European cities dominate the top of the ranking for the best quality of living, according to a recent survey conducted by Mercer. Singapore leads Asian cities for overall quality of living and ranked highest for city infrastructure; boasting an airport with excellent facilities and connections, as well as an efficient and extensive public transport network. Hong Kong ranked 8th position.
“As a result of the current financial crisis, multinational companies are looking to review their international assignment policies with a view to cutting costs,” said Cathy Loose, Asia Pacific global mobility leader, Mercer. “Many companies plan to reduce the number of medium- to long-term international assignments and localise their expatriate compensation packages where possible, although the hardship allowance, based on quality of living criteria, will remain an essential component of the package.”
Compensating expatriates: determining appropriate allowances and incentives
The provision of incentives to reward and recognise the efforts that employees and their families make when taking on international assignments remains a typical practice, particularly for difficult locations. Common incentives include a quality of living allowance and a mobility premium. Quality of living or hardship allowances are designed to compensate expatriates for differences in the quality of living between their home and host locations. The mobility premium is intended to compensate for the inconvenience of being uprooted and having to work in another country. The former is typically location-related whilst a mobility premium is usually independent of the host location. A number of major international companies combine these premiums, but the majority provides them separately. The latter approach has the advantage of clarity and transparency.
Living conditions are analysed according to 39 factors, grouped in 10 categories:
• Political and social environment—political stability, crime, law enforcement, etc
• Economic environment—currency exchange regulations, banking services, etc
• Socio-cultural environment—censorship, limitations on personal freedom, etc
• Health and sanitation—medical supplies and services, infectious diseases, sewage, waste disposal, air pollution, etc
• Schools and education—standard and availability of international schools, etc
• Public services and transportation—electricity, water, public transport, traffic congestion, etc
• Recreation—restaurants, theatres, cinemas, sports and leisure, etc
• Consumer goods—availability of food/daily consumption items, cars, etc
• Housing—housing, household appliances, furniture, maintenance services, etc
• Natural environment—climate, record of natural disasters
Paul Arkwright
Publisher
