What impact does cost of living have on your mobility program?

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: 

1. Companies will continue sending employees on overseas assignments.
2. 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

1. Caracas, Venezuela
2. Zurich, Switzerland
3. Geneva, Switzerland
4. Basel, Switzerland
5. 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!