Organisations revamp mobility programmes with alternate forms of international assignments and a focus on employee well-being



9th June 2020


  • Hong Kong retains top spot as most expensive destination for expatriates in Asia and globally
  • In the UK, London (19) ranks highest, followed by Birmingham (129), Aberdeen (134), Glasgow (141) and Belfast (149)
  • Mercer’s 26th annual Cost of Living Survey helps employers navigate expatriate packages, essential due to uncertainty from pandemic 


In the wake of COVID-19, social and economic disruption has spurred organisations to reassess their global mobility programmes with a focus on the well-being of their expatriate employees. As they leverage new working arrangements, changing technology, and adaptive ways of thinking, they are considering alternate forms of international assignments in addition to traditional mobility programmes to sustain their overseas operations and workforces.


Despite an appetite to grow and scale globally while navigating the uncharted waters of a health and economic crisis, reductions in staff and salaries as well as changes to benefit programmes have challenged overseas expansion strategies. As organisations re-examine talent portfolios, mobility programmes, and remuneration packages with a keen eye that balances empathy with economics, accurate and transparent data is essential to compensate fairly for all types of mobility assignments, taking into account changes resulting from the current pandemic and subsequent market volatility.


Mercer’s 26th annual Cost of Living Survey finds that specific factors such as currency fluctuations, cost inflation for goods and services, and instability of accommodation prices, are essential to determining the cost of expatriate packages for employees on international assignments.


“The COVID-19 pandemic reminds us that sending and keeping employees on international assignments is a huge responsibility and a difficult task to manage,” said Ilya Bonic, Career President and Head of Mercer Strategy. “Rather than bet on a dramatic resurgence of mobility, organisations should prepare for the redeployment of their mobile workforces, leading with empathy and understanding that not all expatriates will be ready or willing to go abroad.”


In the short-term, preparation for this new approach to global mobility may involve re-relocating assignees who have been repatriated. In the medium-term, the priority will be about realigning the mobile workforce with new economic models focused on shortened supply chains, more regional moves and a renewed need to train talent. In addition to these concerns, relevant information about the cost and location of assignments worldwide will be a critical factor post-crisis.


Mercer’s 2020 Cost of Living Survey


According to Mercer’s 2020 Cost of Living Survey, Hong Kong tops the list of most expensive cities for expatriates, followed by Ashgabat, Turkmenistan in second position. Tokyo and Zurich remain in third and fourth positions, respectively, whereas Singapore is in fifth, down two places from last year. New York City ranked sixth, moving up from ninth place. Mercer’s data was collected in March; price variances in many locations were not significant due to the pandemic[1].


Other cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Shanghai (7), Bern (8), Geneva (9), and Beijing (10). The world’s least expensive cities for expatriates, according to Mercer’s survey, are Tunis (209), Windhoek (208), Tashkent and Bishkek, which tied to rank 206.


Mercer's widely recognised survey is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation strategies for their expatriate employees. 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 209 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.


“Border closings, flight interruptions, mandatory confinements, and other short-term disruptions have affected not only the cost of goods and services, but also the quality of living of assignees,” said Mr. Bonic. “Climate change, issues related to environmental footprint, and health system challenges have pushed multinationals to consider how a city’s efforts around sustainability can impact the living conditions for their expatriate workers. Cities with a strong sustainability focus can greatly improve living standards, which can in turn improve employee well-being and engagement.”


Properly vetting locations and compensating employees on international assignments is as important as it can be costly. Mercer’s survey shows that costs of goods and services shift with inflation and currency volatility making overseas assignment costs sometimes greater and sometimes smaller.


“Sudden changes to exchange rates has been mainly driven by the impact COVID-19 is having on the global economy,” said Yvonne Traber, Global Mobility Product Solutions Leader at Mercer. “This volatility can affect mobile employees in a variety of ways, from shortages and price adjustments for goods and services, to supply chain disruptions or when employees are paid in home country currency and need to exchange funds into the host country for local purchases.”




Three European cities are among the top 10 list of most expensive locations. At number four in the global ranking, Zurich remains the most costly European city, followed by Bern (8), up four spots from last year. The next European city in the ranking, Geneva (9), is up four places from last year. 


Despite some low price increases across the region, several local currencies in Europe have weakened against the US dollar, pushing many cities down in the ranking. As France and Italy's economies shrank at the end of 2019, Eurozone growth came close to zero. Yet, there are no signs of crisis when it comes to inflation in any of the leading EU countries. The region saw cities like Paris (50), Milan (47) and Frankfurt (76) drop in this year’s ranking.


