Asia dominates the list of the world’s most costly cities for expatriates, despite significant shifts — including a big drop of 11 points for Bangkok to 46th place — according to the global human resources consultancy Mercer.
Hong Kong lost top spot — a position it held for the past three years — to Ashgabat, Turkmenistan, now the costliest city for international employees, both in Asia and globally, in the Cost of Living Survey by Mercer.
Tokyo, now ranked fourth, was leapfrogged by Beirut, which climbed 42 positions to third, as a result of a severe economic depression linked to a financial crisis and Covid-19.
Shanghai and Beijing ranked sixth and ninth, respectively, up one place from last year, while Singapore moved from fifth place to seventh. Three cities in Switzerland — Zurich (5), Geneva (8) and Bern (10) — rounded out the top 10.
Cities across mainland China also grew more expensive, buoyed by currency appreciation against the US dollar and a swift recovery from the impact of the pandemic. Most notably, Tianjin and Chengdu each climbed 12 positions to 26th and 28th, respectively.
The strengthening of the Taiwanese dollar pushed Taipei up six places to 22nd. Currency fluctuations and deflation resulted in Southeast Asian cities including Bangkok and Kuala Lumpur dropping in the rankings. Bangkok (46) fell 11 places, while Kuala Lumpur (152) was down 8 places
Mumbai (78) is India’s most expensive city but dropped 18 places due to a relatively weak rupee.
The annual Mercer survey is designed to help multinational firms and governments determine compensation for their expatriate employees. New York City is used as the base city for comparisons and currency movements are measured against the US dollar.
This year’s ranking includes 209 cities and measures the comparative cost of more than 200 items including housing, transport, food, clothing, household goods and entertainment.
One significant trend Mercer has observed since the pandemic began relates to how companies deal with mobility.
The concept is evolving from traditional long-term assignments — such as relocating an employee for a few years then repatriating them to their home location — to other kinds of moves such as short-term assignments, international foreign hires, permanent transfers, commuters, international remote workers and international freelancers.
Another Mercer survey found that over 50% of employers surveyed expected changes in terms of the number of one-way transfers, talent development, short-term and commuter assignments in their organisations due to the pandemic.
“Across the region, companies are actively reassessing their talent and mobility strategies in light of the complex challenges brought on by Covid-19,” said Julia Radchenko, Mercer’s global mobility leader for Asia Pacific.
“And it is no longer about just geographical mobility, it is about talent mobility which implies lateral moves, a distributed workforce, geographical mobility, international remote working, virtual assignments, etc.”
“What we’ve seen is that companies are exercising more flexibility to accommodate the different personal situations of employees. Broadly speaking, companies are now more open to international remote working arrangements, allowing employees to perform the same role remotely as they would if they were to relocate,” she said.
“That said, international remote working arrangements bring with them other complexities such as determining the right compensation and whether such arrangements can fully replicate the importance and impact of having someone in a specific market.” – Bangkok Post