Multinationals’ focus on mobility as a workforce strategy
supports career growth and global competitiveness
In a rapidly changing world, mobility programs have become a
core component of multinational organizations’ global talent
strategy. Organizations realize that to thrive they must embrace
change, adapt to new technologies, and build emerging skills to
attract, motivate, and enhance talent. According to Mercer's 2019
Global Talent Trends report, 65% of employers across all industries
and countries are using mobility programs to enhance their
workforce strategies. As a result, multinational organizations are
carefully assessing the cost of expatriate packages for their
international assignees. Mercer’s 25th annual Cost of Living Survey
finds that a number of factors, including currency fluctuations,
cost of inflation for goods and services, and volatility in
accommodation prices, contribute to the overall cost of expatriate
packages for employees on international assignments.
“In a skill-focused economy driven by digital disruption and the
need for a globally connected workforce, deploying expatriate
employees is an increasingly important aspect of a competitive
business strategy for global companies,” said Ilya Bonic, President
of Mercer’s Career business. “There are numerous personal and
organizational advantages for sending employees overseas, including
career development, global experience, new skillsets, and
re-allocation of resources. By offering fair and competitive
compensation packages, organizations can facilitate moves that
drive business results.”
Mercer’s 2019 Cost of Living Survey finds that eight out of the
top ten of the world’s most expensive cities for expatriates are
Asian cities, resulting from high costs for expatriate consumer
goods and a dynamic housing market. Tokyo (2), Singapore (3) and
Seoul (4) top the list, while the costliest city in the world for
the second consecutive year is Hong Kong (1). Other cities
appearing in the top ten are Zurich (5), Shanghai (6), Ashgabat
(7), Beijing (8), New York City (9), and Shenzhen (10). The world’s
least expensive cities for expatriates are Tunis (209), Tashkent
(208), and Karachi (207).
Mercer's widely recognized survey is one of the world’s most
comprehensive, and is designed to help multinational companies and
governments determine compensation allowances for their expatriate
employees. New York City is used as the base city for all
comparisons, and currency movements are measured against the US
dollar. The survey includes over 500 cities throughout the world;
this year’s ranking includes 209 cities across five continents and
measures the comparative cost of more than 200 items in each
location, including housing, transportation, food, clothing,
household goods, and entertainment.
“Cost of living is an important component of a city’s
attractiveness for businesses,” said Yvonne Traber, Global Mobility
Product Solutions Leader at Mercer. “Decision makers increasingly
acknowledge that globalization is challenging cities to inform,
innovate, and compete to foster the kind of satisfaction that
attracts both people and investment – the keys to a city’s
future.”
The Americas
Cities in the United States climbed in the ranking due to the
strength of the US dollar against other major currencies as well as
the significant drop of cities in other regions. New York jumped
four places to rank 9, the highest-ranked city in the region. San
Francisco (16) and Los Angeles (18) climbed twelve and seventeen
places, respectively, while Chicago (37) jumped fourteen places.
Among other major US cities, Washington, DC (42) is up fourteen
places, Miami (44) is up sixteen places and Boston (49) is up
twenty-one spots. Portland (107) and Winston Salem, North Carolina
(138) remain the least expensive US cities surveyed for
expatriates.
In South America, Montevideo, Uruguay (70) ranked as the
costliest city followed by San Juan (72), which jumped twenty-three
spots. Other cities in South America that climbed on the list of
costliest cities for expatriates include Panama City (93), San Jose
(131), and Havana (133) rising twenty-one, ten, and twenty-two
spots, respectively. Cities that fell in the ranking despite price
increases on goods and services and accommodation costs include
Brazil and Argentina. In particular, São Paolo (86) dropped
twenty-eight spots. Rio de Janeiro (121) dropped twenty-two places,
while Buenos Aires (133) fell fifty-seven places. Managua (200) is
the least expensive city in South America.
Although most Canadian cities remained stable in the ranking,
the country’s highest-ranked city, Vancouver (112), dropped three
places. Toronto (115) dropped six spots, while Montreal (139)
climbed eight spots. Calgary (153) and Ottawa (161) remained
stable.
Europe, the Middle East, and Africa
Only one European city is among the top ten list of most
expensive cities, which is Zurich at number five, followed by Bern
(12). Geneva (13) is down two places. Eastern and Central European
cities, including Moscow (27), St. Petersburg (75), Prague (97),
and Warsaw (173), dropped ten, twenty-six, fourteen, and nineteen
spots, respectively.
