Asian cities reshuffle in Mercer's Cost of Living Survey

· Five Asian cities are in this year’s top 10: Hong Kong (No. 2), Tokyo, Japan (No. 3), Singapore (No. 5), Seoul, Korea (No. 6) and Shanghai, China (No. 8)

· Rankings of most Asian cities changed – currency is the key contributing factor

· All mainland Chinese cities surveyed fell in the ranking except Tianjin (No. 12) which climbed 18 places

· Mumbai, India leaped 25 places this year due to rapid economic growth, inflation and stable currency


Mercer’s annual Cost of Living Survey* has five Asian cities in the list of most expensive locations for working abroad:

To support the growing number of international assignees working in an increased number of locations, organisations are evaluating assignments from a cultural perspective, preparing for regional and lateral moves, and modifying compensation approaches to stay competitive.

According to Mercer’s 2017 Global Talent Trends Study, fair and competitive pay as well as opportunities for promotion are top priorities for employees this year. As a result, multinational organisations are assessing the cost of expatriate packages for their international assignees.

Mercer’s 23rd annual Cost of Living Survey finds that factors like instability of housing markets and inflation for goods and services contribute to the overall cost of doing business in today’s global environment. “Globalisation of the marketplace is well documented with many companies operating in multiple locations around the world and promoting international assignments to enhance the experience of future managers,” said Ilya Bonic, Senior Partner and President of Mercer’s Career business.

“There are numerous personal and organisational advantages for sending employees overseas, whether for long- or short-term assignments, including career development by obtaining global experience, the creation and transfer of skills, and the reallocation of resources.”

Mercer’s 2017 Cost of Living Survey finds Asian and European cities – particularly Hong Kong (2), Tokyo (3), Zurich, Switzerland (4), and Singapore (5) – top the list of most expensive cities for expatriates. The costliest city, driven by cost of goods and security, is however in Africa - Luanda, the capital of Angola. Other Asian cities appearing in the top 10 of Mercer’s costliest cities for expatriates are Seoul (6) and Shanghai (8).

“While historically mobility, talent management, and rewards have been managed independently of one another, organisations are now using a more holistic approach to enhance their mobility strategies. Compensation is important to be competitive and must be determined appropriately based on the cost of living, currency, and location,” said Bonic.

Asia Pacific

Five of the top 10 cities in this year’s ranking are in Asia. Hong Kong (2), which dropped from the top spot, is the most expensive city in Asia as a result of its currency pegged to the US dollar, which drove up the cost of accommodations locally. This global financial centre is followed by Tokyo (3), Singapore (5), Seoul (6), and Shanghai (8).

Mario Ferraro, Global Mobility Leader for Asia, Middle East and Africa (AMEA), Mercer, said, “Although a number of Asian cities remain amongst the world’s most expensive cities, key financial hubs such as Hong Kong and Singapore still continue to attract talent and remain a top choice for relocation. Although this year’s movements were due mainly to currency fluctuations, in particular against the US dollar, we did see cities – such as Mumbai – move up the ranks due to their strengthening economy and growing opportunities.”

Nathalie Constantin-Métral, Principal at Mercer with responsibility for compiling the survey ranking said, “The majority of Chinese cities fell in the ranking due to the weakening of the Chinese yuan against the US dollar. And, the strengthening of the Japanese yen along with the high costs of expatriate consumer goods and a dynamic housing market pushed Japanese cities up in the ranking.”

India’s most expensive city, Mumbai (57), climbed twenty-five places in the ranking due to its rapid economic growth, inflation on the goods and services basket and a stable currency against the US dollar. This most populous city in India is followed by New Delhi (99) and Chennai (135) which rose in the ranking by thirty-one and twenty-three spots, respectively. Bengaluru (166) and Kolkata (184), the least expensive Indian cities, climbed in the ranking as well.

Elsewhere in Asia, Bangkok, Thailand (67) jumped seven places from last year. Jakarta, Indonesia (88) and Hanoi, Vietnam (100) also rose in the ranking, up five and six places, respectively. Karachi, Pakistan (201) and Bishkek, Kyrgyzstan (208) remain the region’s least expensive cities for expatriates.

Australian cities have all experienced further jumps up the global ranking since last year due to the strengthening of the Australian dollar. Sydney (25), Australia’s most expensive city for expatriates, gained 17 places in the ranking along with Melbourne (46) and Perth (50) which went up 25 and 19 spots, respectively.

In the Middle East Dubai, UAE ranked 20th, followed by Abu Dhabi, UAE (23), and Riyadh, KSA (52), all of which climbed in this year’s ranking. Jeddah, KSA (117), Muscat, Oman (92), and Doha, Qatar (81) are among the least expensive cities in the region.

Interested?

Mercer also produces individual cost of living and rental accommodation cost reports for each city surveyed.

