- Vienna takes the top spot globally,
Baghdad ranks lowest
- San Francisco is the top-ranked city in
the United States, Detroit ranks lowest
- Personal safety key factor in
determining expat quality of living
- Luxembourg ranks highest for personal
safety; Baghdad lowest
Despite recent security issues, social unrest, and concern about
the region’s economic outlook, European cities continue to offer
some of the world’s highest quality of living, according to
Mercer’s 18th annual Quality of Living Survey. Safety, in
particular, is a key factor for multinationals to consider when
sending expatriate workers abroad, both because it raises concerns
about the expat’s personal safety and because it has a significant
impact on the cost of global compensation programs.
“Heightened domestic and global security threats, population
displacement resulting from violence, and social unrest in key
business centers around the world are all elements adding to the
complex challenge facing multinational companies when analyzing the
safety and health of their expatriate workforces,” said Ilya Bonic,
Senior Partner and President of Mercer’s Talent business.
“Multinational companies need accurate data and objective methods
to determine the cost implications of deteriorating living
standards and personal safety issues when compensating
expatriates.”
Vienna continues its reign in the top spot for overall quality
of living, followed by Zurich (2), Auckland (3), and Munich (4).
Vancouver (5) is North America’s highest ranking city, and
Singapore is the highest ranking Asian city, holding 26th place.
Mercer’s survey also identifies the personal safety ranking for the
full list of cities; it is based on internal stability, crime
levels, performance of local law enforcement, and the home
country’s relationship with other countries. Luxembourg tops the
personal safety list and is followed by Bern, Helsinki, and Zurich
– all tied in 2nd place. Baghdad (230) and Damascus (229) are the
world’s least safe cities, according to the ranking.
Mercer’s authoritative survey is one of the world’s most
comprehensive, and is conducted annually to enable multinational
companies and other employers to compensate employees fairly when
placing them on international assignments. Employee incentives
include a quality-of-living allowance and a mobility premium.*
Mercer’s Quality of Living Survey provides valuable data as well as
hardship premium recommendations for over 450 cities throughout the
world; this year’s ranking includes 230 of these cities.
“Ensuring that the needs of expatriates and their families are
met wherever work takes them is an essential part of talent
retention and recruitment strategies for most multinationals,” said
Slagin Parakatil, Principal at Mercer responsible for the quality
of living research. “Managing safety and health issues is of utmost
importance, especially for employees who relocate with a family.
Our surveys enable companies to take adequate precautions for
them.
Mr. Parakatil added, “Other elements that add to safety costs in
the host location are obtaining suitable and well secured
accommodation; having an in-house comprehensive expatriate security
program and providing access to reputable professional evacuation
services and medical support firms, and finally, providing security
training and guarded office premises.”
Americas
Quality of living remains high in North America, where Canadian
cities dominate the top of the list. Vancouver (5) is the highest
ranking city, followed by Toronto (15) and Ottawa (17). In the
United States, San Francisco (28) ranks highest for quality of
living, followed by Boston (34), Honolulu (35), Chicago (43), and
New York City (44). In Mexico, Monterrey (108) is the highest
ranking city. The lowest ranking cities in North America are
Monterrey (108) and Mexico City (127) and for the Caribbean, Havana
(191) and Port-au-Prince (227). In South America, Montevideo (78),
Buenos Aires (93), and Santiago (94) remain the highest ranking
cities for quality of living, whereas Bogota (130), La Paz (156),
and Caracas (185) rank lowest.
Canadian cities all rank high for personal safety, with Calgary,
Montreal, Ottawa, Toronto, and Vancouver sharing 16th place.
Kingston (199), Tegucigalpa (201), and Port-au-Prince (211) have
the lowest levels of personal safety in the region. In 96th place,
Montevideo is South America’s highest ranking city for personal
safety; Caracas (214) is the lowest.
Steve Nurney, Leader of Mercer’s Global Mobility Practice for
North America, explained, “Most North American cities remain fairly
safe for expatriates. But Mexican cities are ranked relatively low,
mainly because of drug-related violence. The recent increase of
unemployment in Latin America and Caribbean countries, along with
the economic downturn and political instability in some of these
countries, explains relatively low rankings in personal safety
across the region.”
