Hong Kong remains costliest expat city

Hong Kong has retained its No 1 spot as the most expensive city for expats to live in, according to Mercer's 2020 Cost of Living survey.

The survey, designed as a guide to enable companies to determine the cost of packages for employees on international assignments, found that six of the top 10 most expensive cities for expats were in Asia.The political instability in Hong Kong had had little effect on costs, Mercer found, while Ashgabat in Turkmenistan occupied second spot with Tokyo third. Tunis was ranked cheapest of the 209 cities surveyed.Measures in the survey include the comparative cost of more than 200 items in each city, including housing, transportation, food, clothing, household goods and entertainment.This year's survey found that specific factors such as currency fluctuations, cost inflation for goods and services, and instability of accommodation prices were essential elements in determining the cost of expatriate packages.And this year, of course, there has been the coronavirus outbreak. "The Covid-19 pandemic reminds us that sending and keeping employees on international assignments is a huge responsibility and a difficult task to manage," said Ilya Bonic, head of Mercer Strategy."Rather than bet on a dramatic resurgence of mobility, organisations should prepare for the redeployment of their mobile workforces, leading with empathy and understanding that not all expatriates will be ready or willing to go abroad."Kate Fitzpatrick, Mercer's global mobility practice leader for the UK and Ireland, added that the company's research had shown that most expatriates out on assignment had chosen to stay in their host countries during the pandemic lockdown."Some temporarily returned to their home country or travelled elsewhere, but wherever possible have continued to work remotely," she said, adding that companies would need to closely monitor how currency fluctuations had impacted expat cost of living and, if necessary, adjust compensation packages."Cost savings will also remain high on the agenda as companies decide when and where to send employees on assignment," Ms Fitzpatrick said.Singapore in fifth spot, Shanghai (7th) and Beijing (10th) made up the other Asian cities in the top 10 while three Swiss cities - Zurich, Bern and Geneva - also made it to the top of the rankings. New York, in sixth place, rounded off the top 10.London rose four places from last year to occupy 19th in the rankings while other UK cities, including Birmingham, Glasgow and Belfast, all edged up the table slightly. Ms Fitzpatrick said: "The position of UK cities remained relatively stable year-on-year as the pound held its own against the US dollar."Dublin, in 46th place, emerged as the highest ranked eurozone city, mainly as a result of high rental prices.Noel O'Connor, senior career consultant at Mercer Ireland, said that the challenging circumstances arising from the Covid-19 pandemic meant that, now more than ever, organisations needed to support their expatriate workforces.He said that despite an appetite to grow globally while navigating the uncharted waters of a health and economic crisis, reductions in staff and salaries as well as changes to benefit programmes have challenged overseas expansion strategies."As organisations re-examine talent portfolios, mobility programmes, and remuneration packages with a keen eye that balances empathy with economics, accurate and transparent data is essential to compensate fairly for all types of mobility assignments, taking into account changes resulting from the current pandemic and subsequent market volatility," he said.Top 20 most expensive cities:
1. Hong Kong
2. Ashgabat
3. Tokyo
4. Zurich
5. Singapore
6. New York
7. Shanghai
8. Bern
9. Geneva
10. Beijing
11. Seoul
12. Tel Aviv
13. Shenzhen
14. Victoria, Seychelles
15. Ndjamena
16. San Francisco
17. Los Angeles
18. Lagos
19. London
20. Guangzhou

Read more news and views from David Sapsted.

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