Asia dominates the world’s most expensive city rankings for employees working abroad: Mercer’s 2022 Cost of Living Survey 

• Four of the cities in the Top 10 are located in Asia, with Hong Kong SAR taking top spot
  
• Mainland China cities make up six out of 10 priciest places to live in Asia
• Out of 49 Asian cities in this year’s survey, the city of Bishkek in Kyrgyzstan ranked 226th, is the least expensive place in Asia for international employees to live in

Asia, 29 June 2022 – Asia dominated the world’s most expensive city rankings, with Hong Kong SAR taking top spot as the costliest place for employees working abroad, in Mercer’s 2022 Cost of Living survey. Four of the cities in the top 10 are located in Asia, including Hong Kong SAR, Singapore (8th), Tokyo (9th) and Beijing (10th).

Four cities in Switzerland – Zurich, Geneva, Basel and Bern – ranked second to fifth respectively, along with Tel Aviv (6th) in Israel and New York (7th) in the United States rounded off the Top 10 list. This year’s ranking includes 227 cities across five continents, comparing the cost of more than 200 items in each location in March 2022. To stay up-to-date with the spending patterns of the expatriate workforce, Mercer revamped its Cost of Living methodology this year with new items such as smartwatches, tablet computers and smartphones added to the basket and non-relevant items such as music CDs and video movie rentals removed.

Tracey Ma, Regional Mobility Leader, Asia Pacific, said, “Despite the relatively lower inflation in Asia compared to the rest of the world, high prices and strong currencies with the exception of Japan and Korea, continue to propel Asia as one of the most expensive regions for international employees.

“In the past months, the strength of the Chinese Yuan has also made Mainland China pricier to live in. Six of the main cities – Beijing, Shanghai, Shenzhen, Guangzhou, Qingdao and Nanjing – are among the top 10 most expensive cities in Asia. In contrast, Japanese and Korean cities have become relatively more affordable due to a weaker Japanese yen and Korean won.”

In recent years, exchange rate changes have had more effect on cost-of-living indexes than inflation. However, this is no longer the case in 2022 due to rising inflation in developed economies. As travel and international mobility resumes, companies now face the challenge of ensuring the spending power of mobile employees are not affected.

In addition to cost of living data, mobility research conducted by Mercer and the learnings from Mercer’s work with clients reflects that the impact of COVID-19, the crisis in Ukraine, exchange rate variations and widespread inflation are having a material impact employees’ pay and savings. This can have serious consequences for employers in the global battle for talent.

Ms Ma said, “International assignment patterns are evolving faster than before. With the rise of remote and flexible work, companies need to rethink their approach to managing a globally distributed workforce with an optimized mobility program which aligns with the business strategic planning and achieve both cost efficiency, compliance and talent attraction. More companies are adopting the local-plus compensation approach to pay their foreign employees and increasingly, mobility programs are utilized as tools for companies to develop their high potential talent, rather than support mechanisms to make up for talent shortages in certain areas within the organization.”

“We’ve also observed a significant decrease of inbound international assignments into Asia in the past 18 months. Talent shortages, especially for highly-skilled IT professionals, have become an issue for some countries, with the rapid adoption of technology and digitalization.”  

Higher prices coupled with a stronger Thai baht also made living in Bangkok (106) the second most expensive in Southeast Asia, after Singapore. Other cities in the ASEAN region include Manila (122), Phnom Penh (134), Hanoi (150), Jakarta (151), Vientiane (157), Ho Chi Minh City (163), Bandar Seri Begawan (179), Kuala Lumpur (181), Yangon (198) and Johor Bahru (211), the least expensive city in Southeast Asia.

In India, inflation and currency fluctuations were small but Mumbai (127) remains the most expensive city, followed by New Delhi (155), Chennai (177), Bengaluru (178), Hyderabad (192), Pune (201) and Kolkata (203), the cheapest city in India.

Of the 49 Asian cities that were included in this year’s survey, the city of Bishkek in Kyrgyzstan ranked in 226th place, is the least expensive place in Asia for international employees to live in.

Commenting on the longer-term impact on global mobility practices triggered by COVID-19 and the crisis in Ukraine, Ms Ma said, “The economic and political uncertainty pushed prices upwards and caused significant increases to the cost of living, even in developed and stable markets across Asia. While the onus is on employers to act quickly to attract and retain key talent, they need reliable data and clear strategies to navigate mobility packages in times of uncertainty. This will help to ensure their employees’ financial wellbeing as well as business efficiency and equity.”

For the full rankings, visit www.mercer.com/insights/total-rewards/talent-mobility-insights/cost-of-living.

Mercer's widely recognized ranking is one of the world’s most comprehensive, and is designed to help multinational companies and governments determine compensation strategies for their international assignees. 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 227 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 data collected provides all of the key elements employers need to design efficient and transparent compensation packages for international assignees. Learn more here.

The figures for Mercer’s cost of living and rental accommodation cost comparisons are derived from a survey conducted in March 2022. 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 international assignee housing allowances. The choice of cities surveyed is based on demand for data from Mercer’s clients.

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 approximately 25,000 employees are based in 43 countries and the firm operates in 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 83,000 colleagues and annual revenue of approximately $20 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 mercer.com. Follow Mercer on LinkedIn and Twitter.