Europe
Despite economic uncertainties, Western European cities continue
to enjoy some of the highest quality of living worldwide; they fill
seven places in the top 10 list. Vienna continues to lead the
ranking and has done so in the last seven published rankings. It is
followed by Zurich (2), Munich (4), Dusseldorf (6), Frankfurt (7),
Geneva (8), and Copenhagen (9). In 69th place, Prague is the
highest ranking city in Central and Eastern Europe, followed by
Ljubljana (76) and Budapest (77). The lowest ranking cities in
Europe are Kiev (176), Tirana (179), and Minsk (190).
European cities also dominate the top of the personal safety
ranking with Luxembourg in the lead, followed by Bern, Helsinki,
and Zurich, which are tied for the number two spot. Vienna ranks
5th Geneva and Stockholm are placed jointly in 6th and Copenhagen,
Dusseldorf, Frankfurt, Munich, and Nurnberg all share 11th place. A
number of key or capital cities rank considerably lower as many
suffered either terrorist attacks or social unrest in the last few
years; examples include Paris (71), London (72), Madrid (84), and
Athens (124).The recent political and economic turmoil in Greece,
which resulted in violent demonstrations in Athens and other cities
in the country, has undermined its safety ranking. Kiev (189), St.
Petersburg (197), and Moscow (206) rank lowest for personal safety
in the region.
Asia-Pacific
The vast region of Asia has considerable variation in quality of
living. In 26th place, Singapore remains its highest ranking city,
whereas Dhaka (214) is the lowest. Following Singapore in
Southeastern Asia is Kuala Lumpur (86). Other key cities include
Bangkok (129), Manila (136), and Jakarta (142). Japanese cities
rank highest in Eastern Asia, with Tokyo in 44th place. Other
notable cities are Hong Kong (70), Taipei (84), Shanghai (101), and
Beijing (118).
For personal safety, the rankings for Asian cities again vary
greatly. Singapore (8) ranks highest overall and is followed by
five Japanese cities—Kobe, Nagoya, Osaka, Tokyo, and Yokohama—that
are tied for 32nd place. Other key cities include Hong Kong (37),
Taipei (78), Beijing (97), Seoul (115), New Delhi (142), and
Jakarta (172). Following considerable political unrest and
terrorist attacks in several tourist areas over the last few years,
Bangkok ranked 173rd for personal safety.
New Zealand and Australia have some of the highest quality of
living worldwide. Auckland ranks 3rd globally, Sydney 10th,
Wellington 12th, and Melbourne 15th. For personal safety, Pacific
cities also rank high, with Auckland and Wellington sharing 9th
place. Canberra, Melbourne, Perth, and Sydney share 25th place.
Middle East and Africa
Dubai (75) continues to rank highest for quality of living
across Africa and the Middle East, followed by Abu Dhabi (81) and
Port Louis (83) in Mauritius. The South African cities of Durban,
Cape Town, and Johannesburg rank 85th, 92nd, and 95th,
respectively. Baghdad (230) ranks lowest regionally and
worldwide.
Only a handful of cities in this region place in the top 100 for
personal safety with Abu Dhabi ranking highest in 23rd place,
followed by Muscat (29), Dubai (40), and Port Louis (59). The
upcoming host of the 2022 FIFA World Cup, Doha, ranks 70th for
personal safety. Regional geopolitics is highly volatile and
characterised by safety concerns, political turmoil, and an
elevated risk of terrorism. The lowest ranking cities in the region
are Damascus (229) and Baghdad (230), both of which have witnessed
continual violence and terrorist attacks that weigh upon the daily
life of locals and expatriates.
Notes to Editors
Mercer produces worldwide quality-of-living rankings annually
from its Worldwide Quality of Living Surveys. Individual reports
are produced for each city surveyed. Moreover, comparative
quality-of-living indexes between a base city and host city are
available, as are multiple-city comparisons. Details are available
from Mercer Client Services in Warsaw, at +48 22 434 5383 or at
www.mercer.com/qualityofliving.
The data was largely analyzed between September and November
2015, and it will be updated regularly to account for changing
circumstances. In particular, the assessments will be revised to
reflect significant political, economic, and environmental
developments.