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*Mercer's survey is designed to help multinational companies and governments determine compensation allowances for their expatriate employees. New York is used as the base city and all cities are compared against it. Currency movements are measured against the US dollar. The survey includes over 400 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. The figures for Mercer’s cost of living and rental accommodation costs comparisons are derived from a survey conducted in March 2017. Exchange rates from that time and Mercer’s international basket of goods and services have been used as base measurements.

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Angloinfo and Nexus form JV to roll out more sites for expats in Asia

Source: Angloinfo's Hong Kong portal.

Angloinfo, the global expat network, and Nexus have formed the Angloinfo Asia joint venture (JV), with its first product the Angloinfo.com/hongkong site. The portal has been soft-launched phase with the full site scheduled to go live in August 2016.

The JV intends to roll out further local editions of Angloinfo across Asia and in China in the coming months to serve the burgeoning expat populations in those markets.

James Jackson, Chief Operating Officer of Angloinfo commented: "(Nexus') team have an unparalleled knowledge of Asia both from a media and from an expat point of view. By combining that expertise and knowledge base with Angloinfo's own experience and knowhow, we have created an exceptional company uniquely qualified to roll out the Angloinfo product offerings in Asia."

Tak Man, Managing Director of Nexus said: "Angloinfo Hong Kong is a great place to begin. But we will build on that with further new sites in other parts of Asia and, in time, develop the Angloinfo brand to offer events and other customised marketing solutions."

Angloinfo and Nexus will invest equally into the Asia operation which will initially form a team in Hong Kong in the area of content, ad sales and marketing. The shareholders envisaged that this team will expand both in size and geographic scope as the business expands across Asia.

Mercer charts changing profile of expat assignments

The majority of multinational companies (56%) expect to increase their use of short-term assignments in 2015/16, according to a report on expatriate policies and practices by Mercer - a global consulting player in advancing health, wealth and careers.

The research highlighted an ongoing diversification in the type of assignments used by companies. Notably, over the next year or so, around half of companies anticipate an increase in the use of permanent transfers (54%), developmental and training assignments (50%) and locally hired foreigners (47%). A smaller proportion of respondents (44%) expect to see an increase in more traditional long-term assignments.

“Companies are using a more varied range of assignments in order to respond to evolving business needs and changing patterns in the global workforce,” said Anne Rossier-Renaud, Principal in Mercer’s global mobility business. “The increased diversification of assignment types adds complexity which can result in potential compliance and policy challenges for HR and mobility directors. However, it also creates opportunities to positively impact the overall business strategy by mobilising key resources in more flexible and cost effective ways.”

Commenting on the Asia Pacific implications of the research, Mario Ferraro, Regional Global Mobility Leader for Asia, Middle East and Africa for Mercer said:  “Many organisations continue to face the challenge of moving talent to pursue strategic expansion, whilst managing the cost of international assignments in an increasingly uncertain economic environment. A significant 57.1% of companies reported an increased number of assignments requiring specific technical skills and just over half of respondents (50.3%) are sending more people overseas to fill vacancies requiring specific managerial skills.”

“In Asia Pacific, most organisations are constrained in terms of the attractiveness of the compensation package offered to their cross-border talent.  Thirty percent of organisations reported that “poor package attractiveness” is a large obstacle to mobility. It is evident that mobility professionals have a difficult equation to balance and need to find creative ways to offer more attractive terms and conditions without increasing the cost. These research results suggest that dual career families pose a significant obstacle to employee mobility, with 33.5% reporting this as a mobility inhibitor,” said Ferraro.  

“It is interesting to note that 54.5% of Asia Pacific respondents opted for short-term assignments in the past two years, whereas 50% reported an increase in the number of 'commuter' assignments. Short-term and commuter assignments are usually undertaken on an unaccompanied basis, circumventing the dual-career family issues, although they imply spending more time away from the family and hence are not without implications,” he added.

Mercer’s Worldwide Survey of International Assignment Policies and Practices report covers 831 multinational companies with approximately 29 million employees combined. It found that over half of companies increased their use of short term (51%) and permanent (50%) assignments over the past two years – whereas only 43% increased the use of long-term assignments. Globally, 85% of companies have a policy or policies in place for international assignments (up from 81% in 2012). The report also noted a marked increase in companies with multiple policies (64%, up from 57%), a consequence of the diversifying trend in assignments.

“One policy is unlikely to fit all, and such an approach can lead to inadequate compensation which again can make it difficult to attract and retain talent. Implementing fit-for-purpose policies, to suit both different assignees and assignments, can be a highly efficient cost-saving initiative for most global mobility functions,” said Rossier-Renaud.