A decision by the United Kingdom to leave the European Union has not impacted its local currency which remains strong, gaining value to all major global currencies. In the UK London (19) ranked highest, followed by  Birmingham (129), Aberdeen (134), Glasgow (141) and Belfast (149). London, Birmingham and Belfast also jumped four, six, and nine places, respectively this year.


“The position of UK cities remained relatively stable year-on-year as the pound held its own against the US dollar,” said Kate Fitzpatrick, Mercer’s Global Mobility Practice Leader for the UK & Ireland.


Commenting on the impact of the COVID-19 on companies and their expatriate workers, Ms Fitzpatrick said: “Our research has shown that most expatriates out on assignment chose to stay in their host location during the pandemic lockdown period. Some temporarily returned to their home country or travelled elsewhere, but wherever possible have continued to work remotely. So while the deployment of assignees has been suspended temporarily, companies have shifted their focus to ensuring their expats are safe, secure and set up for remote working.


“Looking ahead to when travel can resume, there is a broad expectation that those expatriates out of position will return to their host locations to see out their original assignment periods, and new assignments will commence as originally planned. Companies therefore need to closely monitor how fluctuations in currencies have impacted expat cost of living and if necessary adjust their compensation packages. Cost savings will also remain high on the agenda as companies decide when and where to send employees on assignment”.


The Middle East and Africa

The United Arab Emirates continue to diversify the economy, subsequently reducing the impact of oil industry on GDP. With this ongoing process, there has been negative price movement in both Dubai and Abu Dhabi. Just like UEA, Saudi Arabia is seeking to limit the impact of oil exports and move to a more diversified economic model. Prices have remained stable over the course of the last six months; however, with the upcoming value-added tax increase there is an expectation to see prices change. Tel Aviv (12) continues to be the most expensive city in the Middle East for expatriates, followed by Dubai (23), Riyadh (31), and Abu Dhabi (39). Cairo (126) remains the least expensive city in the region despite rising forty places.


Ndjamena, Chad (15) is the highest ranked city in Africa while Tunis (209) in Tunisia ranks as the least expensive city in the region and globally.


The Americas


While the global economic downturn took hold during the first part of the year, the strength of the dollar drove up costs for expatriates in US cities. As a result, cities in the United States have climbed in this year’s ranking of most costly cities. New York (6) is the highest-ranked city in the country followed by San Francisco (16) Los Angeles (17) Honolulu (28) and Chicago (30). Winston Salem, North Carolina (132) remains the least expensive US city surveyed for expatriates.


In South America, San Juan (66) ranks as the costliest city, followed by Port of Spain (73), San Jose (78) and Montevideo (88). Managua (198) is the least expensive city in South America. Caracas in Venezuela is excluded from the ranking due to the complex currency situation; its ranking would have varied greatly depending on the official exchange rate selected.


The Canadian dollar has appreciated in value, triggering jumps in this year’s ranking. Up eighteen places from last year, Vancouver (94) is the most expensive Canadian city in the ranking, followed by Toronto (98). Ranking 151, Ottawa is the least expensive city in Canada.


Asia Pacific


Six of the top 10 cities in this year’s ranking are in Asia. Hong Kong (1) retained its spot as the most expensive city for expatriates both in Asia and globally due to currency movements measured against the US dollar and driving up the cost of living locally. This global financial centre is followed by Ashgabat (2) Tokyo (3) Singapore (5) Shanghai (7) and Beijing (10). Mumbai (60) is India’s most expensive city while Kolkata (185) is the least expensive Indian city ranked.


Australian cities have fallen in the ranking this year as the local currency has depreciated against the US dollar. Sydney (66), Australia’s most expensive ranked city for expatriates, experienced a drop of sixteen places. The least expensive city in the region, Adelaide fell seventeen places to rank 126.


Mercer produces individual cost of living and rental accommodation cost reports for each city surveyed. For more information on city rankings, visit To purchase copies of individual city reports, visit


[1] Due to timing of the COVID-19 outbreak, Mercer conducted further analysis on availability of goods in April and May to verify pricing.


Notes to Editors


The figures for Mercer’s cost of living and rental accommodation cost comparisons are derived from a survey conducted in March 2020. 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 expatriate housing allowances. The choice of cities surveyed is based on demand for data.


About Mercer


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 more than 25,000 employees are based in 44 countries and the firm operates in over 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 76,000 colleagues and annual revenue of $17 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 Follow Mercer on Twitter @UKMercer. In the UK, Mercer Limited is authorised and regulated by the Financial Conduct Authority.