As companies continue to try out new strategies and models to facilitate the movement of talent across borders (shorter assignments, use of third-country nationals, extended business trips, shared responsibilities, etc.) two key truths remain in place:
- Companies will continue sending employees on overseas assignments.
- The cost of those assignments continues to be a top concern and a big pill to swallow.
Spend is always a primary consideration and top challenge for mobility programs. When analyzing the cost of your expatriate assignment programs, there are many areas to consider. One of those areas, cost of living, was just recently highlighted in the article, "Dublin enters top 100 most expensive cities in the world." Placing expatriates into high cost of living locations will have a significant impact on the cost to the program, and at the same time, many companies find the greatest need for talent in those same locations. Host country housing, taxes and cost of living are three of the biggest elements in most expatriate packages.
ECA International has just released its annual Cost of Living report, revealing the most expensive cities in the world to live. Caracas moved to the top of the list highlighting the fact that the city has experienced 7000% inflation. One of the biggest movers was Dublin, which moved from 120th last year up 48 places to become the 72nd most expensive city in the world for placing expatriates. Because of the strength of the euro, Dublin was one of 18 European cities to pop into the top 100. Central London however remains outside that top 100 after having fallen out last year.
There were three U.S. cities (Manhattan at 30th, Honolulu at 40th, and New York City at 46th) that remained in the top 50 although many fell out due to the drop in the U.S. dollar.
Top 5 most expensive locations
- Caracas, Venezuela
- Zurich, Switzerland
- Geneva, Switzerland
- Basel, Switzerland
- Bern, Switzerland
Cost of living indices are used to calculate cost of living allowances for assignees. The ECA survey covers:
Food: Groceries; dairy produce; meat and fish; fresh fruit and vegetables
Basic: Household goods; recreational goods; general services; leisure services
General: Clothing; electrical goods; motoring; meals out; alcohol and tobacco
Certain living costs such as accommodation rental, utilities charges (electricity, gas and water), car purchases and school fees are not included in the survey.
Check out our Mobility Challenges Today Infographic for more ideas to consider on reducing mobility spend and for spending smarter!
7,000 per cent inflation Although Manhattan (30th), Honolulu (40th) and New York City (46th) remain in the top 50, the drop in value of the US dollar has caused cities across the US to fall in the rankings. Greenwich (105th), Las Vegas (107th) and Boston (108th) each fell out of the top 100 most expensive cities for the first time in four years. “The weakness of the US dollar in the face of slower than expected tightening of monetary policy has made the US cheaper for foreign workers and also made it more expensive for US citizens moving abroad,” said Kilfedder.