Dive Brief:

• Just as foreign exchange costs create headwinds for many multinational organizations, currency fluctuations – driven by economic and political unrest – are contributing to the cost of expatriate packages.

• In fact, Mercer’s recently released 21st annual Cost of Living Survey found that factors including instability of housing markets and inflation for goods and services impact significantly the overall cost of doing business globally.

• According to Mercer’s survey, Asian and European cities – particularly Hong Kong (2), Zurich (3), Singapore (4), and Geneva (5) – top the list of most expensive cities for expatriates. The costliest city for the third consecutive year is Luanda, the capital of Angola. New York City, at 16, is the costliest city in the Americas.

Dive Insight:

As the global economy has become increasingly interconnected, close to 75% of multinational organizations are expecting long-term expatriate assignments to remain stable or increase to address business needs, notes Ilya Bonic, senior partner and president of Mercer’s Talent business. He adds that sending employees abroad is necessary to compete in markets and for critical talent, and employers need a reliable and accurate reflection of the cost to their bottom line.

“Aligning workforce and mobility strategies by ensuring the right employees are in the right places is more critical than ever to manage globalization,” said Bonic.

According to Bonic, this is especially important for emerging mobility programs with smaller pools of candidates and higher business needs for sending employees on international assignments. It is essential that these organizations have accurate and transparent data as they consider how to compensate fairly and in line with market demands.