Today, Mercer announced the results of its 2022 Cost of Living Survey. Toronto was the most expensive city in Canada, ranking 89th worldwide, followed by Vancouver, which came in at 108th. With global economic conditions and remote and flexible work evolving faster than ever, companies must carefully navigate compensation packages to ensure the resilience of their business and sustainability of their workforce.
Both inflation and exchange rate fluctuations directly influence mobile employees’ pay and savings. The rise of remote and flexible working has also caused many employees to reconsider their priorities, work-life balance, and the choice of location to live in. These conditions have serious consequences for employers, who need to rethink their approach to managing a globally distributed workforce, particularly in light tight labour markets.
Mercer’s cost of living data helps employers understand the importance of monitoring currency fluctuations and assessing the inflationary and deflationary pressures on goods, services and accommodation in all operating locations. The data also helps employers determine and maintain compensation packages for employees on international assignments and when working abroad.
“The volatility triggered by COVID-19 and further worsened by the crisis in Ukraine, has fueled global economic and political uncertainty. This uncertainty, coupled with significant rising inflation in most of the countries around the world, has international assignees concerned about their purchasing power and socio-economic stability,” said Yvonne Traber, Partner at Mercer and Global Head for the Mobility Business.
“For organizations, the financial wellbeing of employees is a key driver in their ability to attract and retain top talent and with reliable and relatable data, organizations can define clear strategies to structure mobility packages for international employees in unstable times”, added Traber.
Conversely, this situation also offers an opportunity for cities and governments looking to attract foreign business, and for businesses looking to attract talent. The cost of living in a location can have a significant impact on its attractiveness as a destination for talent, and influences site selection decisions for organizations expanding and transforming their geographic footprint.
“Although Canada continues to be a relatively affordable place to live and an attractive destination for remote workers, like other advanced economies, it is seeing significant price increases in goods and services,” said Nicole Stewart, Principal, Career at Mercer Canada. “In a highly inflationary environment where organizations and individuals have increased flexibility around their work locations, employers will need to ensure they have effective and responsive compensation and talent strategies to address the cost of living concerns of mobile employees.”
Mercer’s 2022 Cost of Living City Ranking found Hong Kong to be the most expensive city for international employees with four Swiss cities – Zurich, Geneva, Basel and Bern – taking the second through fifth spots respectively.
Other cities appearing in the top 10 of Mercer’s most costly cities for international employees are Tel Aviv, Israel (6), New York, United States (7), Singapore (8), Tokyo, Japan (9) and Beijing, China (10).
The world’s least expensive cities for international employees, according to Mercer’s survey, are Dushanbe, Tajikistan (225), Bishkek, Kyrgyzstan (226) and Ankara, Türkiye as the least costly city at 227.
The most expensive Canadian city is Toronto (89) followed by Vancouver (108), Montreal (125), and Ottawa (132). Calgary (141) was found to be the least expensive Canadian city listed for international employees.
New York City (7) remains the most expensive city in North America, followed by Nassau, Bahamas (16). The remaining 18 United States cities are ranked between 17th place and 112th place; Los Angeles (17), San Francisco (19), Honolulu (20), Washington (29), Chicago (36) and Cleveland (112).
In South America, Buenos Aires, Argentina (114) is ranked as the most expensive city in region, followed by Montevideo, Uruguay (123), Santiago, Chile (130), Quito, Ecuador (156), Sao Paulo, Brazil (168). Belo Horizonte in Brazil (210) is the least expensive city in South America. Managua (212) the capital of Nicaragua is the least expensive city in the Americas.
Four out of 10 most expensive cities to live in for the international assignees are located in Asia, including the single most expensive city in the world – Hong Kong, SAR (ranked 1). Singapore (8), Tokyo, Japan (9) and Beijing, China (10) are all on the top 10. The most expensive city in India is Mumbai ranked 127.