The top five drivers behind international assignments are; to ‘provide specific technical skills not available locally’ (47%), to ensure ‘knowhow transfer’ (43%), to provide ‘specific managerial skills’ (41%), to facilitate ‘career management and leadership development’ (41%) and fulfil ‘specific project needs’ (40%). In the future, 57% of companies expect the number of key or strategic assignments to increase, 51% expect to deploy a higher number of younger assignees and 41% anticipate more assignments to remote locations. Companies reported the highest expected increase in assignments to be deployed to US, China, UK, Singapore and Brazil.

‘Dual career’, i.e. the challenge of effectively helping to manage the career aspirations of the spouse, and ‘family issues’ are cited as the main barriers to employee mobility, with 37% of respondents citing these issues combined as a large or very large obstacle. The ‘cost of current conditions’ ranks as the second highest obstacle (35%), followed by ‘hardship considerations’ (25%) and ‘career management’ (23%). Notably, all obstacles scored as significantly less important than in the previous survey, suggesting companies are implementing proactive measures to overcome these issues.

“With the increased use of alternative assignment types such as commuters and short term assignments, companies are by-passing some of the major obstacles to mobility,” said Rossier-Renaud. ”Employees on these assignments are less likely to bring the family along, allowing the spouse to continue working in the home country and saving the company the cost of relocation. However, these assignment types can come with significant compliance challenges, and it is imperative that companies monitor these assignees carefully for tax, social security and immigration purposes. Failure to do so can expose both the company and employee to serious legal and financial penalties.”

The proportion of female expatriates has increased somewhat, with the worldwide average participation standing at 15%, up from 12% in 2013 and 9% in 2010... Agewise the majority of long-term assignees (66%) are between 35 and 55 years old, whereas short-term assignees are increasingly younger, under 35 years old (48%, up from 45% in 2013). With an average of 10% and 7% representation in long and short term assignments respectively, the over 55s remain very under-represented in a mobility context. Looming skills shortages as a result of an ageing population is likely to change this picture over time.

Kate Fitzpatrick, Senior Mobility Consultant and Mercer, said: “The statistics on female assignee representation are clearly not representative of the workforce at large. Companies would do well to review their candidate identification and selection procedures, as well as the benefits provided under international assignment policies, to ensure there is nothing overt nor implied which is restricting the deployment of female talent.”

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Expatstoday offers essential tips for Gulf expats

Source: Expatstoday

A new portal targeted at expats wants your eyeballs. Would-be expats expecting to relocate to Bahrain, Kuwait, Oman, Qatar, Saudi Arabia & the UAE can check out living conditions in the Gulf countries on the Expatstoday website.

According to the company, the information it carries is as secure, relevant and reliable as possible. The pages for individual countries for the Gulf are fairly well-populated, indicating an existing community, but pages for other countries seem quite new, often with no listings in a number of categories. 

Source: Expatstoday website

The sections available include:

• Secure job exchange portal - job seekers can feature their profiles while employers can list job requirements. 
• Accommodation for rent - Accommodation profiles from owners who are open to expats as tenants.  
• Used cars - Details include what documentation is needed from expats, and the procedures to conclude a transaction successfully.
• Furniture and household items  
• Household and essential service providers - Look for home cleaners, painting, gardening, exterminators and similar services here.  

As with all communities, the success of Expatstoday will depend on how active individual members are and whether there are enough listings to make it worth visiting over and over again. There is definitely some level of utility for the GCC countries, and it could well extend in future to the pages for the rest of the world.

PR veteran publishes book on the lighter side of expat life in China

If you have colleagues preparing to relocate to China or are considering the possibility yourself, it may be worth seeking out The Lighter Side of China, a compilation of 2012 "Lighter Side of China" columns from thebeijinger.com written by Scott Kronick, a 19-year China veteran businessman and President and CEO of Ogilvy Public Relations, Asia Pacific. 

The book reveals the everyday experiences that expats may face when living in China, and includes useful observations on 'Holiday Traditions,' 'FengShui,' and 'Brands and Their Copies'. 

Jaime FlorCruz, longtime China watcher and correspondent said, "Kudos to Beijing old-timer Scott Kronick for his personal chronicle of living in China.  It's instructive and comic, often at his expense. It's at times sardonic and at times moving, but always genuine."

James McGregor, author of One Billion Customers added, "Scott Kronick is a keen observer and insightful adventurer who through two decades in China has never lost the sense of humor and sunny soul he arrived with. With this collection of personal stories Scott grabs your hand and takes you for an intimate and affectionate stroll across the foreigner-living-in-China landscape."

"Of all the business, political and travel books that have been written on China, few have explained the nuances of everyday life. That is what I have tried to do in a fun and entertaining format," commented Kronick. 

"The Lighter Side of China" is now available in China at The Bookworm in Beijing, airport bookstores, Shanghai Foreign Languages Bookstores and online booksellers including amazon.cn, dangdang.com and Tmall.com (Shanghai Foreign Languages Bookstore shop).