Mercer’s 22nd annual Cost of Living Survey released

Despite volatile global markets and growing security issues, organisations continue to leverage global expansion strategies to remain competitive and to grow. Yet few organisations are prepared for the challenges world events have on their business, including the impact on cost of expatriate packages. Mercer’s 22nd annual Cost of Living Survey finds that factors including currency fluctuations, cost inflation for goods and services, and instability of accommodation prices contribute to the cost of expatriate packages for employees on international assignments.

According to Mercer’s 2016 Cost of Living Survey, Hong Kong tops the list of most expensive cities for expatriates, pushing Luanda, Angola to second position. Zurich and Singapore remain in third and fourth positions, respectively, whereas Tokyo is in fifth, up six places from last year. Kinshasa, ranked sixth, appears for the first time in the top 10, moving up from thirteenth place.

Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Shanghai (7), Geneva (8), N’Djamena (9) and Beijing (10). The world’s least expensive cities for expatriates, according to Mercer’s survey, are Windhoek (209), Cape Town (208) and Bishkek (207).

Mercer’s widely recognised survey is one of the world’s most comprehensive and is designed to help multinational companies and governments determine compensation strategies 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 more than 375 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.

“Maximising return on investment with fewer resources and talent shortages worldwide makes growth initiatives more difficult for multinationals,” said Ilya Bonic, Senior Partner and President of Mercer’s talent business. “Organisations must ensure they can facilitate the moves they need to drive business results by offering fair and competitive compensation packages.”

Bonic added that costs of goods and services shift with inflation and currency volatility making overseas assignment costs sometimes greater and sometimes smaller. Low levels of inflation have translated into fairly steady cost increases around the world.

Mercer produces individual cost of living and rental accommodation cost reports for each city surveyed. For more information on city rankings, visit mercer.com/col. To purchase copies of individual city reports, visit imercer.com/products/cost-of-living.aspx.