The most expensive city in Pacific is Noumea, New Caledonia (54) closely followed by Sydney, Australia (58). Auckland, New Zealand (95) is the most expensive city in New Zealand, and Wellington (120) the least expensive in the Pacific.
Four European cities are among the top 10 list of most expensive locations. All of those four are based in Switzerland, and Zurich being ranked second within the global ranking, as being the costliest within the European cities, closely followed by Geneva (3rd) and Basel (4th). Other cities in Europe are Copenhagen, Denmark (11), London, United Kingdom (15), Vienna, Austria (21) and Amsterdam, The Netherlands (25).
The most expensive cities in Eastern Europe is Prague, Czech Republic ranked 60th out 227 cities. It is followed by Riga, Latvia (79), Bratislava, Slovakia (105) and Tallinn, Estonia (140). The least expensive city in Eastern Europe is Sarajevo in Bosnia-Herzegovina ranked 209th.
Middle East and Africa
Tel Aviv, Israel is the costliest city in the Middle East for international employees, ranked on the sixth position within the global ranking. The next in line for this region are cities from the United Arab Emirates, namely Dubai (31) and Abu Dhabi (61). Saudi cities such as Riyadh (103) and Jeddah (111) rank in the middle, closely followed by Amman, Jordan (115) and Manama, Bahrain (117).
In Africa, Bangui, Central African Republic (23), Libreville, Gabon (24) and Victoria, Seychelles (38) are the three costliest cities. High in the ranking for this region we can also find Djibouti, Djibouti (41), Kinshasa, The Democratic Republic of the Congo (53) and Lagos, Nigeria (55). The cheapest city in Africa is Tunis, Tunisia ranked 220th.
About Mercer’s Cost of Living Survey
Mercer's widely recognized ranking is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation strategies for their international assignees. 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 400+ cities throughout the world; this year’s ranking includes 227 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. The data collected provides all of the key elements employers need to design efficient and transparent compensation packages for international assignees. Learn more here.
The figures for Mercer’s cost of living and rental accommodation cost comparisons are derived from a survey conducted in March 2022. 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 international assignee housing allowances. The choice of cities surveyed is based on demand for data from Mercer’s clients.
Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being. Mercer’s approximately 25,000 employees are based in 43 countries and the firm operates in 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with 83,000 colleagues and annual revenue of nearly $20 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment. For more information, visit mercer.ca. Follow Mercer on LinkedIn and Twitter.
|1||Hong Kong||Hong Kong (SAR)|
|7||New York City, NY||United States|
|17||Los Angeles, CA||United States|
|19||San Francisco, CA||United States|
|20||Honolulu, HI||United States|
|23||Bangui||Central African Republic|
|29||Washington, DC||United States|
|30||Boston, MA||United States|
|31||Dubai||United Arab Emirates|
|32||Miami, FL||United States|
|36||Chicago, IL||United States|
|42||Atlanta, GA||United States|
|45||Seattle, WA||United States|
|53||Kinshasa||The Democratic Republic Of The Congo|
|61||Abu Dhabi||United Arab Emirates|
|70||Philadelphia, PA||United States|
|72||San Juan||Puerto Rico|
|74||Brazzaville||The Republic Of Congo|
|75||Dallas, TX||United States|
|82||Pittsburgh, PA||United States|
|83||Minneapolis, MN||United States|
|85||Houston, TX||United States|
|91||Portland, OR||United States|
|101||St. Louis, MO||United States|
|107||Detroit, MI||United States|
|112||Cleveland, OH||United States|
|135||Port Of Spain||Trinidad & Tobago|
|139||San Jose||Costa Rica|
|157||Vientiane||Lao People'S Democratic Republic|
|163||Ho Chi Minh City||Vietnam|
|164||Dar Es Salaam||Tanzania|
|173||Santo Domingo||Dominican Republic|
|176||Rio De Janeiro||Brazil|
|179||Bandar Seri Begawan||Brunei|
|182||San Salvador||El Salvador|
|194||Cape Town||South Africa|
Source: Mercer’s 2022 Cost of Living Survey