- Infrastructure is pivotal in
determining quality of living for expats and cities
- Vienna ranks highest for quality of
living for the 8th year in a row
- Singapore ranks first for city
infrastructure
- San Francisco top-ranked city in the
United States for quality of living, Atlanta ranks highest for city
infrastructure
Despite increased political and financial volatility in Europe,
many of its cities offer the world’s highest quality of living and
remain attractive destinations for expanding business operations
and sending expatriates on assignment, according to Mercer’s 19th
annual Quality of Living survey. City infrastructure, ranked
separately this year, plays an important role when multinationals
decide where to establish locations abroad and send expatriate
workers. Easy access to transportation, reliable electricity, and
drinkable water are all important considerations when determining
hardship allowances based on differences between a given assignee’s
home and host locations.
“Economic instability, social unrest, and growing political
upheaval all add to the complex challenge multinational companies
face when analysing quality of living for their expatriate
workforce,” said Ilya Bonic, Senior Partner and President of
Mercer’s Career business. “For multinationals and governments it is
vital to have quality of living information that is accurate,
detailed, and reliable. It not only enables these employers to
compensate employees appropriately, but it also provides a planning
benchmark and insights into the often-sensitive operational
environment that surrounds their workforce.
“In uncertain times, organizations that plan to establish
themselves and send staff to a new location should ensure they get
a complete picture of the city, including its viability as a
business location and its attractiveness to key talent,” Mr Bonic
added.
Vienna occupies first place for overall quality of living for
the 8th year running, with the rest of the top-ten list mostly
filled by European cities: Zurich is in second place, with Munich
(4), Dusseldorf (6), Frankfurt (7), Geneva (8), Copenhagen (9), and
Basel, a newcomer to the list, in 10th place. The only non-European
cities in the top ten are Auckland (3) and Vancouver (5). The
highest ranking cities in Asia and Latin America are Singapore (25)
and Montevideo (79), respectively.
Mercer’s survey also includes a city infrastructure ranking that
assesses each city’s supply of electricity, drinking water,
telephone and mail services, and public transportation as well as
traffic congestion and the range of international flights available
from local airports. Singapore tops the city infrastructure
ranking, followed by Frankfurt and Munich both in 2nd place.
Baghdad (230) and Port au Prince (231) rank last for city
infrastructure.
Mercer’s authoritative survey is one of the world’s most
comprehensive and is conducted annually to enable multinational
companies and other organizations to compensate employees fairly
when placing them on international assignments. In addition to
valuable data, Mercer’s Quality of Living surveys provide hardship
premium recommendations for over 450 cities throughout the world;
this year’s ranking includes 231 of these cities.
“The success of foreign assignments is influenced by issues such
as ease of travel and communication, sanitation standards, personal
safety, and access to public services,” said Slagin Parakatil,
Principal at Mercer and responsible for its quality of living
research. “Multinational companies need accurate and timely
information to help calculate fair and consistent expatriate
compensation – a real challenge in locations with a compromised
quality of living.”
Mr Parakatil added, “A city’s infrastructure, or rather the lack
thereof, can considerably affect the quality of living that
expatriates and their families experience on a daily basis. Access
to a variety of transportation options, being connected locally and
internationally, and access to electricity and drinkable water are
among the essential needs of expatriates arriving in a new location
on assignment. A well-developed infrastructure can also be a key
competitive advantage for cities and municipalities trying to
attract multinational companies, talent, and foreign
investments.”
Americas
In North America, Canadian cities take the top positions in the
ranking. Vancouver (5) is again the region’s highest ranking city
for quality of living. Toronto and Ottawa follow in 16th and 18th
place respectively, whereas San Francisco (29) is the highest
ranking US city, followed by Boston (35), Honolulu (36), New York
(44), and Seattle (45). High crime rates in Los Angeles (58) and
Chicago (47) resulted in these cities dropping nine and four places
respectively. Monterrey (110) is the highest ranking city in
Mexico, while the country’s capital, Mexico City, stands in 128th
position. In South America, Montevideo (79) ranks highest for
quality of living, followed by Buenos Aires (93) and Santiago (95).
La Paz (157) and Caracas (189) are the lowest ranking cities in the
region.
“Overall, there has been little change in the rankings for North
American cities,” said Steve Nurney, Partner with Mercer.
“Moreover, political and security issues along with natural
disasters continue to hamper quality of living in South and Central
American cities. Shortages of consumer goods have also added to a
decline in quality of living in this region.”
