When it comes to manpower issues, companies in Phnom Penh are having it easier now than they did last year, but they still face among the highest uncertainties compared with those in cities elsewhere, according to rankings released by a global human resource firm.

Phnom Penh ranked 127 out of 138 cities in Aon Hewitt’s 2013 People Risk Index released last week, which looked at three areas: the challenges or risks related to recruiting qualified staff, engaging and retaining them, and redeploying them in times of change.

This took into account a country’s demographics, access to education, government regulations, talent development and employment practices.

According to Kevin Britten, managing director of Top Recruitment, the economy in Cambodia is so small that it is difficult to meet the needs of employers. “There isn’t a [large] pool of talent to dip into, and [only] a very small minority of companies have developed training and retention policies,” he said.

“Old-style management, which most companies follow, does not grow this pool of talent, but we are seeing more and more modern-style companies.

“New companies coming into the market can assess this situation and build their own training plans,” he said.

In the 2012 index, Phnom Penh ranked 122 out of 131 cities, but its overall score meant it fared better than in 2013, according to Aon Hewitt.

While the situation in Phnom Penh is improving, it will be limited by the size of Cambodia’s economy, Britten said. “We will never be able to rise to the top of a ranking like this, [the judging criteria] will always be skewed against a country as small as Cambodia.”

Other “high-risk” cities in the 2013 index included Lusaka, the capital of Zambia, Bangladesh’s Dhaka, and Caracas in Venezuela. Damascus ranked lowest.

Aon’s research consultant Tabitha Lim said: “The lack of a stable and transparent government continues to be an obstacle to implement and enforce business-friendly employment practices in these cities.”

Topping the rankings for the second year running is New York City, followed by Singapore and Toronto.