Cities in Western Europe, including Milan (45), Paris (47), Oslo
(61), and Madrid (82), fell in the ranking as well, by twelve,
thirteen, fourteen, and eighteen spots, respectively. The German
city Stuttgart (126) dropped significantly as did Berlin (81) and
Dusseldorf (92). Cities in the United Kingdom saw modest drops,
including Birmingham (135), which fell seven places, Belfast (158)
six spots, and London (23) four spots.
“Despite moderate price increases in most of the European
cities, European currencies have weakened against the US dollar,
which pushed most cities down in the ranking,” explained Ms.
Traber, “Additionally, other factors like recent security issues
and concern about the economic outlook, have impacted the
region.”
Tel Aviv (15) continues to be the most expensive city in the
Middle East for expatriates, followed by Dubai (21), Abu Dhabi
(33), and Riyadh (35). Cairo (166) remains the least expensive city
in the region. “Many currencies in the Middle East are pegged to
the US dollar, which pushed cities up in the ranking, as well as
steep increases for expatriate rental accommodations,” said Ms.
Traber.
Despite dropping from the top ten most expensive cities for
expatriates, N’Djamena (11) remains the highest-ranking city in
Africa. Following are Victoria (14) rising seven places, and
Kinshasa (22) rising fifteen spots. Libreville (24) dropped six
places. Dropping one spot, Tunis (209) in Tunisia ranks as the
least expensive city in the region and globally.
Asia Pacific
Eight of the top ten cities in this year’s ranking are in Asia
due in part to a strong housing market. Hong Kong (1) remains the
most expensive city for expatriates both in Asia and globally as a
result of the housing market and currency being pegged to the US
dollar, driving up the cost of living locally. This global
financial center is followed by Tokyo (2), Singapore (3), Seoul
(4), Shanghai (6), and Ashgabat, Turkmenistan (7).
Mumbai (67) is India’s most expensive city, followed by New
Delhi (118) and Chennai (154). Bengaluru (179) and Kolkata (189)
are the least expensive Indian cities ranked. Elsewhere in Asia,
Bangkok (40) jumped twelve places from last year. Hanoi (112) and
Jakarta (105) also rose in the ranking, up twenty-five and twelve
spots, respectively. Bishkek (206) and Tashkent (208) remain the
region’s least expensive cities for expatriates.
Australian cities have continued to fall in the ranking due to
the depreciation of the local currency against the US dollar.
Sydney (50), Australia’s most expensive ranked city for
expatriates, dropped twenty-one places. Melbourne (79) and Perth
(87) dropped twenty-one and twenty-six spots, respectively.
Mercer produces individual cost of living and rental
accommodation cost reports for each city surveyed. For more
information on city rankings, visit
https://mobilityexchange.mercer.com/Insights/cost-of-living-rankings.
To purchase copies of individual city reports, visit
https://mobilityexchange.mercer.com/multinational-approach-cost-of-living-data
or call Mercer Client Services at +48 22 434 5383.
Notes for editors
The figures for Mercer’s cost of living and rental accommodation
cost comparisons are derived from a survey conducted in March 2019.
Exchange rates from that time and Mercer’s international basket of
goods and services from its Cost of Living Survey have been used as
base measurements.
Governments and major companies use data from this survey to
protect the purchasing power of their employees when transferred
abroad; rental accommodation costs data is used to assess local
expatriate housing allowances. The choice of cities surveyed is
based on demand for data.
About Mercer
Mercer delivers advice and technology-driven solutions that help
organizations meet the health, wealth and career needs of a
changing workforce. Mercer’s more than 23,000 employees are based
in 44 countries and the firm operates in over 130 countries. Mercer
is a wholly owned subsidiary of Marsh & McLennan Companies
(NYSE: MMC), the leading global professional services firm in the
areas of risk, strategy and people. With 75,000 colleagues and
annualized revenue approaching $17 billion through its
market-leading companies including Marsh, Guy Carpenter and Oliver
Wyman, Marsh & McLennan helps clients navigate an increasingly
dynamic and complex environment. For more information, visit
www.mercer.com. Follow Mercer on Twitter @Mercer.
Mercer also provides advice and market data on international and
expatriate compensation management, and works with multinational
companies and governments worldwide. It maintains one of the most
comprehensive databases on international assignment policies;
compensation practices; and data on worldwide cost of living,
housing, and hardship allowances. Its annual global mobility
conferences and other events provide companies with the latest
trends and research on mobility issues. Visit
https://mobilityexchange.mercer.com/ for details. Follow Mercer’s
mobility news on Twitter @Mercer.
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version on businesswire.com: https://www.businesswire.com/news/home/20190626005165/en/
Miriam Siscovick + 1 206 356 8549
miriam.siscovick@mercer.com
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