Amplified by the global health crisis and the conflict in Ukraine, skyrocketing inflation and currency volatility are affecting international economic balances and the cost of living for each of us. For organizations with globally distributed workforces, assessing and managing the impact on their employees’ financial wellbeing may be particularly complex.
Mercer’s Cost of Living Survey provides employers with current, extensive and reliable data to help them navigate compensation strategies for their mobile employees in the unpredictable global markets.
So what are the most expensive cities in the world for international employees?
Hong Kong tops Mercer’s 2022 Cost of Living city ranking, based on our latest research, followed by Zurich and Geneva, while Ankara closes the ranking at the 227th spot.
Check out the full ranking below and visit our Newsroom for more local insights in the press releases.
1. Hong Kong, Hong Kong (SAR)
2. Zurich, Switzerland
3. Geneva, Switzerland
View the full city ranking
|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|
…and what it means for purchasing power across markets.
With the recent return of high inflation across the globe, employees are increasingly concerned about their purchasing power, resulting in salary increase expectations. Companies, on the other hand, need to strike a delicate balance between controlling their costs while struggling to attract and retain talent.
Addressing these issues with regard to internationally mobile employees is a complex and significant challenge for multinational employers.
Both inflation and exchange rate fluctuations directly influence the purchasing power of mobile employees. International assignees remunerated using a home-country (balance sheet) approach typically receive a cost-of-living allowance to maintain their purchasing power in their assignment destinations based on cost-of-living index differentials. Exchange rate changes and inflation differentials can push the cost-of-living indices in the same direction or they can counter-balance each other. In recent years exchange rate fluctuations have had a greater effect on cost-of-living indices than inflation, except in some emerging countries with hyper-inflation. This is no longer the case due to high inflation in developed economies. In 2022, both inflation and exchange rates have an important impact on fluctuations of cost-of-living indices.
Employers may adopt various strategies to protect the purchasing power of their international workforce in times of market volatility, but it’s important that they understand the advantages and disadvantages of the different approaches. The consequences of their decisions will impact both the business and the financial wellbeing of their employees. Mercer has created a practical guide that can help you understand and navigate this complexity.
Cost of living is one of the key factors of city attractiveness for international talent, business and investments, but what do we learn when we also take quality of living into account?
Competition among cities is fierce, especially in times of galloping inflation hitting the majority of locations around the world. Which cities are currently best positioned to attract and retain top talent and international businesses?
A city’s attractiveness is based on a number of factors, and while the cost of life is clearly an important one, other components include the affordability of housing, the quality of life based on a range of factors such as safety, sanitation, eco-friendliness or education standards, as well as governance and taxation considerations.
The infographic on the right shows the results of our analysis that takes into account a combination of selected factors, drawing on Mercer’s latest cost of living and quality of living research.
How can you ensure your mobile employees stay happy and efficient in the
In a recent webinar, our consultants shared highlights of Mercer’s latest global cost of living and quality of living research, and what it means for organizations and cities looking to attract and retain international talent.
Mercer’s annual Cost of Living city ranking is based on our Cost of Living data research - one of the most recognized and extensive surveys of its kind, encompassing over 400 cities around the world. Carried out twice per year, the survey is designed to help multinational companies and governments around the world determine compensation strategies for their expatriate employees.
How we calculate the cost of living index
In addition to evaluating more than 200 goods and services, Mercer’s Cost of Living Survey highlights essential factors — such as currency fluctuations, cost inflation* and accommodation price instability — in determining the cost of packages for internationally mobile employees.
To help ensure the highest relevance of the data we provide, Mercer continuously keeps its Cost of Living Research methodology abreast with the latest trends, adjusting it to the international market developments and international assignees’ spending patterns.
Mercer inflation definition
Inflation is generally defined as the measure of price movements from time T to time T+1, using exactly the same specification of item in terms of packaging size and characteristics.
Therefore, for the purpose of Mercer’s Cost of Living survey, Mercer’s inflation quoted figure is designed to provide an indication of how the index has moved in the last six or 12 months in local currency terms, regardless of the currency fluctuations between the home and the host location.