For city infrastructure, Vancouver (in 9th place) also ranks
highest in the region. It is followed by Atlanta and Montreal, tied
in 14th place. Overall, the infrastructure of cities in Canada and
the United States is of a high standard, including the airport and
bus connectivity, the availability of clean drinking water, and the
reliability of electricity supplies. Traffic congestion is a
concern in cities throughout the whole region. Tegucigalpa (208)
and Port-au-Prince (231) have the lowest scores for city
infrastructure in North America. In 84th place, Santiago is the
highest ranking South American city for infrastructure; La Paz
(168) is the lowest.
Europe
Even with political and economic turbulence, Western European
cities continue to enjoy some of the highest quality of living
worldwide. Still in the top spot, Vienna is followed by Zurich (2),
Munich (4), Dusseldorf (6), Frankfurt (7), Geneva (8), Copenhagen
(9), and a newcomer to the list, Basel (10). In 69th place, Prague
is the highest ranking city in Central and Eastern Europe, followed
by Ljubljana (76) and Budapest (78). Most European cities remained
stable in the ranking, with the exception of Brussels (27),
dropping six places because of terrorism-related security issues,
and Rome (57), down four places due to its waste-removal issues.
Finally, Istanbul fell from 122nd to 133rd place as a result of the
severe political turmoil in Turkey during the past year. The lowest
ranking cities in Europe are St. Petersburg and Tirana (both ranked
176), along with Minsk (189).
Western European cities also hold most of the top ten places in
the city infrastructure ranking with Frankfurt and Munich jointly
ranking 2nd worldwide, followed by Copenhagen (4) and Dusseldorf
(5). London is in 6th place, and Hamburg and Zurich both rank 9th.
Ranking lowest across Europe are Sarajevo (171) and Tirana
(188).
“Cities that rank high in the city infrastructure list provide a
combination of top-notch local and international airport
facilities, varied and extended coverage through their local
transportation networks, and innovative solutions such as smart
technology and alternative energy,” said Mr Parakatil. “Most cities
now align variety, reliability, technology, and sustainability when
designing infrastructure for the future.”
Asia-Pacific
Singapore (25) remains the highest ranking city in the
Asia-Pacific region, where there is great disparity in quality of
living; Dushanbe (215) in Tajikistan ranks lowest. In Southeast
Asia, Kuala Lumpur (86) follows Singapore; other key cities include
Bangkok (131), Manila (135), and Jakarta (143). Five Japanese
cities top the ranking for East Asia: Tokyo (47), Kobe (50),
Yokohama (51), Osaka (60), and Nagoya (63). Other notable cities in
Asia include Hong Kong (71), Seoul (76), Taipei (85), Shanghai
(102), and Beijing (119). There is also considerable regional
variation in the city infrastructure ranking. The highest-ranked
city is Singapore (1), whereas Dhaka (214) is near the bottom of
the list.
New Zealand and Australia continue to rank highly in quality of
living: Auckland (3), Sydney (10), Wellington (15), and Melbourne
(16) all remain in the top 20. However, when ranked for
infrastructure, only Sydney (8) makes the top ten, with Perth (32),
Melbourne (34), and Brisbane (37) also ranking well for
infrastructure in Oceania. By and large, cities in Oceania enjoy
good quality of living, though criteria such as airport
connectivity and traffic congestion are among the factors that see
them ranked lower in terms of city infrastructure.
Middle East and Africa
Dubai (74) continues to rank highest for quality of living
across Africa and the Middle East, rising one position in this
year’s ranking, followed closely by Abu Dhabi (79), which climbed
three spots. Sana’a (229) in Yemen, Bangui (230) in the Central
African Republic, and Baghdad (231) in Iraq are the region’s three
lowest-ranked cities for quality of living.
Dubai also ranks highest for infrastructure in 51st place. Only
five other cities in this region make the top 100, including Tel
Aviv (56), Abu Dhabi (67), Port Louis (94), Muscat (97), and
upcoming host of the 2022 FIFA World Cup, Doha in Qatar, which
ranks 96th for infrastructure. Cities in African and Middle Eastern
countries dominate the bottom half of the table for infrastructure,
with Brazzaville (228) in the Republic of the Congo, Sana’a (229),
and Baghdad (230) ranking the lowest.
-Ends-
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
2016, 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 list of rankings is provided to media for
reference, and should not be published in full. The top 10 and
bottom 10 cities in either list may be reproduced in a table.
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, theaters,
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 60,000
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.
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MercerMiriam Siscovick, +1
206-356-8549miriam.siscovick@mercer.com
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