent in the next decade.

The tertiary enrolment rate here is also lower than other cities in the region, such as Melbourne, Sydney and Taipei.

However, this situation is expected to change with the establishment of new universities and the government adding another 2,000 university places by 2015, Aon Hewitt says.

This article was first published in The Business Times.