Infrastructure is pivotal in determining quality of living for expats
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
NEW YORK–(BUSINESS WIRE)–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.”
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
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.
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.”
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.
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
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
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
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,
5. Schools and education (standards and availability of
6. Public services and transportation (electricity, water, public
transportation, traffic congestion, etc.).
7. Recreation (restaurants, theaters, cinemas, sports and
8. Consumer goods (availability of food/daily consumption items,
9. Housing (rental housing, household appliances, furniture,
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.
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Miriam Siscovick, +1 206-356-8549