The information and data obtained through the Quality of Living
reports are for information purposes only and are intended for use
by multinational organizations, government agencies, and
municipalities. They are not designed or intended for use as the
basis for foreign investment or tourism. In no event will Mercer be
liable for any decision made or action taken in reliance of the
results obtained through the use of, or the information or data
contained in, the reports. While the reports have been prepared
based upon sources, information, and systems believed to be
reliable and accurate, they are provided on an “as-is” basis, and
Mercer accepts no responsibility/liability for the
validity/accuracy (or otherwise) of the resources/data used to
compile the reports. Mercer and its affiliates make no
representations or warranties with respect to the reports, and
disclaim all express, implied and statutory warranties of any kind,
including, representations and implied warranties of quality,
accuracy, timeliness, completeness, merchantability, and fitness
for a particular purpose.
Expatriates in Difficult Locations: Determining Appropriate
Allowances and Incentives
Companies need to determine expatriate compensation packages
rationally, consistently, and systematically using reliable data.
Providing incentives to reward and recognize the effort that
employees and their families make when taking on international
assignments remains a typical practice, particularly for difficult
locations.
Two common incentives include a quality-of-living allowance and
a mobility premium:
- A quality of living or “hardship”
allowance compensates for a decrease in the quality of living
between home and host locations.
- A mobility premium simply compensates
for the inconvenience of being uprooted and having to work in
another country.
A quality of living allowance is typically location-related,
while a mobility premium is usually independent of the host
location. Some multinational companies combine these premiums, but
the vast majority provides them separately.
Quality of Living: City Benchmarking
Mercer also helps municipalities to assess factors that can
improve their quality of living rankings. In a global environment,
employers have many choices about where to deploy their mobile
employees and set up new business. A city’s quality of living can
be an important variable for employers to consider.
Leaders in many cities want to understand the specific factors
that affect their residents’ quality of living and address those
issues that lower a city’s overall quality-of-living ranking.
Mercer advises municipalities by using a holistic approach that
addresses the goals of progressing towards excellence and
attracting both multinational companies and globally mobile talent
by improving the elements that are measured in its Quality of
Living survey.
Mercer Hardship Allowance Recommendations
Mercer evaluates local living conditions in more than 450 cities
surveyed worldwide. Living conditions are analyzed according to 39
factors, grouped in 10 categories:
1. Political and social environment (political stability, crime,
law enforcement, etc.).
2. Economic environment (currency exchange regulations, banking
services).
3. Socio-cultural environment (media availability and
censorship, limitations on personal freedom).
4. Medical and health considerations (medical supplies and
services, infectious diseases, sewage, waste disposal, air
pollution, etc.).
5. Schools and education (standards and availability of
international schools).
6. Public services and transportation (electricity, water,
public transportation, traffic congestion, etc.).
7. Recreation (restaurants, theatres, cinemas, sports and
leisure, etc.).
8. Consumer goods (availability of food/daily consumption items,
cars, etc.).
9. Housing (rental housing, household appliances, furniture,
maintenance services).
10. Natural environment (climate, record of natural
disasters).
The scores attributed to each factor, which are weighted to
reflect their importance to expatriates, permit objective
city-to-city comparisons. The result is a quality of living index
that compares relative differences between any two locations
evaluated. For the indices to be used effectively, Mercer has
created a grid that enables users to link the resulting index to a
quality of living allowance amount by recommending a percentage
value in relation to the index.
About Mercer
Mercer is a global consulting leader in talent, health,
retirement and investments. Mercer helps clients around the world
advance the health, wealth and careers of their most vital asset –
their people. Mercer’s more than 20,000 employees are based in 43
countries, and the firm operates in over 140 countries. Mercer is a
wholly owned subsidiary of Marsh & McLennan Companies (NYSE:
MMC), a global professional services firm offering clients advice
and solutions in the areas of risk, strategy, and people. With
annual revenue of $13 billion and 57,000 colleagues worldwide,
Marsh & McLennan Companies is also the parent company of Marsh,
a leader in insurance broking and risk management; Guy Carpenter, a
leader in providing risk and reinsurance intermediary services; and
Oliver Wyman, a leader in management consulting. For more
information, visit www.mercer.com. Follow Mercer on Twitter
@Mercer.
*Based on November 2015 survey
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version on businesswire.com: http://www.businesswire.com/news/home/20160223005610/en/
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206-356-8549miriam.siscovick@mercer.com
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